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Burnaby BC 1 bedroom condo market update – December 2016

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

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

WHAT you NEED to KNOW about BURNABY housing market – DEC 2016 update

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

Burnaby house for sale

Happy New Year guys! Here is a detailed breakdown of the housing market in Burnaby BC for December 2016. We will only focus on detached houses. New construction is excluded from this breakdown. Condos and townhouses are also excluded (Burnaby condo breakdown can be found here).

Average Sales Price of Houses in Burnaby in December 2016 (see graph below)

Burnaby, Dec 2016: $1,591,410 | +5.3% (change since December 2015)

November 2016: $1,491,466

We can see the price increase of over 5% as compared to December of last year. The average sales price is also up as compared to last month. This could be a good sign for the sellers heading into 2017.

 

Average Percent of Original Price sellers in Burnaby are getting for their homes in December 2016 (see graph below)

Burnaby, Dec 2016: 93.5% | -8.8% (change since December 2015)

November 2016: 94.2%

Since the height of the real estate market in the summer and spring of 2016 average percent of original price has been declining. Home sellers are selling their houses 5-7% under their original asking price. We haven’t seen such low numbers since 2013.

 

Total Inventory of Detached Houses for Sale in Burnaby in December 2016 (see graph below)

Burnaby, Dec 2016: 236 | +41.3% (change since December 2015)

November 2016: 419

There is substantially more inventory on the market as compared to December of 2015. However the inventory levels have dropped significantly as compared to last month. Sellers seemed to be pulling the properties off the market in December.  A large number of these properties will be back on the market at the beginning of 2017.

 

 

Number of the New Listings on the market in Burnaby in December 2016 (see graph below)

Burnaby, Dec 2016: 35 | -45.3% (change since December 2015)

November 2016: 82

As can be expected for this season there are very few listings. In December 2016 we had half of the new listings as compared to the December of last year. To be fair, December 2015 was an usually busy year for detached houses in Burnaby.

 

Total Number of Detached Houses Sold in Burnaby in December 2016 (see graph below)

Burnaby, Dec 2016: 40 | -56.5% (change since December 2015)

November 2016: 48

We see lower than usual number of sales in the last quarter of 2016. Slight decline in sales as compared to November 2016. However, more than a 50% in sales as compared to December of 2015.

 

Sales to Active Listings Ratio for Detached Properties in Burnaby in December 2016 (see graph below)

Burnaby, Dec 2016: 0.169 | -69.3% (change since December 2015)

November 2016: 0.12

Burnaby housing market is still a “buyers” marker in December 2016. Huge difference when we compare to earlier this year when we had a very strong “sellers” market.

In conclusion, the housing market in Burnaby continues to be a “buyers” market. The average sales price has not gone down as compared to November of this year. In fact the average sales price has gone up. Overall we see low levels of inventory and low transaction levels. Burnaby detached housing market is “slow” heading into 2017.

If you found this article helpful leave a comment below. 

*all the information has been take form the Real Estate Board of Greater Vancouver.  

Are the interest-free housing loans for first-time buyers a good idea? [OPINION]

Oleg Articles, First time buyers, For Buyers, Opinion

 

On December 15th 2016, Premier Christy Clark unveiled a new loan program for the first-time home buyers. This loan program will lend money to the first-time home buyers who cannot come up with the downpayment. The loan will be interest-free for up to 5 years.

There has been some criticism for this program. The primary criticism is that it will actually make housing more unaffordable. Which is the opposite of its purpose.

From my experience most first-time buyers are looking for 1 bedroom condos. For the most part the 1 bedroom condo market in Greater Vancouver is a ‘seller’s market’. (Read more about: Burnaby 1 bedroom condo market here.)  There is a lot of demand for these “starter” 1 bedroom units but not a lot of supply. By making it easier for the first-time home buyers to get into the real estate market the demand for these units is likely to go up. The increase in the demand will of course lead to the increases in price.

On the other hand, it’s very hard for young people to save up enough money for the downpayment. This program will potentially help many first-time buyers get into the real estate market sooner than they would with out. In most cases buying it’s better than renting. With the low interest rates mortgage payment are almost the same as rent.

In my opinion this program will cause the prices for “starter” condos and townhouses to go up in the long run. What Metro Vancouver but especially the City of Vancouver needs it to green-light more development projects. We need to change zoning bylaws for many of Vancouver areas and start building more strata condo buildings. There is a lot of demand and not a lot of supply. To make Vancouver real estate market more affordable we must increase the inventory.

If you are a first-time buyer thinking of getting into the real estate market in Metro Vancouver I suggest getting started as soon as possible. Don’t wait until the prices of the “starter” units go up thanks for the very program.

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

 

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.

EVERYTHING you NEED to KNOW about Burnaby BC housing market – December 2016

Oleg Articles, First time buyers, For Buyers, For Sellers, Statistics

burnaby bc home

Here is a detailed breakdown of the Burnaby detached housing market for November 2016 and for the past 3 years. In this breakdown I will solely focus on detached houses in Burnaby South, Burnaby North and Burnaby East areas. We will only look at the resale properties, brand new construction is not included.

See all houses for sale in Burnaby BC here.

*All of the market statistics and graphs were taken from the Real Estate Board of Greater Vancouver.

Lets start with Average Sales Price of Houses in Burnaby in November 2016 and for the past 3 years (see graph below)

Burnaby: $1,491,466 | +6.9% (change since November 2015)

The sales price is up by almost 7 percent as compared to November 2015. However, we see a significant drop in the sales price as compared to Spring and Summer of 2016. Prices started to dip in August of 2016, right around the time “foreign buyers tax” was introduced.

 

Next, lets have a look at the Average Percent of Original Price sellers in Burnaby are getting for their houses in November 2016 and for the past 3 years (see graph below)

Burnaby: 94.2% | -7.0% (change since November 2015)

There is a small decline in the percentage of then original price as compared to November of 2015. If we compare current average percent of original price with the average percent of original price in Spring and Summer of 2016 the different is substantial. At the hight of the market this year seller were receiving offers 5-10% over their original asking price.

 

Next, Total Inventory of Detached Houses for Sale in Burnaby in November 2016 and for the past 3 years (see graph below)

Burnaby: 394 | +60.8% (change since November 2015)

We see substantially more inventory on the market this November as compared to November 2015. However, total inventory for this November is still right around the 10 year average.

 

Now, lets take a look at the Number of New Listings on the Market in Burnaby BC in November 2016 and for the past 3 years (see graph below)

Burnaby: 82 | -7.9% (change since November 2015)

There are actually fewer new listings on the market this November as compared to November 2015. The number of new listings in November 2016 is around the 10 year average.

 

Lets take look at Total Number of Sales in Burnaby in November 2016 and for the past 3 years (see graph below)

Burnaby: 48 | -55.1% (change since November 2015)

The total number of sales for November 2016 is less than a half of sales in November 2015. The number of sales for this November is alarmingly low, some of the lowest numbers we’ve seen in the last 10 years. If the sales don’t pick up in 2017 we might have a lot of leftover inventory which might cause prices to dip even more.

Lastly, lets have a look at Sales to Active Listing Ratio for house in Burnaby in November 2016 and for the last 3 years (see graph below)

Burnaby: 0.122 | -72.1% (change since November 2015)

We are currently in a “buyers market”. In November 2015 we had a strong “sellers market”. Real estate market for detached houses has shifted from “sellers market” to “buyers market” in July 2016. The “foreign buyers tax” (introduced in August 2016) has added breaks to the already slowing down market.

 

The increasing amount of inventory with the lack of buyers’ demand might cause house prices in Burnaby to dip even more in the near future.

I hope you found this article helpful. If so, please, share it with someone who’s looking for a house in Burnaby or someone who owns a Burnaby home and would appreciate the extra information.

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

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

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

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.

Summer 2016 – Vancouver Real Estate Predictions

Oleg Articles, For Buyers, For Sellers, Opinion

What to expect from the Vancouver real estate market for the summer 2016 season.

Vancouver Coal Harbour Marina

 

 

Friends, we are entering uncharted waters. The demand is at the all time high. The inventory is the at the all time low. We are having one record-breaking month after another. What’s next? Will the market crash? Will the prices go down? Will the market remain just as strong?

Short answer – “I don’t know”. In fact nobody knows, and whoever claims that they know is probably a psychic. However, as an experienced Vancouver Realtor I can make some predictions.

Real Estate Prices

We can anticipate the prices to go up slightly over the next few months in most of the Vancouver neighbourhoods. The price increase will not be as extreme as what we’ve seen in the winter and spring of 2016.

Condo prices in some Vancouver neighbourhoods might even plateau. In my opinion we will not see any price drops during summer 2016.

Buyers’ Demand

Buyers’ demand in Vancouver remains strong. However, we can already see early signs of the buyers fatigue. Properties that were receiving 8-10 offers in March and April are now getting 3-4 offers. Still a lot of demand. Perhaps people looking for properties during summer months notice a drop in the competition levels.

The market is still a very strong sellers market and will most likely remain a strong sellers markets for the summer months.

Inventory Levels/Houses or Condos for Sale

Vancouver real estate market tends to go through the seasons. Spring is generally a busy season and summer is slower.

We have seen a fifty percent drop in inventory from the previous years.  We can anticipate even lower levels of inventory during this summer season. This could be a good opportunity for potential sellers to list their home as there are less competing properties.

In summery, the Vancouver real estate market will slow down a little for the summer months.  The lower buyer demand will be balanced out by the lower inventory levels. For the most part – business as usual.

 

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

Spring 2016 – Vancouver Real Estate Market Update

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

What you should know about the Vancouver real estate market in the spring 2016.

vancouver skyline

Vancouver real estate market is a topic of conversation. It’s hard to turn on the news without hearing about a tear-down that’s been sold for three hundred thousand dollars over asking price or how the last few months were record breaking for local real estate.

Here are the trends I’ve noticed over the last couple of months:

The buyers demand seems to be cooling off as we head into the summer season.

Properties that used to receive 8-10 offers now receive 3-4 offers. Real Estate market activity usually goes though seasonal cycles. There are high activity seasons such as spring and fall, and lower activity seasons such as summer and winter.

A cool-off in real estate activity is natural as we enter summer season. But this could also be an early sign of over-all cool down of the hyper-active Vancouver real estate market. It is still too early to tell which one is it.

The prices are still remaining high and show no signs of going down.

Even though the buyers demand is cooling-off the real estate market still remains a very strong sellers’ market.

Real estate prices continue climbing up but perhaps not as fast as they did at the end of winter/early spring 2016. As we head into the summer season, we can anticipate real estate prices to slow down.  More on this in my article –  “Summer 2016 – Vancouver Real Estate Predictions”.

Inventory is still at the all time low.

We have seen a fifty percent drop in inventory from the previous years. This lack of available properties for sale is one of the most important components fuelling such strong seller market.

We can expect even less inventory being available for the upcoming summer season, which will balance out the lower buyer demand and continue current real estate climate.

In summery, Vancouver real estate market remains a very strong sellers market with roughly 3-4 buyers for every property for sale. Until we solve the demand issue in Vancouver or there is a major change effecting real estate market (ex. increase in the interests rates) we will continue seeing a version of the current market climate for the foreseeable future.

 

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

Why is AirBnB evil? According to Vancouver

Oleg Articles, News, Opinion

 

Lately, there has been a lot of debate about AirBnB. Is AirBnB legal? Should it be allowed? Does it effect real estate prices? Does it effect rental rates? Is it a good investment strategy for landlords? All are good questions. In this article I will attempt to answer some of them. Keep in mind I don’t have any preferences for or against AirBnB. I am simply trying to give you some facts and explanations as to why Vancouverites might be against AirBnB.

Is AirBnB legal in Vancouver?

No, according to the bylaws imposed by the City of Vancouver – AirBnB is not allowed. However, this city bylaw is virtually impossible to impose and there hasn’t been any cases (as far as I know) of the City penalizing anyone…yet

Does AirBnB cause rental rates to go up?

Yes, it does! Let’s say you have 1,000 unfurnished long term rental units. Suppose 20% of the landlords decide to rent out their units on short term rentals with AirBnB instead of keeping them as unfurnished long term rentals. All of the sudden the demand for the remaining 800 units increases and the rent rate goes up.

 Does AirBnB effect real estate prices?

There is no definitive answer to this question. AirBnB might effect real estate prices slightly. As the rental rates increase more investors are interested in buying real estate thus driving up the real estate prices.

Why are Stratas in Vancouver against AirBnB?

There are a few reasons why more and more Stratas are creating bylaws specifically against AirBnB and even going as far as monitoring the website for units within the building. Landlords caught advertising their units for rent on the website face penalties.

  1. Security. Many Stratas would argue that giving strangers access to the building is dangerous and makes some residents feel unsafe.
  2. Insurance. If you rent out your unit on AirBnB some insurance companies will not cover you. If your short term tenant off of AirBnB floods 3 floors below, you might be responsible to pay for the damages out of your own pocket. Some damages could cost hundreds of thousands of dollars. Stratas don’t like to take any chances.
  3. Noise. A lot of people that use AirBnB are in town on vacations and like to throw parties.
  4. Reduce quality of the building. Tenants in general don’t have a great reputation for taking care of the common properties such as hallways, party rooms, gyms and swimming pools. Stratas fear that short term tenants might be even more careless with the common property.
  5. Building bylaws. Every building has a set of rules and bylaws that everyone follows. Long term residents of the building know these rules and follow them (for the most part). Having new tenants in the building a few times a week makes it very hard to enforce any of these rules.

AirBnB is a new concept and like most new concepts causes a lot of controversy. It will be interesting to see what happens with AirBnB in Vancouver over the next few years and what effect it will have on local real estate as well as hotel industry. What are your thoughts on AirBnB in Vancouver?