Author: Oleg

Vancouver Enters the ‘Big Leagues’ of Development with Market Rental Housing Strategy

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The City of Vancouver is taking a bold step in tackling the housing crisis by launching a market rental housing strategy that could redefine urban development in Canada. Announced by Mayor Ken Sim, the plan involves building 4,300 market rental units on five city-owned sites, with the goal of creating long-term revenue to support affordable housing and community infrastructure.

A New Approach to Housing Development

Unlike traditional housing projects that rely on private developers, this initiative positions the City of Vancouver as both the landowner and developer—a first-of-its-kind move in Canada. While the city has previously used this model for non-market housing, this marks the first major venture into market rentals.

The Vancouver Housing Development Office (VHDO), established in 2023, will oversee the project. Two of the five proposed sites are located in downtown Vancouver, with others situated in Kingsway (2400 Motel site), Marpole, and Main & Terminal.

“This is about leveraging our land not only to deliver much-needed market rental housing but also to pilot a new way to generate non-tax revenue for the city,” said Mayor Sim. The additional revenue is expected to fund community centers, the Vancouver Affordable Housing Endowment Fund, and other city initiatives.

Balancing Public and Private Interests

City officials have emphasized that this strategy is about financial sustainability. The $6 billion property endowment fund, originally established in 1975, will play a key role. The goal is to generate consistent returns to fund public services, moving beyond the traditional model of relying solely on taxes and developer contributions.

“There is another definition of public benefit—the ongoing income stream coming in,” said Grace Cheng, the city’s director of long-term strategy and planning. This means funds could be allocated to renewing libraries, improving water and sewer infrastructure, or enhancing other public services.

The Financial Impact: Billions in Play

While the cost of development is yet to be finalized, city officials estimate that the project’s financial impact will be in the billions.

“The first task is to get these sites zoned for highest and best use under market rental tenure,” said Brad Foster, director of market rental housing at VHDO. “The next task will be, ‘How do we get them built?’ And that’s where all the finance discussions will take place.”

Deputy city manager Armin Amrolia reinforced this, saying, “This is the big leagues of development, and we aim to not shy away from that.”

Who Can Afford These Rentals?

Once completed, these rental units will be targeted toward middle-income earners, with household eligibility ranging between $90,000 and $194,000 per year, based on today’s market rates. This move is expected to address the housing gap for professionals and working families who often struggle to find affordable housing in Vancouver’s competitive market.

The Future of Vancouver Housing

The five sites designated for this project include:

  • Pacific & Hornby: Two towers (54 and 40 stories) with 1,136 homes.
  • Main & Terminal: Currently a parking lot, planned for redevelopment.
  • Granville Bridge North End: Four proposed towers.
  • 2400 Motel (Kingsway): Major transformation planned.
  • Granville & 67th (Marpole): Another key development site.

This ambitious strategy reflects a “made-in-Vancouver” solution to the housing crisis—one that prioritizes long-term financial stability while increasing rental supply. If successful, it could serve as a model for other cities facing similar challenges.

What’s Next?

The city still needs to finalize zoning, secure development partners, and approve financing agreements before breaking ground. However, officials remain optimistic that this bold initiative will help reshape Vancouver’s housing landscape for the better.

With billions of dollars in play and thousands of new homes on the horizon, Vancouver is stepping into a new era of real estate development—one where the city itself is leading the charge.

Vancouver Real Estate Market Sees Surge in New Listings to Start 2025

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The Metro Vancouver real estate market is off to an active start in 2025, with a significant increase in new listings as sellers rush to enter the market. According to the latest report from Greater Vancouver REALTORS® (GVR), the number of homes newly listed on the MLS® system rose by 46% in January compared to the same time last year.

This shift suggests a potential change in market dynamics, with sellers becoming more active after a strong finish to 2024.

Home Sales and Listings: Key Market Trends

January 2025 saw 1,552 home sales, an 8.8% increase compared to January 2024. However, this figure remains 11.3% below the 10-year seasonal average of 1,749 sales.

On the supply side, there were 5,566 new listings across detached, attached, and apartment properties—a 46.9% jump from January 2024 and 31.1% above the 10-year average. The total number of properties for sale has also grown to 11,494, marking a 33.1% increase from last year.

What This Means for Buyers & Sellers

With new listings outpacing demand, the market remains in balanced conditions. According to Andrew Lis, GVR’s Director of Economics and Data Analytics, the recent increase in listings has kept home prices relatively stable to start the year.

The sales-to-active listings ratio, a key market indicator, stands at 14.1% overall. Breaking it down by property type:

  • Detached homes: 9.2%
  • Attached homes (townhouses, duplexes): 18.5%
  • Apartments: 16.5%

Historically, prices tend to decline when this ratio falls below 12% and increase when it exceeds 20% for a sustained period. Since the current ratio remains within a balanced range, price growth has been minimal.

Vancouver Home Prices: Where Do We Stand?

  • Overall Benchmark Price: $1,173,000 (📈 +0.5% YoY)
  • Detached Homes: $2,005,400 (📈 +3.1% YoY)
  • Apartment Homes: $748,100 (📉 -1.7% YoY)
  • Townhouses: $1,105,600 (📈 +2.7% YoY)

While detached and townhouse prices have increased slightly over the past year, apartment prices have dipped. This suggests that affordability concerns may be impacting the condo market more than other segments.

Economic Uncertainty Could Impact Future Trends

Despite the strong start to 2025, experts warn that external factors could influence the housing market in the coming months. Tariffs from the U.S. and potential economic instability could create uncertainty, affecting both buyer demand and seller confidence.

“Our 2025 forecast calls for moderate price growth by the end of the year, but economic shocks—such as the impact of U.S. tariffs on Canada—could alter these projections,” said Lis.

Should You Buy or Sell in 2025?

With more homes hitting the market, buyers have more options than they did a year ago. However, prices remain stable, meaning sellers are still in a decent position—especially in the detached home and townhouse segments.

If you’re considering buying or selling, staying informed on market trends will be key. The coming months will determine whether demand keeps up with rising inventory, or if we shift into a buyer’s market with more downward pressure on prices.

Why You Can’t Afford to Live in Vancouver: Exclusionary Zoning Explained

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Vancouver is at the heart of British Columbia’s housing crisis, yet the city continues to restrict new apartment buildings on most of its residential land, preserving it for low-density, single-family housing. While minor zoning reforms have taken place in recent years, more than three-quarters of Vancouver’s residential land still prohibits apartment construction. This outdated zoning policy is not just a relic of the past—it is actively worsening the housing crisis.

The Problem with Exclusionary Zoning

For decades, Vancouver has only allowed apartment buildings in select areas, typically along noisy arterial roads and in older neighborhoods with existing apartments. Meanwhile, the wealthiest single-family neighborhoods remain largely untouched to avoid opposition from Not-In-My-Backyard (NIMBY) advocates.

Although the B.C. government has started pushing back on exclusionary zoning, it has yet to take the crucial step of overturning the apartment ban. This persistent restriction is driving up housing costs, displacing renters, and fueling urban sprawl. Here’s how:

1. Restricting Housing Supply

The Canada Mortgage and Housing Corporation (CMHC) estimates that B.C. needs 610,000 additional homes by 2030beyond current trends. However, by preventing apartments in most areas, Vancouver is artificially constraining supply and keeping housing unaffordable.

2. Forcing Tenant Displacement

With apartments banned in most residential areas, developers target existing apartment buildings for redevelopment, leading to evictions and displacement of renters. If new apartments were allowed in single-family zones, this could alleviate pressure on older rental buildings.

3. Increasing Housing Costs

Since apartment-zoned land is scarce, developers—both for-profit and non-profit—must compete for a limited supply of sites, inflating land prices. The rezoning process itself can cost non-profit housing developers between $500,000 to $1 million, further driving up rents and affordability challenges.

4. Blocking People from Living in Desired Areas

By banning apartments in wealthier neighborhoods, exclusionary zoning ensures that lower-income individuals and renters are forced into high-traffic areas. This policy reinforces economic segregation and limits housing choices.

5. Promoting Suburban Sprawl

With housing options limited in Vancouver, many people are pushed to the suburbs, increasing commute times, transportation costs, and urban congestion. This shift also leads to greater carbon emissions and environmental harm.

6. Raising Infrastructure Costs

Denser housing reduces the per-capita cost of infrastructure like roads, sewers, and schools. However, by enforcing low-density zoning, Vancouver is increasing long-term infrastructure costs and making it harder to address the existing infrastructure deficit.

7. Hindering Economic Growth

By restricting housing in high-opportunity cities like Vancouver, exclusionary zoning prevents workers from accessing better jobs, ultimately stalling economic mobility and growth.

Is Reform on the Horizon?

The B.C. government has introduced legislation to allow multiplexes in single-family areas and to enable apartment buildings within 800 meters of major transit hubs. However, these measures don’t go far enough, and cities like Vancouver still have too many loopholes that allow them to maintain exclusionary zoning policies.

The B.C. Conservative Party has opposed these reforms outright, while the B.C. Green Party has supported housing near transit but voted against multiplex zoning in single-family neighborhoods. With a provincial election approaching, the future of zoning reform hangs in the balance.

The Path Forward

If Vancouver is serious about solving its housing crisis, it must end the apartment ban and allow at least six-storey rental apartments by default anywhere that single-family homes can currently be built. Additionally, non-market housing should receive even greater density allowances to ensure affordability for lower-income residents.

The housing crisis won’t be solved by half-measures. Until the apartment ban is lifted, Vancouver will continue to struggle with affordability, displacement, and economic stagnation. The time for action is now.

January 2025 – Real Estate Market Update

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Metro Vancouver Real Estate Market Closes 2024 on a Strong Note

VANCOUVER, BC – January 3, 2025 – December 2024 saw a notable uptick in home sales across Metro Vancouver, with transactions recorded on the Multiple Listing Service® (MLS®) rising by over 30% compared to December 2023. This surge reflects a growing demand in the real estate market as the year came to a close.

According to the Greater Vancouver REALTORS® (GVR), the total number of residential sales in 2024 reached 26,561, marking a 1.2% increase from 2023’s 26,249 sales. However, this figure remains 9.2% below the 29,261 sales recorded in 2022 and 20.9% below the 10-year average of 33,559 annual sales.

“2024 was a year of transition for Metro Vancouver’s real estate market,” said Andrew Lis, GVR’s director of economics and data analytics. “Following sharp increases in mortgage rates in prior years, declining borrowing costs have begun to re-energize buyers. This renewed interest is becoming increasingly evident in recent monthly sales data.”

Listings and Inventory

A total of 60,388 properties were listed on the MLS® system in 2024, an 18.7% rise from 50,894 listings in 2023 and 9.7% higher than the 55,047 listings in 2022. This figure was also 5.7% above the region’s 10-year average of 57,136 listings.

As of now, the number of active listings on the MLS® system stands at 10,948, a 24.4% increase from December 2023 and 25.3% above the 10-year seasonal average of 8,737.

Price Trends

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,171,500. This reflects a 0.5% increase compared to December 2023 and a marginal 0.1% decrease from November 2024.

“While total sales fell slightly short of our forecast, December data points to strengthening momentum in the market,” Lis noted. “Sales are trending back toward long-term averages, signaling room for growth as we move into 2025. If this momentum continues, we could see an even more active market this year.”

December 2024 Highlights

  • Residential Sales: 1,765 homes sold in December, a 31.2% increase from December 2023 but 14.9% below the 10-year seasonal average of 2,074.
  • New Listings: 1,676 new properties were listed in December, up 26.3% from December 2023, though slightly below the 10-year seasonal average of 1,695.
  • Sales-to-Active Listings Ratio: The overall ratio was 16.8%, with detached homes at 12.1%, attached homes at 23.6%, and apartments at 18.7%.

Market Segment Breakdown

  • Detached Homes: December sales reached 494, up 31.4% year-over-year. The benchmark price for detached homes was $1,997,000, a 2% annual increase, with prices holding steady compared to November 2024.
  • Apartment Homes: Sales totaled 891 in December, a 23.9% year-over-year increase. The benchmark price was $749,900, down 0.1% annually and 0.4% from November 2024.
  • Attached Homes: Townhouse sales saw the largest growth, surging 55.9% year-over-year to 371 transactions. The benchmark price was $1,114,600, up 3.4% from December 2023 and down 0.3% from November 2024.

While 2024 started on a slower note, the year closed with steady price trends and growing buyer activity. These developments set the stage for what could be a more dynamic market in 2025.

Thind Properties Faces Financial Crisis with Multiple Foreclosures and Legal Issues on Maywood, Brentwood, and Other Projects

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Burnaby-based real estate developer Thind Properties is in the midst of a severe financial crisis, facing foreclosure, creditor protection, and multiple lawsuits. The company, headed by founder Daljit Thind, is grappling with unpaid debts on several major projects, including the Maywood development near Metrotown, the Eclipse Brentwood tower, and multiple other ventures in Burnaby, Surrey, and Richmond.

Maywood Development Under Foreclosure

Thind Properties’ troubles began with its acquisition of the Madeira Manor property at 6677 Silver Avenue (4330 Maywood Street) in Burnaby, which was purchased from Kirpal Group in 2024 for $22 million. The project, planned for a 24-storey tower, has now come under foreclosure after the company failed to meet its financial obligations.

The City of Burnaby had previously approved a rezoning plan for the site, with Thind agreeing to assume responsibility for an outstanding density bonus payment of over $5.6 million, plus interest. However, Thind has failed to make any payments on this debt since taking over the property, leading the city to file a lawsuit in December 2024. The total amount owed to the City now exceeds $6.9 million.

On top of this, Thind is facing foreclosure proceedings from multiple lenders, including Bancorp Financial Services and Strandlund Investments, who are owed more than $8 million on a second-ranking mortgage for the Maywood property. If the company cannot pay off this debt, the property could be sold to recover the funds, exacerbating Thind’s mounting financial woes.

Eclipse Brentwood and $189 Million Debt

Thind Properties’ financial struggles extend beyond the Maywood project. The company is also grappling with significant debt related to its Eclipse Brentwood development at 2381 Beta Avenue, a 34-storey tower near Burnaby’s Brentwood Town Centre. Despite being nearly 95% complete, the project has come to a standstill due to financial difficulties.

KingSett Capital, the lender for Eclipse Brentwood, has initiated creditor protection proceedings against Thind, as the company owes $189 million in mortgage debt. This amount continues to accrue interest daily, further compounding Thind’s financial troubles. Additionally, KingSett has uncovered a judgment from the Canada Revenue Agency for over $11 million, further undermining Thind’s cash flow and ability to secure additional financing.

As construction on Eclipse Brentwood has halted, the company is struggling to reinstate home warranty insurance, which is required for the completion of the project. KingSett has stepped in to offer financing to resume construction, but without a clear resolution, the project’s future remains uncertain.

Additional Legal Challenges and Receiverships

Thind Properties is also facing receivership proceedings on several other projects, including the Highline Metrotown tower in Burnaby and the District Northwest development in Surrey. KingSett Capital, which is involved in the receiverships, holds a substantial amount of debt related to these properties as well, totaling approximately $500 million.

In December 2024, Thind Properties was placed under creditor protection in relation to these projects. The company is now scrambling to find a way to navigate its dire financial situation, with the potential sale of assets or restructuring as possible outcomes.

A Developer on the Brink

The ongoing financial challenges of Thind Properties have cast doubt on its ability to recover. With lawsuits, foreclosures, and creditor protection proceedings mounting, the developer’s future remains uncertain. As Thind Properties faces legal and financial scrutiny, it is unclear whether the company can resolve its issues or whether these projects will be taken over by creditors or other developers.

The Maywood, Eclipse Brentwood, and other developments are now mired in a complex web of legal disputes, foreclosure proceedings, and mounting debt, leaving creditors, tenants, and stakeholders in a precarious position. Whether Thind Properties will be able to emerge from this crisis or be forced into liquidation remains to be seen.

Everything you need to know about the new anti-flipping tax in BC

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Understanding the BC Home Flipping Tax: What You Need to Know

The real estate market in British Columbia is set to experience a significant shift with the introduction of the BC Home Flipping Tax. This tax, part of the Homes for People Plan, is designed to discourage short-term property flipping for profit. Let’s break down everything you need to know about this new tax, effective January 1, 2025.

What is the BC Home Flipping Tax?

The BC Home Flipping Tax applies to profits earned from selling residential properties or presale contracts in British Columbia if the property is owned for less than 730 days. The tax is governed by the Residential Property (Short-Term Holding) Profit Tax Act and is separate from federal property flipping rules and other income tax systems.

Key Features of the Tax

  • Effective Date: January 1, 2025.
  • Scope: Applies to residential properties, including housing units and presale contracts.
  • Ownership Threshold: Properties sold within 730 days of purchase are subject to the tax unless an exemption applies.
  • Tax Rates:
    • 20% on profits for sales within 365 days of purchase.
    • Gradually decreases to zero after 730 days of ownership.

Who is Subject to the Tax?

Any individual, corporation, partnership, or trust selling a taxable property within 730 days of purchase may be subject to the tax. This applies to residents of BC as well as individuals or entities outside the province.

Example 1:

  • Property purchased: May 1, 2023.
  • Property sold: January 31, 2025.
  • Tax applies (642 days of ownership).

Example 2:

  • Property purchased: May 1, 2023.
  • Property sold: June 1, 2025.
  • No tax (762 days of ownership).

What Qualifies as a Taxable Property?

  • Residential properties with housing units or those zoned for residential use.
  • Rights to acquire residential properties, such as assignments of presale contracts.

Exclusions:

  • Leasehold interests or properties in exempt locations.
  • Gifts, mortgages, and other transactions that do not involve a transfer of beneficial ownership.

Do You Need to File a Tax Return?

You must file a BC Home Flipping Tax return within 90 days of selling a property if:

  • The property is sold within 729 days of purchase and no automatic exemptions apply.
  • Your exemption requires filing to be claimed.

You do NOT need to file a return if:

  • You owned the property for 730 days or more before selling.
  • Your exemption applies automatically.

Exemptions from the Tax

Certain sales may qualify for exemptions, including:

  • Transfers between related persons.
  • Sales involving primary residences (subject to conditions).

Primary Residence Deduction: If you owned and lived in the property as your primary residence for at least 365 consecutive days, you may deduct up to $20,000 from taxable income.

Example:

  • Sam owned and lived in a property for 20 months before selling. Sam qualifies for the deduction.
  • Amrita owned and lived in a condo for only 6 months. She does not qualify for the deduction.

How is the Tax Calculated?

The tax applies to the net taxable income from the sale of a property owned for less than 730 days. The rate decreases the longer you own the property, with no tax owed after 730 days.

Days of Ownership Calculation:

  • Start counting from the day you purchase the property (typically the closing date).
  • End with the day you sell the property (typically the closing date of the sale).

Impact on Presale Contracts and Related Transactions

  • For presale contracts, the date of purchase is typically when you enter the contract or pay the deposit.
  • Sales between related persons may use the original purchase date of the related seller for tax calculations.

Example 1:

  • A developer enters a presale contract on June 1, 2025, for a condo completed on March 1, 2027.
  • The ownership date for tax purposes is June 1, 2025.

Example 2:

  • Michael buys a property from his father, who originally purchased it in 2020.
  • For tax purposes, Michael’s ownership date is deemed to be the father’s purchase date.

Why Does This Matter?

The BC Home Flipping Tax is a critical measure to curb speculative real estate practices and promote housing stability. If you’re considering selling property in BC, understanding these rules is essential to avoid unexpected tax liabilities.

Stay informed and plan your real estate transactions carefully to navigate these new regulations. For more details, consult a tax professional or visit the official government resources.

 

Buyer Demand Surges in October: Vancouver’s Real Estate Market Sees Significant Uptick

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VANCOUVER, BC – November 4, 2024 – After months of sluggish performance, Metro Vancouver’s housing market saw a sharp increase in buyer demand in October. Home sales surged by over 30% compared to the same month last year, marking a significant shift after sales had been tracking around 20% below the ten-year seasonal average.

According to the Greater Vancouver REALTORS® (GVR), 2,632 residential properties were sold in the region during October 2024, representing a 31.9% jump from the 1,996 sales recorded in October 2023. While this was still 5.5% below the ten-year seasonal average of 2,784 sales, the rebound in activity signals renewed buyer interest after a prolonged period of caution.

Mortgage Rate Cuts Spur Buyer Confidence

Andrew Lis, GVR’s Director of Economics and Data Analytics, attributed the surge in sales to recent reductions in mortgage rates. “Typically, lower mortgage rates boost demand, and the strong sales numbers for October suggest that buyers may finally be reacting to more affordable borrowing costs after sitting on the sidelines for months,” Lis explained. He added that the recovery may have come as a surprise to some market watchers, but after four consecutive rate cuts by the Bank of Canada, the rebound was “only a matter of time.”

Listings and Inventory on the Rise

New listings were also on the rise in October, with 5,452 detached, attached, and apartment properties added to the Multiple Listing Service® (MLS®) system. This represents a 16.9% increase from the 4,664 properties listed in October 2023 and is 20% higher than the ten-year seasonal average of 4,545.

In total, there were 14,477 active listings on the MLS® in Metro Vancouver, a 24.8% jump compared to the same period last year, when 11,599 properties were listed. This figure is also 26.2% higher than the ten-year average of 11,475, giving buyers more options in an increasingly active market.

Sales-to-Listings Ratio Edges Toward Seller’s Market

The sales-to-active listings ratio for October stood at 18.8%, with notable variations by property type. Detached homes had a ratio of 13.4%, while attached homes (22.5%) and apartments (22.2%) moved closer to a seller’s market. Typically, downward pressure on prices occurs when the ratio falls below 12%, while upward price pressure builds when it surpasses 20% over several months.

“Although October’s numbers are encouraging, it’s too early to call it a full-blown trend,” Lis cautioned. “Recent data suggests that the market has been balanced, with prices softening over the past few months. However, with this uptick in sales, particularly in the attached and apartment segments, we could be approaching a seller’s market across all property types. This may signal the end of the recent period of price moderation.”

Price Trends: Modest Declines in Benchmark Prices

Despite the surge in sales, prices remained relatively stable, with modest declines recorded across most property types. The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $1,172,200 in October 2024, a 1.9% decrease from October 2023 and a slight 0.6% decline compared to September 2024.

Detached home sales reached 724 in October 2024, a 25.5% increase from the 577 sales in the same month last year. The benchmark price for detached homes was $2,002,900, a 0.3% increase from October 2023 but a 1% drop from September 2024.

Apartment sales soared, with 1,393 units sold, a 33.4% increase year-over-year. The benchmark price for apartment homes was $757,200, down 1.6% from October 2023 and 0.6% lower than September 2024. Attached home sales also saw impressive growth, with 501 sales representing a 40.7% increase compared to October 2023. The benchmark price for townhouses was $1,108,800, a 0.4% increase year-over-year and a 0.9% rise from the previous month.

Where Are Housing Prices, Interest Rates, and the Economy Headed? Insights from Scotiabank’s Chief Economist

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If you’re like most Canadians, you’re feeling the impact of fluctuating interest rates, housing prices, and an economy that’s been anything but predictable. Scotiabank’s Chief Economist, Jean-François Perrault, recently shared his thoughts on these critical topics and offered insights into where we might be heading. Here’s what he had to say—and what it could mean for all of us.

The Interest Rate Rollercoaster: Are More Cuts Coming?

The Bank of Canada has already slashed interest rates to counter slow inflation, but is more easing on the horizon? According to Perrault, there’s a less-than-even chance of another deep cut. The recent adjustments were primarily to tackle slower inflation rather than a dire need to stimulate economic growth. Although rate cuts can provide some relief, they aren’t the cure-all, especially if inflation remains low but steady.

In Perrault’s view, rate cuts are more likely to happen if economic activity starts to dip unexpectedly. For now, though, he’s not forecasting drastic measures; he believes that the current rates are generally aligned with Canada’s modest economic recovery.

Housing Prices: What’s the Real Outlook?

Housing prices have been top of mind for many, especially with how volatile they’ve been in recent years. Perrault acknowledges that high interest rates have cooled the market, but he doesn’t foresee any major crashes. Instead, he expects a more balanced market as we move forward. He suggests that while we may not see another explosion of housing price growth, neither should we brace for a steep drop.

His message? Moderate growth is likely, but it’s still a tough market for first-time buyers. Many potential buyers are waiting to see if interest rates will ease further before jumping in, which has kept demand somewhat in check. This pause could maintain stability in prices, though Perrault also notes that local variations—like in Toronto and Vancouver—will likely continue as supply and demand fluctuate.

The Broader Economic Picture: Stability or More Turbulence?

On the bigger picture, Perrault believes Canada’s economy is positioned to recover gradually. He predicts modest GDP growth, between 1.3% and 2.1%, and expects inflation to remain close to the Bank of Canada’s 2% target. It’s a cautiously optimistic outlook, with the potential for steady, if unspectacular, growth.

One significant factor is Canada’s low unemployment rate, which suggests underlying resilience in the economy. While growth is slow, low unemployment can support stable consumer spending, which is essential for economic health. Perrault argues that while we might not see rapid growth, the combination of steady employment and gradual inflation control bodes well for stability.

What Does This Mean for Canadians?

For Canadians, the takeaway is to plan for a relatively stable, if slow-growing, economic landscape. Homebuyers might not see dramatic changes in prices or rates, but there could be smaller adjustments, especially if inflation nudges the Bank of Canada to reconsider rate changes. For those looking to make significant financial decisions, caution and careful planning remain key.

Perrault’s insights reflect a sense of patience—he suggests that both the housing market and the economy are likely to settle into a more predictable, if slower, pattern. For now, he sees no signs of imminent recession, which is reassuring news for those bracing for the unexpected. Instead, the outlook for Canada’s economy, interest rates, and housing market is one of cautious optimism and steady adaptation.

In short, if you’re navigating this market as a buyer, seller, or simply a concerned Canadian, Perrault’s insights offer a grounded perspective: stay aware, but don’t expect massive upheavals.

Bank of Canada’s Big Rate Cut: What It Means for Vancouver’s Housing Market

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The Bank of Canada recently announced a significant rate cut of 50 basis points, or half a percent, marking a major shift in the country’s interest rate environment. This “jumbo cut” has lowered borrowing costs substantially, prompting questions about what may lie ahead for the Vancouver real estate market.

While it’s easy to speculate on the future, my approach is to base predictions on past data, providing a more solid foundation than simply guessing. Here’s an overview of what happened the last time the Bank of Canada made a similar rate cut, followed by practical advice on what to consider if you’re thinking about entering the market now.

Historical Insight: The 2009 Rate Cut

The last major cut of this magnitude occurred in March 2009, during the global financial crisis. At that time, Canada’s economy felt the shockwaves of the U.S. housing market crash, with impacts in Vancouver’s housing market as well.

  • February 2009: Before the rate cut, interest rates were set at 1%, and market activity was already on the rise. Total sales in Greater Vancouver stood at 1,480—a 94% increase over January.
  • March 2009: Following the cut to 0.5%, sales jumped to 2,269 units, indicating a quick response to the lowered rates.
  • April–June 2009: Activity continued to surge, with April sales reaching 4,649 and remaining robust into the summer months.

However, the rising sales volume didn’t immediately translate into price increases. It wasn’t until May 2009 to May 2010 that prices began climbing significantly, illustrating a lag between rate cuts and price growth.

What This Means for Today’s Market

While there are clear similarities between 2009 and today, there are also some critical differences. Current interest rates are still much higher than they were in 2009, and we’re entering a seasonally slow period for real estate. Typically, activity tapers off in December and January, so the Bank of Canada’s rate cut may not drive a quick market surge.

Nonetheless, this cut signals the start of a potential trend, with more rate reductions anticipated over the next year. This forecast, supported by various economic reports, suggests that lower interest rates could boost the real estate market as we move into 2025.

Questions to Consider if You’re Thinking About Buying or Selling

If you’re on the fence about entering the market, here are some points to reflect on:

  1. Has the Market Bottomed Out? – Trying to “time” the market is notoriously difficult, but examining past patterns may give you an edge. Do you believe prices have reached their lowest, or do you expect further drops? Consider factors like ongoing rate cuts, immigration rates, and inventory levels.
  2. Is Now the Right Time to Buy? – With rates potentially declining further, purchasing now could lock in favorable financing options, but keep in mind that the market could still shift depending on broader economic conditions.
  3. Are You Prepared for Market Changes? – If you’re a seller, spring 2025 might see a busier market as buyers re-enter due to lower rates, potentially driving prices up. If you can afford to wait, holding off until rates stabilize further may be beneficial.

Key Takeaways for Vancouver’s Market

Lower rates tend to stimulate activity, but the pace of change varies. Sales volume might increase before prices do, as we saw in 2009. This means that if you’re aiming to purchase at a lower price, acting sooner could work in your favor before prices potentially climb. However, if your goal is to sell, waiting for rates to stabilize or drop further could lead to better offers.

For more specific guidance, consider consulting economic forecasts or staying tuned to market updates. And if you’re a first-time home buyer unsure about the process, I’ve prepared a free guide to help you understand the steps to buy in Greater Vancouver.

If you’d like tailored advice, don’t hesitate to reach out. As a Vancouver real estate agent, I’m here to help you make informed decisions in a changing market.

Rent Prices in Vancouver Plummet. Here is why!

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

At the beginning of this year, the federal government introduced a cap on international student permits, aiming to relieve pressure on housing and other essential services. This policy appears to be making an impact. According to a recent report by Rentals.ca and Urbanation, Canada has seen its slowest annual rent growth since October 2021.

The report, published on Wednesday, revealed that the average asking rent for all types of residential properties in Canada reached $2,193 in September, reflecting a modest 2.1% increase year-over-year. By comparison, in August, the annual rent growth was higher at 3.3%.

September marked the fifth consecutive month (since May) where the rate of rent inflation has slowed. However, the report also noted that average asking rents were still 13.4% higher than two years ago and a significant 25.2% higher than three years ago during the COVID-19 pandemic.

Shaun Hildebrand, President of Urbanation, pointed out that international student enrollments have dropped by about 50% from their peak levels, with the most pronounced effects in Ontario and British Columbia (BC).

In Ontario, rents saw the largest year-over-year decline in September, dropping 4.3% to an average of $2,380. Similarly, in BC, rents fell 3.2% annually, landing at $2,570. Despite these declines, BC still had the highest average rent among Canadian provinces.

The report further highlighted that rent decreases in Ontario and BC were observed across all unit types. One-bedroom apartments in BC saw the largest drop, down 4.9% to $2,273, while two-bedroom units in Ontario fell by the same percentage, settling at $2,619.

The report also provided a closer look at Canada’s largest municipal rental markets, where average asking rents have dropped year-over-year. In Vancouver, rents fell for the tenth straight month in September, with a notable 9.5% decline. In Toronto, rents decreased for the eighth consecutive month, down 8.1%. In Toronto, the average apartment rent reached a 25-month low of $2,668, while Vancouver still had the country’s highest apartment rent, averaging $3,023.

For specific unit types, one-bedroom apartments saw the largest rent declines in both Vancouver and Toronto, with decreases of 11.4% and 7.8%, respectively, bringing prices down to $2,673 and $2,418. On the other hand, three-bedroom apartment rents performed the best across Canada’s six largest markets in September.