BCREA – BC Housing Market Will Continue To Cool In 2018, But Prices Will Not Soften

In the release of its 2017 Fourth Quarter Housing Forecast, the British Columbia Real Estate Association (BCREA) is showing an expected 8.8% decrease in residential prices across the Province this year, and a further 10.4% decline next year.

The average MLS residential price in BC is forecast to increase 3.1% to $712,300 this year, and a further 4.6% to $745,300 in 2018.

Data released by the BCREA shows that homes sales in 2018 are estimated to dip to 91,700 units, down more than 10,000 from the record set in 2016, but still well ahead of BC’s 10-year sales average.

According to the BCREA chief economist Cameron Muir, the supply of homes is at or near its lowest point in decades, and that the imbalance between supply and demand is what has been largely responsible for the rapidly rising house prices in the past.

The Association says that interest rates are expected to rise next year, and the new mortgage stress tests will reduce household purchasing power and erode housing affordability.

The 5-year qualifying rate is forecast to rise 20 basis points to 5.15% by the 4th quarter of 2018, and the new qualification rules for conventional mortgages will erode purchasing power by up to 20%.

“Given the rapid rise in home prices over the past few years, the effects of these factors will likely be magnified”, Muir says.

To view the full BCREA Housing Forecast, click here.

Buying a home is one of the largest financial transactions you will ever make in your life. So why wouldn’t you trust a professional to do it for you? When you decide to do so, contact us and one of our experienced real estate professionals will help you find your dream home.

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Haven’t Got Your Christmas Lights On? We’ll Show You How To Get Your Home Looking Merry And Bright!

Light up the night this holiday season by adding some sparkle to the outside of your home! Here are some easy tips on how to do it right:

1) Develop an overall plan of what you want your home to look like when it is lit up.

For a clean professional look, keep your color scheme consistent throughout your whole property. Use white strands on trims and green strands on bushes and trees.

There are tons of different options to chose from – just make sure you group the same types and colors together to get the best results.

2) Take the time to measure the areas you want to adorn with lights to give you an idea of how many strands you need. Measure all the straight lines in your design and add them together. Then measure the height of any trees and pillars. Don’t forget to include the distance to the power source.

3) Make sure you chose the right type of lights. There is a difference between LED lights and incandescent lights. You can connect up to 25 strands of LED lights and only connect  3-6 strands with incandescent lights.

White lights are not the same color – LED lights have a slightly bluish tint and incandescent are slightly orange. When you place them side by side, they will look mismatched.

4) Test your lights on the ground before you install them on your house and garden.

5) Once your lights are working, it is time to install. Work from the ground up.

Nowadays, you don’t need nails and duct tape to attach the light strands – use light clips  – they are easy to clip on and remove and are adaptable for every surface.

For trees, if you don’t want to use a ladder, use a hanging pole to place the lights on trees. The pole also allows you to place lights on hard to reach areas.

For bushes use net lights as a sort of blanket to cover the whole area.

On your windows, doors, and railing use the clips to easily and securely place the strands, without much damage to the surface.

Make sure you keep all the lights facing the same way for a uniform appearance. If you are wrapping lights, keep the distance between the strains even and consistent.

6) Keep taking time to step back and look at your progress, making sure that everything is being done according to your initial plan.

7) Once the lights are up, plug them into an outdoor timer to save energy. You can also use light sensors that turn the lights on at dusk and off at dawn.

Make your house into a stop that you and Santa can be proud of!

Traditionally, the holiday season is not a busy time for homebuyers and sellers. However, as a buyer, you may pick up a bargain, and as a seller, there is a buyer out there looking for your home. For a full list of our luxury homes available for sale, please visit our website where we have over 60 amazing homes offered for sale.

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Vancouver Approves New Bylaws To Regulate Short-term Rentals Such As Airbnb.

On November 14, Vancouver City Council voted 7-4 to approve controversial short-term rental regulations. Starting April 1st 2018, owners and renters will only be allowed to rent out their principal residence, for a period of less than 30 days at a time.

Each applicant will have to pay a one-time activation fee of $54, a licensing fee of $49 per year. Secondary homes, secondary suites and laneway homes will be prohibited from the pool, much to the dismay of property owners unable to put up their homes for long-term rentals.

The $49 annual license must be posted on their online listing, or they can face a fine of up to $1000.  Platforms like Airbnb and VRBO will also be required to charge a 3% transaction fee, proceeds of which will go towards administration and enforcement.

“We currently have around 6,000 illegal short-term rentals in the city, we needed a way to regulate them, and I think we have a solution that approves almost 80% of them”, said Vancouver Mayor Gregor Robertson.

According to the Mayor, the vacancy rate is just above zero and the city must do everything it can to free up housing for long-term rentals. The rules are necessary in a time of crisis.

City staff will now go forward with setting up a regulatory framework for council’s formal approval. To ensure compliance, the city will have a dedicated enforcement coordinator and an additional inspector to investigate complaints and audit.

Expect a similar type of regulatory framework to be implemented in municipalities and cities with tight rental markets throughout the province.

Read our September blog:  Airbnb – Expect A Wide Range Of Regulations Coming Soon.

If you are planning to purchase a new home, or sell your existing home, get in touch with us.  We have been in the real estate business for over 27 years.  Call us on 604 913 1000/ 604 695 1000, contact us or follow us on Facebook.

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All You Need To Know About The Latest Rules To Strengthen Consumer Protection In The BC Real Estate Market

In a move to improve consumer protection in BC’s real estate industry, starting March 15, 2018, BC real estate professionals will no longer be able to practice dual agency: a single agent will not be allowed to act on behalf of both the buyer and seller in the same deal.

According to Michael Noseworthy, BC’s Superintendent of real estate, “Ending dual agency removes the potential for conflict and serious problems. We want to create transparency for both consumers and [agents] to ensure everyone understands in whose interest [agents] must be working.”

It should be noted that the BC Real Estate Association opposes ending dual agency, insisting that consumers will have less choice.

The dual agency ban is part of the first major rules to be introduced by the newly created Office Of the Superintendent of Real Estate. This office was created last year ending self-regulation by BC’s real estate industry, which came about as a result of public concern over the Real Estate Council of BC’s oversight of misconduct, in a red-hot housing market.

Rule making powers were transferred by the government from the Real Estate Council to the office of the government appointed Superintendent.

An exception to the ban will be in areas of the province where “ a particular property is so remote as to make finding another agent extremely difficult.”

BC is the first province in Canada to prohibit this practice.

Another noteworthy change will be that real estate professionals will be required to disclose information on how they split commissions earned on the sale of the property. They will also have to make sure consumers know their rights and warn them of risks involved in the property transaction.

As a client, you become part of our family. We look to you for your input and suggestions, in particular, the personal stories of your home that we can share anecdotally with prospective buyers. Please send us your stories, feedback, suggestions or input.

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REGBV Market Update For October 2017 – We Continued To Be In Seller Market Territory.

Once again the majority of the sales for October were concentrated in the townhouse and condominium market.  Last month’s sales were 15% above the 10 year October Sales average.

According to the REGBC president, “Conditions (in October) continue to vary significantly based on property type. The detached home market is well supplied with homes for sale, which is relieving pressure on prices,” but she also added,” It remains a different story in the townhouse and apartment markets. Buyers of these properties continue to have limited supply to choose from and are seeing upward pressure on prices.”

Home Sales

The number of residential homes sales totaled 3,022 in October 2017, an increase of 789 homes when compared to October 2016, and an increase of 201 homes when compared to September 2017.

Majority of the sales were around the condo and townhouse market.

Home Listings

The supply of homes continues to vary by property type. Buyers for townhouses and condos have a limited supply to choose from causing upward pressure in prices, whereas there is an ample supply of detached homes available.

In October, the total number of listings on the MLS system in Metro Vancouver was 9,137. This was less than October 2016 – 9,143, and less than September 2017 – 9,466.

Sales-to-active-listings ratio

This ratio gives a better understanding of the balance between supply and demand. For October 2017, the ratio was 33.1%.  By property type, the ratio was 16.8% for detached homes, 44.8% for townhomes and 66% for condos. The ratios are similar to those for September 2017.

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

Home prices

In October the MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver stood at $1,042,300. This was 12.4% increase over October 2016 and 0.5% increase over September 2017.

Get the full report here.

Looking to buy or sell a home? Use our decades of experience to list your property or buy your dream home. Contact us and one of our experienced real estate professionals will assist you.

 

 

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6 Critical Reasons Why You Must Regularly Tune Up Your Furnace and Heating System

Summer is long over. The weather is cooling and Halloween candy is everywhere…not to mention the sparkling of holiday glitz popping up across the city. Before the cold weather really settles in, there are a number of preparatory measures you have to take in your home, and one of the most important is taking care of your furnace and heating system.

Now is the time to get your heating system inspected, cleaned and tuned. This is why:

1.     Prevent Carbon monoxide poisoning

If your furnace uses fossil fuels such as propane, oil or natural gas there is a risk of carbon monoxide poisoning if a minute crack forms. These can be discovered during routine maintenance, and are thus preventable.

2.     Reduce chances of system failure

During the winter months, your furnace will be working continuously to keep your home warm. With continuous use, the possibility of something going wrong increases. The worst thing that can happen to a household is to have the furnace break down during the dead of winter.

3.     Cost savings

Regular maintenance will ensure your system is working efficiently. An efficient unit uses less energy than one that is poorly maintained.  The saving in maintenance and/or replacement will save you money in your heating expense in the long run.

If your ducts are not properly sealed and insulated, they can be huge energy wasters.

4.     Reduction in allergies

If you have had some construction done over the summer, it is a good idea to get your ducts cleaned. This will help eliminate dust, pollen and other debris that may have accumulated – a very important thing to do if you are prone to allergies.

5.     Ensure adequate airflow throughout the system

When you tune up your heating system, you will get an even flow of heat throughout the home. If there are areas of insignificant airflow, the unit will have to work harder to maintain the desired temperature. This may cause a system breakdown and/or greater energy usage.

6.     Your unit will last longer

As with any machinery, regular maintenance and care ensure longevity (there may be a time when the unit needs to be replaced due to obsolescence). Poorly maintained systems run inefficiently and will break down more often.  Emergency repairs can be expensive.

If you have any questions about this blog or any home-related issues, contact and one of our real estate professionals will be glad to help.

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Three Principal Reasons Why The Condo Market Is So Hot in Vancouver

The market for detached homes may have cooled when compared to last year, but on the other hand, Vancouver’s condominium market has seen double-digit percentage increases from last year.

What is responsible for this year’s super hot condo market? A perfect storm comprising of three competing sectors:

First Time Buyers

Normally, a condo is what the typical homebuyer would invest in when entering the real estate market for the first time. During the past few years, there has been a lot of dissent among first-time homebuyers complaining that housing was becoming more and more unaffordable. Enter the provincial government with their BC Home Owner Mortgage and Equity Participation Program aimed at helping first-time homebuyers with their down payment.

Instead of alleviating the problem of rising prices, the program is partly responsible for exacerbating it: with more potential buyers entering the market, there is upward pressure on prices, as supply cannot keep up with demand.

It is not surprising that first-time homebuyers are feeling that the condo market is now passing them by. Currently, each listing gets at least 4-5 offers and the final price is usually tens of thousands over asking.

Property Flippers

Speculators have also helped push up the average price of a Vancouver condo.

Research finds that roughly 5% of the condos sold in 2017 were owned for less than 1 year and nearly 11% sold within 2 years.

In any market where there is a potential for short-term profit, there are investors who find this a very hard opportunity to pass by – simple market economics.

However, not everyone who bought intended to flip. Many recent buyers have seen the value of their condo shoot up within a short period of time.

Finding the short-term windfall too hard to pass by, they have subsequently sold and made huge profits equivalent to a year’s wages, in some cases.

Downsizers

In the past few years, there have been defectors from the detached market who have taken advantage of the property boom and sold their homes for huge gains. Many are boomers who have moved out of the area to other parts of the province looking forward to a comfortable retirement.

And there are those who are close to retirement but have sold early in order not to miss on this housing bonanza. Armed with cash and patience they have chosen to downsize into smaller and more manageable homes – condos  – putting even more pressure on prices and availability.

These three competing forces have forced the condo market to explode and there are no foreseeable signs that this segment will cool down.

If you are looking to purchase a condo in this super hot condo market, we have a number of condos available in our listings. Go to the VLIST search and browse through the listings.

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A Year After the Foreign Home Buyers Tax – It’s a Great Time To Buy A Luxury Home.

It’s been just over 1 year since the Provincial government introduced the 15% foreign homebuyers tax to cool the then ultra hot Vancouver real estate market.

Since the implementation of the tax in August 2016, Metro Vancouver sales have dropped 44%, and the 3 most popular markets for foreign buyers – West Vancouver, Richmond and the West Side of Vancouver, have still to recover to their 2016 levels.

West Vancouver

According to recent Real Estate Board of Vancouver data, house prices in West Vancouver have actually dropped by roughly 6% when compared to August of last year. This is the biggest drop in the Metro Vancouver area.  However, according to a number of real estate professionals, the plunge in prices is even greater in the higher-end market.

Richmond

Prior to the foreign homebuyers tax last year, foreign buyers accounted for roughly 10% of the housing sales in Richmond. The August benchmark price was down around 1% when compared to the same time last year. To give you an idea of the effectiveness of the tax, for the 12 months leading to before the tax was implemented, prices of detached homes rose by 43%!

Vancouver – Westside

Detached housing sales year to date are down 42% from the same period in 2016, and as of August 2017, the benchmark house price dropped by an average of $135,000 to $3.5 million.

For those contemplating the purchase of a detached home in any of the above-mentioned areas, this temporary downturn represents a solid buying opportunity. We are currently in a buyers’ market in the high-end detached home market, and sellers are learning to adjust their prices to accommodate buyers.

If you are looking to buy a luxury home, contact us by email, or call us at either our Downtown office on 604 695 1000 or our West Vancouver office on 604 913 1000. We are Vancouver’s premier luxury home specialists.

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Bank Of Canada’s Overnight Rate Hiked For Second Time In Two Months – What Does This Mean To You As A Homeowner?

Luxury West Vancouver Real estateOn September 6, The Bank Of Canada (BOC) announced that it was raising the overnight lending rate another 25 basis points to 1%. This followed the recent rate hike in July when rates increased from 0.50% to 0.75%.

The reasoning for the rate hike can be attributed to the fact that economic growth in Canada has exceeded analyst’s expectations: GDP growth expanded more quickly than expected, consumer spending has been robust due to strong employment and income growth, and business investment and exports have been increasing.

Whenever there is an interest rate hike by the BOC, other banks invariably follow suit and raise their rates.  As a result, everyone is affected: homeowners with mortgages, home equity lines of credit card holders, car loans etc.

Effect on Mortgages

Fixed – rate mortgages will have no change in the interest rate. The change will occur on renewal, so expect a higher interest cost and a higher monthly mortgage payment.

Variable – rate mortgages will move up or down with the interest rate. When a rate hike happens, your variable mortgage rate and payment will increase. You can switch to a fixed rate to get peace of mind, but the switch is not cheap. Consult your mortgage broker to get more information.

Prospective homebuyers can count on higher current mortgage rates, as generally speaking, an increase in the lending rate puts pressure on mortgage rates to rise. This can force some first-time homebuyers off the market.

Effect on Home equity lines of credit

This type of line of credit, commonly known as a HELOC, has become popular as home values have increased over the years, resulting in more equity for the homeowner. According to the Federal Financial Consumer Agency of Canada, there are about 3 million HELOC accounts in Canada.

HELOCs have been used to finance purchases at an attractive rate of interest that would otherwise not be possible, and in many cases, borrowers can maintain the account by just paying the interest.

Rising rates will definitely impact the interest rate on the HELOC as most of them have variable interest rates. So expect an increase in the monthly payment to take account for the rise in the interest rate.

Despite the increase in the interest rates, we are experiencing historically low interest rates, when compared to rates in the 1980’s.  With higher interest rates it is advisable not increase your level of debt and if you have the capacity to pay down your debit – do it.

Whether you are listing a condo or a luxury home, it does not make a difference to us. Our experienced real estate professionals are available to assist you in making the transaction as stress free as possible. Contact us by email or call us on 604 913 1000 or 604 695 1000.

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REBBGV Market Update For August 2017 – Condo and Townhouse Sales Soar, While The Detached Market Continues To Cool

The August 2017 stats released by the Real Estate Board Of Greater Vancouver (REBGV) show a month that has turned out to be much busier than anticipated, thanks to continued demand for relatively affordable housing options.

Jill Oudill, REBGV President released the following statement with regards to the August stats: ”First  time homebuyers have led a surge this summer in demand in our condominium and townhome markets. Homes priced between $350,000 and $750,000 have been subject to intense competition and multiple offers across the region.”

So while the condo and townhouse market is soaring, the detached home market  is seeing a continuation of the trend that has developed over the past few months– slow sales and stalled price growth.

Home Sales

The number of registered home sales in August totaled 3,043. This is a 22.3% increase from the 2,489 sales in August last year and a 2.8% increase from the previous month’s 2,960 sales.

Home Listings

The number of newly listed homes for sale on the Multiple Listing Service (MLS) in Metro Vancouver is 4,245, a 1.1% decrease from August 2016 and a 19.2% decrease from the previous month (July) when 5,256 new homes were listed.

The total number of properties listed on the MLS is 8,807, representing a 3.5% increase when compared to August 2016 and a 4.2% decrease when compared to July 2017.

Sales-to-active-listings ratio

This ratio gives a good understanding of the supply and demand forces in the market. For all property types the ratio is 34.6% for August.

When classified by property type, the ratio breaks down thus: 16.3% for detached homes, 44.8% for townhomes, and 76.3% for condominiums.

To understand the importance of this ratio, there is downward pressure on prices when the ratio is around or below 12% for a sustained period, and when it is above 20% for a sustained period, there is upward pressure on prices.

Home Prices

The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,029,700. This is a 9.4% increase from August last year and a 0.2% increase from the previous month.

The increase in market activity can more or less be attributable to heightened activity in the condo and townhome property types. Of all sales, condo sales have topped the leaderboard in August.

Get the full report here.

Our team of real estate sales professionals is squarely focused on looking after their client’s best interests. They are trained and highly experienced in negotiating on behalf of their clients. To contact a Virani sales professional, call on 604 913 1000/ 604 695 1000 or email.

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