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Downtown Vancouver Condos Market Update – March 2017

Oleg First time buyers, For Buyers, For Sellers, Market update, News, Statistics 0 Comment

March was a busy months for the downtown condo market. Here is a detailed breakdown. Let’s take a look at 1 and 2 bedroom resale condo market. No townhouses; no new construction. All graphs go back 3 years.

Average Sales Price

Average Sales Price of ONE bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: $680,250 | -3.0% (change since March 2016)

Downtown VW: $555,303 | +10.1% (change since March 2016)

West End: $532,850 | +22.3% (change since March 2016)

Yaletown: $661,967 | +13.5% (change since March 2016)

 

Average Sales Price of TWO bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: $1,592,200 | -14.0% (change since March 2016)

Downtown VW: $950,038 | +10.8% (change since March 2016)

West End: $931,133 | -8.0% (change since March 2016)

Yaletown: $1,217,538 | -0.3% (change since March 2016)

Average Percent of Original Price

Average Percent of Original Asking Price for ONE bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 98.7% | -4.2% (change since March 2016)

Downtown VW: 100.5% | -3.7% (change since March 2016)

West End: 103.3% | +0.6% (change since March 2016)

Yaletown: 101.8% | -3.8% (change since March 2016)

Average Percent of Original Asking Price for TWO bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 101.2% | +3.3% (change since March 2016)

Downtown VW: 99.0% | -4.1% (change since March 2016)

West End: 100.0% | -1.4% (change since March 2016)

Yaletown: 100.9% | -0.5% (change since March 2016)

 

Average Price Per Square Foot

Average Price Per Square Foot for ONE bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: $1,113 | +13.5% (change since March 2016)

Downtown VW: $940 | +14.1% (change since March 2016)

West End: $905 | +24.0% (change since March 2016)

Yaletown: $1,037 | +16.9% (change since March 2016)

Average Price Per Square Foot for TWO bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: $1,480 | +15.4% (change since March 2016)

Downtown VW: $1,010 | +16.6% (change since March 2016)

West End: $938 | +4.5% (change since March 2016)

Yaletown: $1,142 | +6.0% (change since March 2016)

 

Total Inventory

Total Inventory of ONE bedroom condo units for sale in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 11 | +22.2% (change since March 2016)

Downtown VW: 59 | -15.7% (change since March 2016)

West End: 23 | -17.9% (change since March 2016)

Yaletown: 29 | +52.6% (change since March 2016)

 

Total Inventory of TWO bedroom condo units for sale in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 38 | +65.2% (change since March 2016)

Downtown VW: 51 | -5.6% (change since March 2016)

West End: 32 | -22.0% (change since March 2016)

Yaletown: 46 | +27.8% (change since March 2016)

New Listings

New Listings of ONE bedroom condo units for sale in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 12 | 0.0% (change since March 2016)

Downtown VW: 62 | -46.6% (change since March 2016)

West End: 31 | +3.3% (change since March 2016)

Yaletown: 38 | -2.6% (change since March 2016)

 

New Listings of TWO bedroom condo units for sale in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 25 | +66.7% (change since March 2016)

Downtown VW: 43 | -29.5% (change since March 2016)

West End: 24 | -38.5% (change since March 2016)

Yaletown: 42 | +10.5% (change since March 2016)

Total Sales

Number of Sales of ONE bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 12 | 0.0% (change since March 2016)

Downtown VW: 58 | -44.8% (change since March 2016)

West End: 29 | -31.0% (change since March 2016)

Yaletown: 30 | -25.0% (change since March 2016)

 

Number of Sales of TWO bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 5 | -77.3% (change since March 2016)

Downtown VW: 39 | -25.0% (change since March 2016)

West End: 18 | -56.1% (change since March 2016)

Yaletown: 39 | +5.4% (change since March 2016)

 

Sales to Actives Ratio

Number of Sales of ONE bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 1.091 | -18.2% (change since March 2016)

Downtown VW: 0.983 | -34.5% (change since March 2016)

West End: 1.261 | -15.9% (change since March 2016)

Yaletown: 1.034 | -50.9% (change since March 2016)

Number of Sales of TWO bedroom condo units in downtown Vancouver in March 2017 (see graph below)

Coal Harbour: 0.132 | -86.2% (change since March 2016)

Downtown VW: 0.765 | -20.6% (change since March 2016)

West End: 0.563 | -43.7% (change since March 2016)

Yaletown: 0.848 | -17.5% (change since March 2016)

In conclusion, downtown condo market is still very active. On average one bedroom units are selling for over the asking price with multiple offers. The prices for two bedroom units continue “treading water”. We see low inventory levels for both 1 and 2 bedroom units. Overall the market in downtown Vancouver is active this spring season.

Vancouver Housing Real Estate Market Update – February 2017

Oleg For Buyers, For Sellers, Market update, News, Statistics 1 Comment

Here is a detailed real estate market update for detached houses in Vancouver BC. We will only focus on detached housing market; no townhouses or condo units are included. In this market update we will only discuss resale houses; new construction houses are excluded.

Average Sale Price of detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: $1,488,371 | -2.8% (change since February 2016)

Vancouver West: $3,704,774 | -0.3% (change since February 2016)

The average sales price in both Vancouver East and Vancouver West are is lower than the same time last year. However, there is a slight improvement as compared to January 2017.

 

Average Percent of Original Price of detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: 96.9% | -8.8% (change since February 2016)

Vancouver West: 95.9% | -7.8% (change since February 2016)

Houses are selling about 4-5% under the original asking price. A bit lower than usual.

 

Total Inventory of detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: 634 | +80.6% (change since February 2016)

Vancouver West: 568 | -2.4% (change since February 2016)

We are experiencing a little higher than usual inventory levels for this season.

 

Number of New Listings of detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: 170 | -29.8% (change since February 2016)

Vancouver West: 163 | -57.2% (change since February 2016)

The number of new listings in February 2017 was a bit low for the season. That’s good news for the sellers as inventory levels are still a little high. Limited number of new listings could tip the scale in the favour of sellers in the upcoming months.

 

Total Number of Sales of detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: 82 | -46.8% (change since February 2016)

Vancouver West: 92 | -56.8% (change since February 2016)

Sales of detached houses in Vancouver in February 2017 were lower than usual for the season.

 

Sales to Active Listings Ratio for the detached houses in Vancouver in February 2017 (see graph below)

Vancouver East: 0.129 | -70.6% (change since February 2016)

Vancouver West: 0.162 | -55.7% (change since February 2016)

Based on sales to actives ratio data, Vancouver detached housing market is still a buyers market.

In conclusion, the prices of detached properties in Vancouver have increased since January 2017. However the prices as compared to the same time last year are down. We are still in the buyers market with properties selling 4-5% under the original asking price. Inventory levels are a little high, but they are levelling off because of the limited supply of new listings.

Downtown Vancouver Condo Market Real Estate Update – February 2017

Oleg First time buyers, For Buyers, For Sellers, Market update, News, Statistics 0 Comment

Here is a look at the Downtown Vancouver condo market in February 2017. We will be looking at resale condo units only. No townhouses; no new construction. This real estate update will focus on one bedroom and two bedroom condo units separately. All graphs are for the past 3 years.

Average Sales Price of one bedroom condo units in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: $703,091 | +0.7% (change since February 2016)

Downtown VW: $546,065 | +6.6% (change since February 2016)

West End: $493,580 | +16.9% (change since February 2016)

Yaletown: $627,750 | +16.5% (change since February 2016)

Average Sales Price of Two bedroom condo units in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: $1,394,667 | +2.7% (change since February 2016)

Downtown VW: $1,007,063 | +1.9% (change since February 2016)

West End: $1,318,824 | +45.4% (change since February 2016)

Yaletown: $1,216,676 | +18.9% (change since February 2016)

 

 

Average Percent to Original Price one bedroom condos in downtown Vancouver sold for in February 2017 (see graph below)

Coal Harbour: 99.1% | -2.4% (change since February 2016)

Downtown VW: 101.0% | -3.7% (change since February 2016)

West End: 100.2% | -2.3% (change since February 2016)

Yaletown: 99.7% | -5.2% (change since February 2016)

Average Percent to Original Price two bedroom condos in downtown Vancouver sold for in February 2017 (see graph below)

Coal Harbour: 97.9% | -1.8% (change since February 2016)

Downtown VW: 98.4% | -3.4% (change since February 2016)

West End: 98.7% | -3.4% (change since February 2016)

Yaletown: 97.4% | -5.9% (change since February 2016)

 

 

Average Price Per Square Foot for One bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: $1,034 | +8.0% (change since February 2016)

Downtown VW: $931 | +12.8% (change since February 2016)

West End: $837 | +26.6% (change since February 2016)

Yaletown: $1,097 | +24.7% (change since February 2016)

Average Price Per Square Foot for Two bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: $1,303 | +17.2% (change since February 2016)

Downtown VW: $1,011 | +8.5% (change since February 2016)

West End: $1,052 | +24.3% (change since February 2016)

Yaletown: $1,115 | +17.6% (change since February 2016)

 

 

Total Inventory of One bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 14 | +55.6% (change since February 2016)

Downtown VW: 63 | -1.6% (change since February 2016)

West End: 27 | -37.2% (change since February 2016)

Yaletown: 32 | +60.0% (change since February 2016)

Total Inventory of Two bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 24 | -27.3% (change since February 2016)

Downtown VW: 59 | +9.3% (change since February 2016)

West End: 32 | -30.4% (change since February 2016)

Yaletown: 49 | +22.5% (change since February 2016)

 

New Listings of One bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 12 | +33.3% (change since February 2016)

Downtown VW: 56 | -44.0% (change since February 2016)

West End: 31 | -26.2% (change since February 2016)

Yaletown: 33 | -8.3% (change since February 2016)

 

 

New Listings of Two bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 10 | -37.5% (change since February 2016)

Downtown VW: 31 | -53.7% (change since February 2016)

West End: 16 | -61.0% (change since February 2016)

Yaletown: 40 | 0.0% (change since February 2016)

 

 

Total Sales of One bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 11 | -21.4% (change since February 2016)

Downtown VW: 52 | -40.9% (change since February 2016)

West End: 30 | -3.2% (change since February 2016)

Yaletown: 28 | +7.7% (change since February 2016)

Total Sales of Two bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 12 | -33.3% (change since February 2016)

Downtown VW: 30 | -36.2% (change since February 2016)

West End: 17 | -37.0% (change since February 2016)

Yaletown: 25 | -30.6% (change since February 2016)

 

 

Sales to Active Listings Ratio for One bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 0.786 | -49.5% (change since February 2016)

Downtown VW: 0.825 | -40.0% (change since February 2016)

West End: 1.111 | +54.1% (change since February 2016)

Yaletown: 0.875 | -32.7% (change since February 2016)

Sales to Active Listings Ratio for Two bedroom condos in downtown Vancouver in February 2017 (see graph below)

Coal Harbour: 0.500 | -8.3% (change since February 2016)

Downtown VW: 0.508 | -41.6% (change since February 2016)

West End: 0.531 | -9.5% (change since February 2016)

Yaletown: 0.510 | -43.3% (change since February 2016)

 

In conclusion, prices for both one and two bedroom condos are up across all four downtown neighbourhoods. The inventory is still at very low levels. One bedroom condo market as well as two bedroom condo market in downtown are seller markets.

CMHC Mortgage Insurance Rates Are Going UP This Spring

Oleg Articles, First time buyers, For Buyers, News 0 Comment

interest rate increase

On January 17th 2017, CMHC mortgage insurance agency announced that their mortgage insurance premiums will be increasing starting March 17, 2017.

Over the past 2 years we have seen a number of changes to the mortgage borrowing regulations.  This CMHC insurance premiums increase is another change to mortgage borrowing process and rules.

According to the CMHC agency an average increase in premiums for the homeowners will be insignificant. Roughly $5 per months increase on average.

However, this increase will vary significantly depending on the mortgage amount. Home-buyers who have a $250,000 mortgage will see a $4.70 per month increase.  Average Canadian insured mortgage is about $245,000. The monthly increase in premiums on mortgages of $150,000 will be $2.82.

In Greater Vancouver, home-buyers are very likely to see higher average payment increases, as the average mortgage in the region is above that of the Canadian average. The CMHC said that the increase on loans of $450,000 would be $8.47 per month, and nearly $16 for those with insured mortgages of $850,000.

cmhc premiums increase chart 2017

Roughly two-thirds of home-buyers with a CMHC-insured mortgage have down-payments of less than ten per cent. For most new home-buyers the monthly payment increase will be “negligible,” said Steven Mennill, CMHC’s senior vice-president of insurance.

Steven Mennill said, “We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home. Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

The CMHC’s statement said, “Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1 of this year that require mortgage insurers to hold additional capital. Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”

From my experience this increase in the CMHC insurance premiums should not have any significant impact on the Metro Vancouver real estate market. I think that first-time home-buyers are the ones who most likely be effected by these CMCH premiums increase.

3 things you NEED to know about your 2017 B.C. property assessment

Oleg For Buyers, For Sellers, News, Tips 0 Comment

 

A few days ago homeowners all over Lower Mainland have received their 2017 Property Assessments. Single-family homeowners have seen an increase of 30 to 50 per cent in one year. Most condo owners in Metro Vancouver have also seen major increases of 15 to 30 per cent.

Every year B.C. Property Assessment come out I get a ton of questions from my clients. I thought I’d be easier to write a blog post about it.

Here are things you need to know about your 2017 property assessments.

  1. Even though Property Tax Assessment are sent out in January of the new year the assessed value is as of July 1 of the previous year. Your 2017 tax assessment roughly estimates how much you could have sold your property for on July 1, 2016. Whatever market changes happen after July 1, 2016 will be factored into your 2018 tax assessment. Unfortunately, most of the Metro Vancouver home prices have decreased since July (See my Vancouver Housing Breakdown for Dec 2016 here).
  2. Assessments and tax increases are not a linear relationship. Your property increasing in value by 40% based on the tax assessment doesn’t mean that your property taxes will be 40% higher. There is something called mil rate.  The mill rate is a factor which goes up and down to even out the price fluctuations.  The mill rate (factor) is multiplied by the value of the home to achieve the taxes that the city deems it needs.    The City uses this factor to achieve the rate increases to pay for their budget.  Usually 3-5% per year.  Your taxes will be very close to the amount that the city has earmarked.
  3.  Typically your tax assessments are 10-15% lower than the actual value of the property. That’s done for a reason. City Halls all over Lower Mainland don’t want to have angry homeowners at their footsteps demanding their property assessments to be lowered. However, due to the decrease in home prices in recent months your 2017 tax assessment might be very accurate.

In conclusion, huge increases in B.C. property assessments don’t necessarily mean huge property tax increases for the homeowners. No need to panic. Based on the changes in the real estate market most property assessments are outdated.

DOWNTOWN Vancouver One Bedroom Condo Market Update – Dec 2016

Oleg First time buyers, For Buyers, For Sellers, Market update, News, Statistics 0 Comment

downtown apartment building

Happy New Year, guys! Here is a detailed breakdown and market statistics for one bedroom condo units in downtown Vancouver in December 2016. In this breakdown I will only focus on resale units. No new construction. Statistics include 1 bedroom condo and apartment units.  Two or more bedrooms units are excluded. Townhouses are excluded from this breakdown as well.

Average Sales Price of one bedroom condo units in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: $661,975 | -6.7% (change since December 2015)

Downtown VW: $613,295 | +27.5% (change since December 2015)

Yaletown: $700,052 | +30.1% (change since December 2015)

West End: $460,850 | +10.8% (change since December 2015)

Huge increase in the average sales price in Yaletown and Downtown VW. However, for the first time in a while we see a decline in the average sales price in Coal Harbour. Coal Harbour is almost 7% down as compared to December of last year. It’s too early to tell if the average sales price drop is something serious or just a fluctuation in the market.

Average Percent to Original Price one bedroom condos in downtown Vancouver sold for in December 2016 (see graph below)

Coal Harbour: 96.4% | -5.1% (change since December 2015)

Downtown VW: 98.3% | -2.5% (change since December 2015)

Yaletown: 97.2% | -2.4% (change since December 2015)

West End: 101.1% | +2.2% (change since December 2015)

Nothing surprising here. One bedroom condo and apartment units in downtown Vancouver are usually selling for anywhere between 5-7% under the original asking price. Of course summer and spring of this year was an anomaly; we’ve seen downtown condos selling for 5-8% over the original asking price.

 

Average Price Per Square Foot for one bedroom condos in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: $1,021 | +10.1% (change since December 2015)

Downtown VW: $932 | +20.9% (change since December 2015)

Yaletown: $1,000 | +20.3% (change since December 2015)

West End: $752 | +6.5% (change since December 2015)

For the fist time average price per square foot in Yaletown has reached a $1000 mark.

 

Total Inventory of one bedroom condos for sale in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: 8 | -11.1% (change since December 2015)

Downtown VW: 36 | +20.0% (change since December 2015)

Yaletown: 20 | +42.9%(change since December 2015)

West End: 29 | +16.0% (change since December 2015)

We see unusually low inventory numbers of one bedroom condo units on sale in downtown Vancouver. The total inventory numbers are well below the 10 year average.  Strong buyer demand and the lack of inventory could cause the prices to keep increasing in 2017.

 

New Listings of one bedroom condos for sale in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: 3 | 0.0% (change since December 2015)

Downtown VW: 19 | -29.6% (change since December 2015)

Yaletown: 11 | -8.3% (change since December 2015)

West End: 5 | -58.3% (change since December 2015)

Very low number of new listing on the market this December. Although, it is not unusual for December to be a slow month for the new listings.

 

Total number of one bedroom condos sold in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: 8 | 0.0% (change since December 2015)

Downtown VW: 40 | +11.1% (change since December 2015)

Yaletown: 17 | -15.0% (change since December 2015)

West End: 14 | -46.2% (change since December 2015)

Most likely due to the low inventory levels, lack of new listings and the slower nature of December real estate market there were fewer sales.

 

Sales to Active Listings Ration of one bedroom condos in downtown Vancouver in December 2016 (see graph below)

Coal Harbour: 1.000 | +12.5% (change since December 2015)

Downtown VW: 1.111 | -7.4% (change since December 2015)

Yaletown: 0.850 | -40.5% (change since December 2015)

West End: 0.483 | -53.6% (change since December 2015)

Downtown remains a very strong “sellers” market with almost no back inventory.

In conclusion, average sales price for one bedroom condos in downtown is still going up. Record high price per square foot numbers and low inventory levels. It is still very much a “sellers” market although on average units are selling for 4-5% under the original asking price.

Comment below if you found this information useful. 

* all of the statistics used in this breakdown were taken from the Real Estate Board Of Greater Vancouver

Burnaby BC 1 bedroom condo market update – December 2016

Oleg Articles, First time buyers, For Buyers, For Sellers, Market update, News, Statistics 0 Comment

burnaby condo building

Happy New Year, guys! In this article I will breakdown one bedroom condo market in Burnaby BC for the month of December 2016. The statistics only apply to condos and apartments in Burnaby (townhouses are excluded). The breakdown is for one bedroom resale condos only. New construction and condos with more than one bedroom are excluded.

Average Sales Price for 1 Bedroom Condo in Burnaby in December 2016 (see graph below)

December 2016: $357,435 | +17.6% (change since December 2015)

November 2016: $344,681

There is a substantial increase in the average sales price for one bedroom condos in Burnaby as compared to December 2015. We also see an increase in the sales prices as compared to last month. It seems that the sales prices are catching up with the sales prices we’ve seen in the summer of this year.

 

Average Percent of Original Asking Price seller of one bedroom units in Burnaby are getting in December 2016 (see graph below)

December 2016: 97.8% | +0.6% (change since December 2015)

November 2016: 99.2%

In December sellers of one bedroom condos in Burnaby were selling their units for about 2-3% below their original asking price. That’s an indication of a healthy buyer demand.

In the summer and spring of 2016 sellers were selling their units for 5-8% over their original asking price.

 

Average Price Per Square Foot of one bedroom unit is Burnaby in December 2016 (see graph below)

December 2016: $537 | +20.7% (change since December 2015)

November 2016: $547

A huge increase in the average price per square foot since December of 2015. Again, an indication of a strong buyer demand as the prices don’t seem to be dropping for one bedroom units in Burnaby BC.

 

Total Inventory of one bedroom condos and apartments in Burnaby in December 2016 (see graph below)

December 2016: 36 | -69.0% (change since December 2015)

November 2016: 53

Record low inventory levels for one bedroom units in Burnaby. In fact this December we’ve had the lowest number of one bedroom condo units for sale in the last 10 years.  Such low inventory levels are likely to cause price increase for one bedroom condos.

 

Total Number of New Listing of one bedroom condo unit on the market in Burnaby in December 2016 (see graph below)

December 2016: 18 | -41.9% (change since December 2015)

November 2016: 33

Some of the lowest numbers for new listings of one bedroom condos in Burnaby we’ve seen.

 

Total Number of Sales for one bedroom condos in Burnaby in December 2016 (see graph below)

December 2016: 21 | -60.4% (change since December 2015)

November 2016: 43

Not surprisingly we see a huge drop in the total number of sales as compared to December of 2015. Lack of inventory as well as the natural slow-down in the real estate activity are the likely causes for such low transaction numbers.

 

Sales to Active Listings Ratio for one bedroom condos in Burnaby in December 2016 (see graph below)

December 2016: 0.583 | +27.6% (change since December 2015)

November 2016: 0.81

The one bedroom condo market in Burnaby is still a very strong “sellers” market. On average 58 out of 100 condos were sold in December 2016.

In conclusion, one bedroom condo market in Burnaby is a “sellers” market. Units are generally selling for very close to their original asking price. Sale prices are gradually increasing. Total inventory levels are at all time low heading into 2017.

Leave a comment below if you found this information useful! 

*all of the data is taken from the Real Estate Board of Greater Vancouver

New BC Government Downpayment Program for the First-Time Buyers; Here is WHAT you NEED to KNOW

Oleg Articles, First time buyers, For Buyers, News, Tips 0 Comment

 

On December 15th 2016 Premier Christy Clark unveiled a new loan program to help first-time home buyers come up with their down payment. This program is designed to make it easier for the first-time home buyers to into the Real Estate Market.

The BC Home Owner Mortgage and Equity (HOME) Partnership program will offer qualifying first-time home buyers loans of up to $37,500, interest and payment free, for up to five years. It’s basically a second mortgage on the property that you don’t have to make any payments on for the first 5 years.

The province will begin accepting applications from qualified first-time buyers on January 16, 2017.

To qualify, buyers must:

1. Be buying their first home

The buyers who previously owned real estate anywhere in the world DO NOT qualify for this program.

2. Obtain a high-ratio, insured first mortgage for at least 80 per cent of the purchase price

The buyers can not have a downpayment on the property larger than 20% of it’s value. They must obtain CMHC insurance.

3. Have a combined gross household income not exceeding $150,000

The buyers who will have their names on the tittle must collectively earn less than $150,000/year.

4. Have saved a down payment amount at least equal to the loan amount

The BC government will only land the buyers 50% of the total downpayment. The other half of the downpayment will have to come from the buyers themselves. In other words first-time buyers will still have to contribute at least 2.5% downpayment.

5. Be a Canadian citizen or permanent resident for at least five years

Foreign buyers will not be eligible to take advantage of this program.

6. Have lived in BC for at least the full year preceding their application

In other words potential buyers will have to have lived in British Columbia for at least 1 year before applying for this program.

The loans will be due in full if the buyer defaults on a payment, ceases to use the home as a principle residence or resells the home.

Key facts:

• The BC government loans will match a home buyer’s contribution to a down payment up to five per cent of the home’s purchase price. 

• The maximum purchase price to qualify for a loan is $750,000 (excluding taxes and fees).

• After five years, buyers can either repay their loan or enter into monthly payments at current interest rates.

• Loans through the program are due after 25 years. The same as standard mortgage. 

“This program will boost sales to first-time home buyers. Without question, they’ll take advantage of it wherever they can,” said Helmut Pastrick, Central 1 Credit Union chief economist.

The province estimates this initiative will help at least 42,000 buyers or households province-wide over the next three years. About half of these buyers will be in the Lower Mainland, according to Pastrick.

What effect will “empty home tax” have on Vancouver real estate market?

Oleg Articles, For Buyers, For Sellers, News, Opinion 0 Comment

Vancouver to implement vacancy tax on empty homes and condos

BC government has cleared the way for Vancouver to impose a vacancy tax on empty homes. Vancouver plans to impose the tax by early 2017. It will make it the first major city in Canada to implement such a penalty amid skyrocketing rents and growing concerns about foreign investment and speculation.

Mayor Robertson noted that a city study concluded there were about 10,800 empty residential units homes in the province, almost all condos, as of 2014.

Similar tax was introduced in London on ‘ghost homes’ back in 2013. As a result, one third of absentee owners began renting out their flats. However the majority of absentee owners left their flats vacant. The annual appreciation is way more than the ’empty home tax’.

So what effect will this new tax have on Vancouver’s real estate market?

In my opinion there will be no significant effect. Overseas millionaires and billionaires would not care about a couple of thousands of dollars per year in taxes. Vancouver has one of the lowest property taxes in the world. Even after additional vacancy tax it would still be quite affordable.

Empty home tax would be very hard to enforce. You could always have one of your family members “live” in the unit for a couple of weeks every year.

Other municipalities have not agreed to such tax yet. If Vancouver has an “empty home tax” a potential investor can alway buy in Burnaby, or North Vancouver, or Richmond, or… you get the idea.

In the best case scenario a small portion of the absentee owners will decide to rent out their units. Which should stimulate the rental vacancy rate. Currently the rental vacancy rate in Vancouver is 0.6 percent. Housing experts say a healthy vacancy rate is 3 per cent to 5 per cent.

In summery empty home tax will not have any significant effect on the real estate market in Vancouver. It might have a slight effect on the rental vacancy rates, but even that is questionable.

 

NOTE: This article represents my personal opinion. Do your own independent research before taking any actions. 

Feds are meeting to solve Vancouver’s housing ‘crisis’

Oleg Articles, News, Opinion 0 Comment

Can Federal Government solve Vancouver’s Housing ‘Crisis’?

Our Prime Minister Justin Trudeau is in Vancouver. The Prime Minister has just announced a massive funding injection to the public transportation in the region. On Friday June 17, he will be attending a roundtable on housing affordability, which brings tougher Liberal MPs, academics and housing experts.

He acknowledged that affordability issues in Vancouver are very complex puzzle. He also added that they would do everything possible to manage local real estate prices without it effecting the rest of Canada.

“We want to be drawing in money from overseas to continue to make this an extraordinary city, but we need to make sure we’re doing it in such a way people can afford their homes,” he said.

Federal Government has a few tools available to them that will potentially slow down Vancouver’s active real estate market. However, most of these tools will negatively effect real estate markets in other Canadian cities.

One of the tools at their disposal is raising interest rates. However, an increase in interest rates would have to be nationwide which will negatively effect the rest of Canada. Real estate markets in most Canadian cities are already not doing well.

Raising a minimum downpayment to 10% is another tool Federal Government might use. This strategy once again will have a negative effect on the rest of Canada.

Posing an “empty homes” tax could be another solution proposed. This solution might have a very minimal effect. Overseas millionaires who spend $4 million to buy a property will not be discouraged by an additional property tax.

It will be very interesting to see what solutions are proposed if any. It will also be interesting to see if Federal Government will actually get involved in regulating Provincial and Regional real estate.