How Much Is Municipal Government Regulation To Blame For The Current Real Estate Housing Affordability Crisis?

The housing affordability crisis in the Lower Mainland has everyone scurrying around looking to blame someone. This problem has a lot of moving parts. A proportion of the vocal blame has been targeted at foreign investors, rightly or wrongly so. But there is another side of the coin – a lack of housing supply. This may be attributed, as some would argue, to the plethora of municipal government regulations and actions.

In July 2016, the Fraser Institute published a 52-page report that suggested municipal regulation of residential development has restricted housing supply, encouraging property prices to increase and distort local economies.

The report looked at five factors that continue to slow down the supply of new housing in Canadian cities (notably Toronto, Vancouver and Calgary): approval timelines, timeline uncertainty, council and community impacts, costs and fees and the prevalence of rezoning.

Developers are aware of the housing shortages, and are fully committed to remedy this. While developers are well stocked with land, realizing the project remains tough. Often, a site with no rezoning or other approvals could require as much as 2-3 years to bring to completion. These municipal approval delays are exactly what is exacerbating the affordability issue, amongst other factors.

The study also found that developers will simply skip over a region if constructing housing becomes too costly or onerous – again, this doesn’t help the Lower Mainland’s housing problem.

Take Maple Ridge for example. Here, slow approval times mean that just one or two projects at a time are selling, creating a virtual monopoly lacking the competition that can yield pricing benefits.

Local municipal councils are known for the extra regulatory hurdles they impose on homebuilders and developers. They may engage in protracted and often arbitrary negotiations with homebuilders before approving new buildings.

In exchange for permission to exceed the zoning limits, municipalities often demand that home builders finance local amenities such as parks, playgrounds etc. The costs of these amenities can outrun the actual expense of the benefits.

The affordability crisis in Vancouver was a major issue during the recent Provincial elections and still remains one of the hottest topics on the Vancouver real estate scene. There are many points of view and we would welcome your comments and point of view.

In these market conditions, you need to work with a real estate company that has the experience and know how on getting you the right home. Contact us and let one of our real estate professionals obtain the best results for you.

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Housing Supply Not Keeping Pace with Demand in Most BC Regions

Vancouver, BC – June 13, 2017. The British Columbia Real Estate Association (BCREA) reports that a total of 12,402 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, down 7.9 per cent from the same period last year. Total sales dollar volume was $9.33 billion, down 4.0 per cent from May 2017. The average MLS® residential price in the province was $752,536, a 4.2 per cent increase from the same period last year.

“Market conditions have tightened considerably this spring as an upturn in consumer demand has not been accompanied by a rise in homes listed for sale,” said Cameron Muir, BCREA Chief Economist. “The supply of homes for sale in the province has fallen 50 per cent over the past five years.”

“The entire southern portion of the province is experiencing a shortage of housing supply, which makes continuing upward pressure on home prices inevitable, at least in the near term,” added Muir. Total active listings in the province were down 11.1 per cent to 28,404 units from May 2016. The ratio of home sales to active listings was well over 20 per cent in nine of the province’s 11 real estate boards, and over 50 per cent in Vancouver, the Fraser Valley, Chilliwack and Victoria.

Year-to-date, BC residential sales dollar volume was down 25.2 per cent to $30.6 billion, when compared with the same period in 2016. Residential unit sales declined 20.1 per cent to 43,158 units, while the average MLS® residential price was down 5.7 per cent to $709,541.

For the complete article, please click here.       [LINK]

Credit: British Columbia Real Estate Association (BCREA)

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9 Important Questions You Must Ask Before Renting A Home

The hot Vancouver real estate market has made many people millionaires. While many sellers have bought another property, others have not considered buying and have decided to rent instead.

If buying or selling a home is a big decision, finding a house or apartment to rent is not in any way smaller. This is what many ex-homeowners and first time renters don’t realize. The home you rent will affect your life and lifestyle.

So here are some important questions you MUST ask before you rent:

What is included in the lease?

You should read the lease terms very carefully. If you don’t understand an aspect of the lease, you must get clarification from the landlord. Important questions concern:

- Length of lease

- Amount of security deposit

- Rental increases

- Early lease termination

Are pets allowed?

If you have a pet, this is probably one of the first questions you must ask, because unless you want to give up Fido, you will not be able to move in if pets are not allowed. There is usually a fee for pets.

What are the penalties for early lease termination?

If you are renting and looking for a home to eventually buy, this is important to know, because you may find a home and want to move out before your lease is up. Usually, there is a prescribed penalty for breaking a lease. Avoid landlords who do not allow you to break the lease for any reason.

Will I be able to renew the lease?

Some landlords will eventually plan on selling the property or moving in themselves. Try and be aware of the landlord’s intentions, especially if you plan on staying for a few years. There is nothing worse than moving twice in a year!

Which utilities/services are involved?

Some utilities may be covered by the rent, and others may not. In many apartments, heat, water and gas are covered. In homes, this may not be the case. If there is a garden who is responsible for its upkeep? What about minor repairs? Make sure you are aware of what your rent includes.

When is the home vacant?

If the home is available September 01 and you cannot move in until October, then the rental will not work out. Sometimes the landlord will be flexible especially if he/she feels that you are the kind of tenant he/she is looking for. However, with the current shortage of and demand for rental space, it would not be expedient to delay the possession date.

What is the maintenance policy?

You need to rent from a proactive landlord who will make the necessary repairs in a timely manner. You should be able to get a good idea of the landlord’s actions by noting the existing the condition of the property. Make sure you point out and document any defects before you move in.

What is included in the rent?

You should ask about what appliances, furniture etc. are included in the rent. Make sure you inspect the appliances in a very thorough manner. Taking an inventory of what is included and getting the landlord to sign is a good practice.

Will it be possible to make changes to the décor?

Most leases require you to return the property in the same condition as you receive it. Some landlords require written permission before any painting, putting up wallpaper or other forms of decorating are performed. Make sure you are aware of this, or you may risk losing your security deposit.

Virani can help you find a collection of homes, apartments, townhouses and penthouses for rent. We are industry leaders in the Vancouver Real Estate market and therefore you have the comfort of knowing that you are getting good value for your dollar when renting through us. If you are currently looking to rent, please complete and submit our form or call 604-695-1000. Our Property Rental Specialist will contact you shortly.

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How The British Columbia Real Estate Board (BCREA) Plans to Improve Housing Affordability in this Province

Last month (April 19), the BCREA proposed a “five pillar approach” to address housing affordability for renters, homebuyers and homeowners across the province. According to Robert Laing the CEO, the recommendations “provide a clear pathway toward making homes more accessible and affordable for British Columbians.”

The 5 pillars include recommendations to:

1. Adjust the Property Transfer Tax (PTT)

According to the BCREA, BC has the highest PTT in Canada and the association wants to ensure that the PPT reflects the current market. It proposes increasing the exemption threshold for first time buyers and raising the 2% threshold from $200,000 to $525,000.

2. Assist consumers with housing costs

To achieve this, BCREA recommends increasing the withdrawal limit of the Home Buyer’s Plan and extending its eligibility to those who relocate to secure employment.

3. Encourage the creation of more rental housing

It proposes to create more housing stock by allowing investment real estate sellers to recapture previously claimed depreciation and allowing a deferral of capital gains tax.

4. Promote urban density

According to the association, this can be achieved by using PTT revenue to raise the number of large (3 bedroom) homes along transit corridors in lower density neighborhoods, and promoting public education to increase the acceptance of new developments.

5. Promote best practices among local governments

The BCREA encourages changes in the municipal development application process, which would include reducing turnaround times for getting construction permits.

For a link to the BCREA April 19 news release click here        [LINK].

To learn more about Virani Real Estate Advisors or to discuss a property purchase or sale, fill out this form, visit one of our offices, or call 604.913.1000.

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Backyard Composting – It’s Easy and Your Garden Will Thank You

Here’s what the West Vancouver District website says about composting:

“Backyard composting is the most cost-effective and environmentally friendly way to recycle food scraps and yard trimmings. If you’re composting at home, thank you and please carry on! You are diverting waste from the landfill and getting a rich fertilizer for your garden.”

Compost consists of plant sustaining nutrients that improve soil texture, helps retain moisture and microbes that are essential for healthy plants and regulates soil pH.

How to make compost

It’s easy. Table scraps that are sent to the landfills can be used as compost, as well as leaves and garden clippings. Composting this organic waste is a great way of reducing the strain on our landfills.

  1. Designate an area in your garden that is far from your home, as a compost heap can emit unwelcome odors.
  2. Buy a compost drum or bin from your local hardware store, or build your own out of wood.
  3. Layer the bottom with loose twigs and branches allowing air to circulate.
  4. The best way of creating a compost pile is to create layers. Start with a layer of grass clippings and table scraps. Cover this with a layer of soil. Repeat this process until the drum is full.
  5. To ensure that the compost pile is damp, sprinkle with water occasionally and mix the contents every week or two. This aerates the materials and hastens the composting process. Don’t add meat scraps as this attracts rodents.
  6. Let this “cook” for a while (2-3 months).

When ready, you have a rich nutritious fertilizer that will help your garden blossom, without the use of chemicals.

It is important to get the correct advice when you are buying a home. We have been in the real estate business for over 28 years and know just about everything there is about buying a home. Contact us or call us on 604 913 1000 if you are planning to buy a home.

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REBGV Market Update April 2017 – The Seller’s Market Continues: Townhomes And Condos Are Hot

The April 2017 stats released by the Real Estate Board of Greater Vancouver (REBGV) show that demand for condominiums and townhouses continues to drive the Metro Vancouver real estate market, and we are firmly in a seller’s market.

By looking at the following key indicators, we can get a better understanding of last months’ results:

Home Sales

In Greater Vancouver there were 3553 registered home sales on the MLS last month. This number is down 25% from April 2016, and 4.8% above the April 10 year sales average. For the first 4 months of the year, townhomes and condos accounted for 68% of all residential sales, making them the most sought after property types in today’s market. The sales are up 10% from the same period last year.

Home Listings

In April 2017, there were 4907 new listings, up 3% from March 2017, but down 20% from April 2016.

Home Prices

The benchmark price for all residential homes in Metro Vancouver in April 2017 was $941,100. This is up 2.4% from March 2017 and up 11.4% from April 2016. Over the last few months, condos have increased in price by 8.2%, townhomes by 5.3% and detached homes by 2.8%.

Sales-To-Active Listings Ratio

This ratio explains the relationship between supply and demand that influences price. The ratio for April is 45% across all property types. Despite the fact that it is down 2% from last month, the ratio is firmly entrenched in seller market territory.

When the ratio is around or below 12% for a sustained period, then there is downward pressure on prices, and when it is above 20% for a sustained period, there is upward pressure.

Get the full report here.

Buying a home in a seller’s market requires a real estate professional with experience and local knowledge. If you are looking to buy a home in the Greater Vancouver area, contact us. We are one of Vancouver’s established real estate firms and have been in the real estate business for over 28 years.

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6 Great Tips On How To Buy A Home In A Hot Real Estate Market

Buying in a seller’s market can be frustrating, especially when you are competing with many buyers for a limited inventory. Your challenge is not just finding the right home but beating out other homebuyers who are just as keen as you.

Expecting to find the right home by casually visiting Open Houses and viewing online listings cannot work in a seller’s market.  So here are some important tips to ensure that you have an advantage over other potential buyers vying for the same property:

 1.    Know your limits before you start.

Know how much you are willing and able to pay and what you are willing to compromise on in terms and conditions. Once you know this, then you are in a better position to decide whether or not you should make an offer. You will not let emotions bias your negotiations if things do not go your way.

2.     Get your finances in order.

Make sure you are in a financial position to buy. That means getting enough mortgage financing pre-approved before you start the negotiating process. You want to prove to the seller that you will be able to pay for the house and close on time.

3.     Get a good real estate professional.

You need a good, reputable and experienced real estate professional with local expertise, in a hot real estate market. The agent should get information about listings before or as soon as they hit the market. Also he/she should know how to make your offer stand out. An experienced real estate professional will be very adept to this type of market.

4.     Once you find the house you want, move quickly.

In a hot sellers market, once a new listing is out, don’t wait until the next day to respond to the listing. If you like what you see, write up and offer immediately. You will be surprised how many offers a sought after property can get in a matter of hours!

5.     Make a strong offer.

Your offer should be competitive and clean, as in a hot seller’s market, you may not get a chance to negotiate. If your offer is much lower, the seller may refuse to negotiate with you when you increase your offer. Remove as many contingencies as possible, but do not waive those that are important and in your best interest.

6.     Try and work with the seller.

If you are an easy customer, sometimes you don’t have to pay the highest price to win the deal. Options like giving the seller an option to rent for a few months while he/she searches for a new one, may give you the edge. In a bidding war, paying the seller’s closing fees (not the agent’s commission) may satisfy the seller more than than increasing your bid.

Dealing with a seller in a seller’s market requires tact and experience. If you are looking to buy a home, contact us and one of our experienced real estate professionals will help you find your dream home.

 

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The Hidden Costs Of Buying A Home That Every Homebuyer Should Know About

Purchasing a home is a major purchase and what many home buyers, especially new ones, don’t realize is that there are a number of hidden costs associated with the home purchase. So when you look at purchasing a home, you must make sure that you have a good understanding of how much money you will need to spend.

Here is a list of costs that are typically associated with buying a home:

Appraisal fee: Required by the lender to ensure that you not trying to borrow more than you should be relative to the property’s actual value. Sometimes your lender may cover this cost.

Property purchase tax: This is land transfer tax that is calculated as a percentage of the purchase price. The formula varies for province to province and from city to city. If you are a first time buyer you receive some exemption.

Adjustment costs: These are prepaid costs paid by the vendor that are to be paid back when the buyer takes possession of the home. Typical costs are property taxes, utility bills such as gas, hydro and water.

Home inspection fees: A home inspection reports on the condition of the home – the electrical, plumbing, roofing and insulation aspects, and includes the condition of the structural health of the home.

Property survey: some lenders require a property survey to verify the property’s boundaries, measurements, and structures and identify any easements, rights of way or encroachments on your property.

Interest adjustment: This is the calculation of interest from the closing date to the date of the first mortgage payment is calculated. For instance, if you close your deal on March 10th, the interest adjustment date would be from March 10th to April 1st, the day when your first full mortgage payment is due.

Hook-up fees: Fees charged by utility companies and telephone companies to create an account and initiate the service.

Strata or condo fees: If you are buying a condominium or townhouse you may be charged a monthly fee to cover the costs of security, lighting and common area maintenance.

Legal fees: There are a number of legal documents that can only be processed by a lawyer or notary public. On top of these fees, you will be charged on disbursement costs such as photocopies, telephones, mail and other costs of doing business.

New locks: It is usually advisable to change the locks of your new home once you have moved in. The previous owners may have given the keys to a number of individuals, some who many not be aware of the sale.

Insurance: Most lenders require homeowners to buy home, fire and liability insurance, effective on the completion date of the sale.

Mortgage insurance: If your down payment is less than 20% of your total mortgage, you will be required by the lender to get mortgage insurance, which protects the lender if you default on paying the outstanding loan.

It is important that you factor in these costs when contemplating a home purchase. You should also keep funds available for any repairs or renovations that may be required on possession.

If you are looking to buy a home, we have over 45 homes available and over 28 years of experience in the real estate business. Contact us via email or call us at 604 913 1000 or 604 695 1000.

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The Top 5 Questions To Ask In An Open House

Visiting open houses is very important and you should start doing this when you are at the beginning of your home buying cycle. By going to visit open houses, you will get a better idea of where you want to buy, what amenities you want, what neighbourhood you want to be in and also what is the ideal type of home for you.

At this time of the year, open houses are more frequent, happening every weekend, almost everywhere.

Here are 5 important questions you should ask at every open house, regardless of the stage of the home-buying process you are in:

Why are you moving?

Usually families are upgrading or downsizing. If the owners are relocating, that is good news for you. When a seller is relocating, they are in a time crunch and are generally more flexible when selling.

If there are maintenance issues, then you should be weary and ask searching questions.

When was the last time the home had any renovations or upgrades?

If work was done recently, this is good news, as it saves you the time, effort and money. If the water heater, ac or heater have not been updated for a long period of time, you can expect bills in the near future.

If renovations have been done, ask about whether the appropriate permissions have been obtained. If not, then you may face problems with the local municipality in the years to come.

How long has the house been on the market?

This is a very important question as it tells you a lot about the home or the owners. If the home has been on the market for over 60 days, this should be a red flag that there could be something wrong:

-Is the house overpriced for the neighbourhood?

-Has the seller had multiple offers but is very firm on the asking price?

-Are there material defects that are not apparent?

What are the added expenses that go into owning this home? 

Apart from the mortgage expenses you should be aware of other expenses that go into owning the home. Questions that need an answer are:

-What are the yearly taxes?

-What are the monthly electric and heating bills?

-If it is condo, what are the monthly service charges?

How long have the owners lived in the house? 

If the owner has lived in the home for a short period of time, there are 3 possibilities:

-The owner has bought the home, renovated and is flipping for a higher price.

-The owner purchased the house, but after a couple of years is unsatisfied with the purchase.

- The move is job related.

If the owner has lived for a long time, it is more than likely that he/she has taken great care of the home.

Finding the right home is not an easy process. You need the guidance of an experienced real estate professional. We have been in the real estate business for over 28 years. For any home buying or home selling related enquiries, please contact us or call us on 604 913 1000/604 695 1000.

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Six Great Spring Cleaning Tips to Keep Things Cleaner Longer

Home cleaning is not easy, especially for working professionals. Here are a few useful and valuable tips that make it easier to fight those dirty jobs faster and less often:

  1. Keep those shower doors crystal clear. Eliminate that annoying soap scum by coating your shower doors with a rain repellent product made for car windshields. When applied to glass, these products create an invisible barrier that causes oils, water and other debris to roll off.
  2. Protect your furniture and carpet from stains. Protective sprays and sealants guard your furniture and carpets against spills, stains and some sprays guard against fading and mildew. Products like Ultra-Guard and Scotchgard cause the liquid spill to bead on the surface instead of being absorbed into the fabric or carpet, allowing for an easier clean.
  3. Do quick and frequent touch ups to keep things tidy. When you do small cleaning projects on a frequent basis, you prevent dirt, grime and grease from building up. This also prevents smudges from staining, dust from accumulating and this even combats allergens. Keeping items in closed cabinets and drawers prevents dust from getting in and circulating.
  4. Use a cleaner sweeper. Brooms hold on to dirt, and when you use a broom to sweep you are in effect pushing dirt around.
  5. Seal your stone countertops. Countertops made of natural stone such as marble and granite are porous. If they are not sealed, then spills on them get absorbed and eventually a layer of hard to remove stain forms. By using a countertop sealer, potential stains get repelled as the liquid beads on top and doesn’t get absorbed.
  6. Combat dust You can defy dust by adjusting your home’s humidity level. Keep the level between 40-50%. Low humidity causes static electricity that attracts dust. High humidity is ideal for dust mites and other allergens.

Thinking of selling or buying a home? Now could not be a better time to do this. Contact us or call us on 604 913 1000. 

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