Month: July 2015

New suggested “real estate speculation tax” in Vancouver [OPINION]

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New suggested “real estate speculation tax” in Vancouver [OPINION]

 

You might have heard about the new suggested “real estate speculation tax” in Vancouver BC. Here is how it all started. Greater Vancouver has a very strong real estate market. Prices are steadily going up by 5-10 per-cent every year.  More in the recent years. People have always complained that Vancouver real estate prices are too high. Lately the complaints have been getting louder and louder as most of Metro Vancouver has shifted into sellers market.

Our mayor, Gregor Robinson, thought it would be a good idea to suggest a new “speculation real estate tax” to help drive the real estate prices down. Here is how the tax would work. If you buy a property and sell it within 1 or 2 years (exact details weren’t made clear) another 1-3% real estate speculation tax will apply. Sounds pretty good? According to Mr. Robinson this tax would keep all these evil developers in their place and somehow drive the real estate prices down. Again the details weren’t clear.

My opinion is that this tax is absolutely unnecessary and would work opposite of it’s original intent. Here is why: Vancouver real estate market is already one of the highest taxed in the world. We have: property transfer taxes (don’t get me started on these), annual property taxes and GST for new properties, we don’t need another tax layer.

Adding another tax layer to already very heavily taxed real estate market will only make the prices of real estate go up. One thing we learned from capitalistic system is that the extra cost gets passed down to the consumer, most of the time. In other words buyers will be the ones paying for additional real estate taxes.  Speculation tax would drive the real estate prices in Vancouver up not down.

Luckily premier Christy Clark has shut down the suggestion of this ridiculous tax.  For above state reasons and the fact the most people living in British Columbia own a property. Can you imagine how angry the home owners would get if this tax would actually be introduced?

In my opinion Gregor Robinson was not really intending to introduce this tax but rather was paying political games. Showing people that he’s the “good guy” and that he’s “doing something” to bring the real estate prices down.

What do you think?

Again, in this article I am simply expressing my opinion and not supporting or disapproving of any political figures. I stay out of politics and do what I do best – sell properties.

June 2015 Real Estate Update

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June 2015 Real Estate Update

Metro Vancouver home sales set record pace in June

The REBGV reports that residential property sales in Metro Vancouver* reached 4,375 on the Multiple Listing Service® (MLS®) in June 2015. This represents a 28.4 per cent increase compared to the 3,406 sales recorded in June 2014, and an increase of 7.9 per cent compared to the 4,056 sales in May 2015.

Last month’s sales were 29.1 per cent above the 10-year sales average for the month. It’s the fourth straight month with over 4,000 sales, which is a first in the REBGV’s history. The previous highest number of residential home sales was 4,434, recorded in May 2005.

“Demand in our detached home market continues to drive activity across Metro Vancouver,” Darcy McLeod, REBGV president said. “There were more detached home sales in the region last month than we’ve seen during the month of June in more than 10 years.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $694,000. This represents a 10.3 per cent increase compared to June 2014.

“Housing market activity comes in cycles; we’re in an up cycle right now that looks similar to the mid-2000s,” McLeod said. “It would be easy to point to one factor that’s causing this cycle, but the truth is that it’s a number of different factors.

“Conditions today are being driven by low interest rates, a declining supply of detached homes, a growing population, a provincial economy that’s outperforming the rest of Canada, pent-up demand from previous years and, perhaps most importantly, the fact that we live in a highly desirable region,” McLeod said.

New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,803 in June. This represents an 8.7 per cent increase compared to the 5,339 new listings reported in June 2014.

“We’re seeing a steady stream of new listings entering the market, but the overall number of homes for sale is not keeping up with buyer demand,” McLeod said.

The total number of properties currently listed for sale on the region’s MLS® is 12,181, a 23.9 per cent decline compared to June 2014 and a 1.3 per cent decline compared to May 2015. This is the lowest active listing total for June since 2006.

The sales-to-active-listings ratio in June was 35.9 per cent. This is the highest that this ratio has been in Metro Vancouver since June 2006. A seller’s market typically occurs when this ratio exceeds 20 per cent for a sustained period of time.

“The competition in today’s market means that buyers have less time to make decisions,” McLeod said. “Given this, it’s important to work with your REALTOR® to gain insight into the local market, to get quick access to new MLS® listings, to develop a buying strategy that meets your needs and risk appetite, and to receive other services and protections that come from having professional representation.”

Sales of detached properties in June 2015 reached 1,920, an increase of 31.3 per cent from the 1,462 detached sales recorded in June 2014, and a 74.2 per cent increase from the 1,102 units sold in June 2013. The benchmark price for a detached property in Metro Vancouver increased 14.8 per cent from June 2014 to $1,123,900.

Sales of apartment properties reached 1,774 in June 2015, an increase of 35.6 per cent compared to the 1,308 sales in June 2014, and an increase of 66.1 per cent compared to the 1,068 sales in June 2013. The benchmark price of an apartment property increased 5.3 per cent from June 2014 to $400,200.

Attached property sales in June 2015 totalled 681, an increase of 7.1 per cent compared to the 636 sales in June 2014, and a 44.3 per cent increase from the 472 attached properties sold in June 2013. The benchmark price of an attached unit increased 7.1 per cent between June 2014 and 2015 to $506,900.

See full report here: June 2015 Stats Package

Note: this article has been sourced from the Real Estate Board of Greater Vancouver.