Quarter 4 Real Estate Market Updated for the Greater Vancouver

Data collected by the Real Estate Board of Greater Vancouver appears to indicate that we are in the midst of a balanced market as we settle into the holiday season. 

“We’ve been watching the number of active listings in our market increase over the past few months, which is giving buyers more to choose from than they’ve been used to seeing over the past few years,” Andrew Lis, REBGV’s director of economics and data analytics said.

“When paired with the seasonal slow down in sales we typically see this time of year, this increase in supply is creating balanced conditions across Metro Vancouver’s housing market.”

Below is an overview of comparing Total New Listings in 2022 vs 2023, and Total Sales in 2022 vs 2023:

Total Listings

Total Sales

Since the September 6 meeting, the Bank of Canada (BoC) has continued to pause their key interest rates at 5%. The December 6 meeting announcement mentioned that slowing economic growth and easing inflationary pressures as the reasons for holding the rate flat.  Economists polled by Reuters believe that the BoC will begin to decrease rates in the 2nd quarter of 2024. In other interest rate news, the Bond yields, which influences fixed rates, continue to drop and should be significantly lower by springtime. If you have any questions regarding any of this so far, please reach out!

Some headlines to share:

• $115m Funding Deal Could Help Build 40,000 Homes in Vancouver Over Decade
• Canada Looking to Stabilize Immigration Levels at 500k Per Year in 2026
• Housing Shortages in Canada: Updating How Much Housing We Need by 2030

During the last quarter, there were a lot of headlines that caught my attention regarding our housing crisis. On one hand, we can clearly see the federal government trying to do things to fix the supply issue that is plaguing our country. On the other, they act in contradiction to solving problems by accelerating the demand issues that we have faced for a couple of decades. CMHC published a report that stated that we need 3.5 million new homes on top of the current levels just to get back to affordability. In other words, there is no end in sight and housing will continue to be in high demand. As the iconic author Mark Twain once said:

“Buy Land. They’re not making it anymore”

In other news, the Federal Government has removed the GST for developers to build new rental housing. This is a significant incentive for builders as previously, their credit was capped at 36% rebate of the GST paid. Giving this relief will encourage more purpose-built rental housing to hopefully increase the housing supply and give some stability to renters in BC.

The BC Government announced on October 17 that they are changing the definition of short term rental to 90 days minimum term. The hope is that this change will return some short term rental properties to the long term rental market to combat the housing shortage. I am willing to bet that many of these short-term rental properties will not be returned to the long-term rental market and instead will be sold off to homeowners who will end up living in these homes.

If you or someone you know have plans to buy or sell this year or soon, our advice is to get in touch as soon as possible so that we can help you formulate a plan. The more time you have for preparation, the more enjoyment you will get out of your home transition process!

Have a question? Let us know and we will be happy to help!

2023 Quarter 3 Real Estate Market Updated for the Greater Vancouver 

Data collected by the Real Estate Board of Greater Vancouver appears to indicate that we are in a balanced market after an up and down market throughout the spring and summer. Andrew Lis, REBGV Director of Economy and Data Analytics, remarks that “as fall approaches, sales have caught up with the price gains, but both metrics are now slowing to a pace that is more in-line with historical seasonal patterns, and with what one might expect given that borrowing costs are where they are”.

Below is an overview of comparing Total Listings in 2022 vs 2023, and Total Sales in 2022 vs 2023:

After a surprise increase of the rates back in June this year, the Bank of Canada (BoC) raised their key interest rates for a consecutive period on July 12 by 25-bps before coming to the decision to pause it at their latest meeting which took place on September 6. The decision came after the bank concluded that higher inflation numbers were larger driven by higher cost of borrowing. This is a welcome relief for any variable rate borrowers, but do not be surprised if another hike comes before the end of the year. The mortgage brokers I have spoken to are still recommending short term fixed rates as they are still lower than variable and it is widely expected that rates will begin to drop over the next 2 years. If you have any questions regarding any of this so far, please reach out!

Some headlines to share:

• Metro Vancouver renters could take the hit as condo investments become less viable
• Tenants feel ‘real fear’ as rent for one-bedroom in Vancouver exceeds $3k
• Rent in Vancouver is 17% more expensive on average than in Toronto

During the last quarter, there were a lot of headlines that caught my attention regarding renters. I had always had the opinion that renting should not be a long-term option and that everyone needs to own a home somewhere. If you must rent because of your circumstances, then so be it! But hedge this expense by having your own rental investment property and let someone pay your mortgage while you pay rent somewhere else. I was probably sensitive to this topic during the last three months because of a couple of seniors that I had to evict in order to accommodate a sale for our seller client back in March. They were both in their late 70s with various health issues and moving was not going to be easy for them. To make matters worse, nobody wanted to take them on as tenants because their only source of income was their pension which is criminally low, and whatever odd jobs, they can take to make ends meet. They both worked at decent jobs during their prime but were lifelong renters. They said that renting was great because they got to live where they wanted to without any commitments. They also got to live where they couldn’t afford to buy because homes in the area were typically much more expensive than rent. Well, sometimes your heart leads you to where you should not be. The time came for them to vacate the home and they had yet to find somewhere to live so they packed their belongings into a storage facility and lived in their car. It took 3 months before they found a kind homeowner with some compassion for them to accept them as their tenants. They phoned me to tell me the news and they were both in tears. This hardship should not have happened if someone had told them the advice that I tell every renter I meet. That advice is this. While a mortgage rate of 7% may seem high, you retain most of the equity and all the appreciation. When you pay rent, you lose 100% of what you pay and have no security or anyone to care if you must live in your car for 3 months when you are asked to leave. Your priority in life needs to be to secure a home. Please pass this advice on to anyone who could benefit from knowing.

In other news, BCFSA has implemented a new form for multiple offers. The purpose was to hold the realtor and the homeowner accountable during the process of negotiations and to notify home buyers and their representation of how many offers were received. This all sounded great until we realize that the process is backwards. You see, the disclosure doesn’t happen until the end of the negotiations when the homeowner has already chosen an offer. It would have made more sense if this was a disclosure made to all home buyers prior to the start of negotiations and that no other offers can be submitted after this time. We have submitted this feedback and hope a future amendment will include this change.

To conclude this quarter’s update, I will leave you with some real estate advice from the bible. (I swear it was real estate advice):

“Ask and you will receive. Seek and you will find; Knock, and it be opened to you.” – Matthew 7:7

If you or someone you know have plans to buy or sell this year or soon, our advice is to get in touch as soon as possible so that we can help you formulate a plan. The more time you have for preparation, the more enjoyment you will get out of your home transition process!

Have a question? Let us know and we will be happy to help!

2023 Quarter 2 Real Estate Market Update for the Greater Vancouver: ENTERING THE HOT SUMMER...

(Published June 7, 2023)

According to data collected by the Real Estate Board of Greater Vancouver, we are firmly in a seller’s market across the board. This means that there are more buyers than there are homes for sale. Low inventory continues to plague our market as the influx of people moving to the Best Coast, is outpacing the supply of new homes to hit the market

The Bank of Canada (BoC) raised their key interest rates at their latest meeting on June 7, 2023 by 25-bps  after keeping the rate steady for the past 2 months. The news came as expected by most economists after the inflation reports in April showed a surprise increase driven by rising rents and mortgage costs. In the short term, a rise in the BoC rates means an increase to the variable rates. The mortgage brokers I have spoken to are still recommending short term fixed rates to hedge against high borrowing costs. If you have any questions about this, please reach out!

 Some headlines to share 

• Vancouver area Home Sales in April 2023 down 16% from April 2022. 
• Vancouver Home Sales up 15% year over year in May 

For those keeping track, that is a 31% swing in one month which is how you can always lie with statistics! 

In other news, the government expanded on their 55+ bylaws restrictions with additional exemptions that will allow residents to stay in the building if they have future children, having a younger spouse or partner move in, live in caretakers, or adult children moving back in with their parents. This news is welcome because earlier in the year, the government announced an end to rental restrictions and 19+ age restrictions in strata’s which resulted in many strata’s making a move to adopt a 55+ age restriction bylaw instead. 

To conclude this quarter’s update, I will leave you with some words of wisdom from the late Indian Professor Hazrat Inayat Khan:

“Some people look for beautiful places, Others make a place beautiful!”

 If you or someone you know have plans to buy or sell this year or soon, our advice is to get in touch as soon as possible so that we can help you formulate a plan. The more time you have for preparation, the more enjoyment you will get out of your home transition process! 

Have a question? Let us know and we will be happy to help!

2023 Quarter 1 Real Estate Market Update for the Greater Vancouver...

The market has officially tilted into a BUYER’S MARKET, according to data collected by the Real Estate Board of Greater Vancouver. This means that there are now more homes for sale than there are buyers for these homes. It is worth noting that December and January have traditionally been slow months for sales activity. We have begun to see an uptick in sales since the end of January and into February. We will continue to monitor the situation to see if this is the beginning of a new trend or if it is just another blip on the radar.

The Bank of Canada (BoC) raised their key interest rates twice in the quarter including a 50-bps increase in December and a 25-bps increase in January. The closing statements from the January meeting leads us to believe that the BoC will pause rates for the time being if certain economic conditions are met. If this holds true, Buyer and Sellers can expect a level of certainty, which will drive the demand for homes at least in the short term.

In other news, the cooling off period came into effect on January of 2023. This means home buyers will be given 3 business days to rescind their offer, similar to the 7-day recission period for presale properties. The only catch: there is a fee that the buyer will have to pay to exercise this option to be able to rescind the offer. Having had to navigate this policy for 2 months in a Buyer’s market, we can conclude that not much has changed except for more signatures and paperwork if your offer comes with conditions. We will see how this policy holds up when we get back into a Seller’s market when we have a higher chance of seeing subject free offers.

If you or someone you know have plans to buy or sell this year or soon, our advice is to get in touch as soon as possible so that we can help you formulate a plan. The more time you have for preparation, the more enjoyment you will get out of your home transition process!

Have a question? Let us know and we will be happy to help! To conclude this quarter’s update, I will leave you with some words of wisdom from motivational speaker Jim Rohn:

“If you do not like where you are, move! You are not a tree.”

Quarter 4 Real Estate Market Update for the Greater Vancouver and What to do now...

According to data collected by the Real Estate Board of Greater Vancouver, we are in a BALANCED market, but the sentiment feels like a Buyer’s market. This means that there are an adequate number of buyers and sellers currently in the market.

During the last three months, we have seen home buyers exercise more caution as the cost of living has steadily increased due to higher borrowing costs.

The Bank of Canada (BoC) raised their key interest rates twice in the quarter including a 75-bps increase in September and a 50-bps increase in October. The October increase was lower than many had expected, and I think this tells us that the central bank believes that the worst is behind us. With that said, the inflation numbers are still higher than where the BoC wants it to be and will likely have to continue with a few more rate hikes starting with the meeting on December 7. With unemployment at its lowest levels and the world getting back to normal, I suspect demand will return as soon as the rates start to taper off.

Recently, the BC Financial Services Authority announced details of the cooling off period which will come into effect in January of 2023. This means home buyers will be given 3 business days to rescind their offer, similar to the 7-day recission period for presale properties. The only catch: there is a fee that the buyer will have to pay to exercise this option to be able to rescind the offer. As there are many details associated with this, if you are interested in knowing more, it would be best to give us a call to chat.

The BC government recently proposed some changes to the Strata Property Act to amend the rental and age restriction bylaws. If passed, rental restrictions in strata complexes will be lifted with the exception to any short-term rental clauses and 19+ complexes will be banned. Seniors only buildings will still be allowed. These rules, at first glance, may seem like a positive step to addressing the housing supply crisis but in fact, we may only see a small increase in inventory as these buildings are near 100% owner occupied. It will take a long time for the supply that the government hopes for to show up to the market to relieve the strain that has plagued our city for the last decade.

Our advice to anyone who is thinking of buying a home in the coming months is to consider buying sooner than later. The market is soft right now, meaning you can get yourself a good price.

A good price is very important for your finances, even if the interest rates are a bit higher than you would like.

You see, you can’t change that purchase price once you complete on the property, but if the interest rates drop you are free to re-negotiate your mortgage terms. In this way, a low principal is really a key to riches. I should also point out that when the market heats up, the prices tend to go up very quickly. But when the prices drop, it trickles.

Have a question? Let us know and we will be happy to help! To conclude this quarter’s update, I will leave you with some words of wisdom from a real estate investor and philanthropist:

“The best investment on Earth is Earth” – Louis Glickman

Quarter 3 Real Estate Market Update for the Greater Vancouver and What to do now...

Q3 is a comparison of 2 extremes

Although still technically in a Seller’s Market, according to data from the Real Estate Board of Greater Vancouver, this market feels and acts like a Buyer’s Market. For the period between June-August 2022, we have seen the continued downward trend of supply when comparing year over year data

A concern we have also noticed is that the number of buyers, or sales, has also decreased year over year.

What does this mean? Simply put, the demand from home buyers is simply put on hold and the implications of this data carry with it the risk that a rebound in the market will be far more severe than the harsh conditions we have just exited. The issue with the Vancouver real estate market has always been tied to the supply of homes vs the demand for the homes. We have some major events coming up that will bring a larger spotlight to our city that is very similar to what the 2010 Olympics did. With the upcoming 2026 World Cup and a potential successful bid for the 2030 Olympics, there will be no shortage of people from around the globe who will inevitably look to Vancouver as their destination of choice. In a recent report by the Economist, Vancouver was ranked 5th overall Best Places to Live in the World. The annual CBRE Tech Talent Ranking, which scores cities based on job opportunities in the Tech industry, has Vancouver at number 8. These latest trends are further proof that the demand is only going to continue to build up over the next few years. If the government continue to ignore the real issues, we are only delaying the next inevitable boom.

In other news, to slow inflation, the Bank of Canada raised the policy interest rate two times in the 3rd quarter of 2022. The first increase was 50 basis points, or 0.5% in June, and in July, they surprised everyone by increasing the rate by 100 basis points, or 1%. The consensus advice from most mortgage brokers is to go with a variable rate to take advantage of the savings in the short term. It is expected that rates will ease in 2024. If this happens, you can then lock in for a fixed rate if you cannot handle the roller coaster ride in monthly expenses.

   Lastly, on July 21, 2022, the BC Financial Services Authority, the government institution who overlooks financial transactions in BC announced that they will be implementing the Home Buyer Recission Period (HBRP) AKA the cooling off period on January 1, 2023. Much of the details are still very vague and as per the unofficial government mandate, the indirect consequences are not yet known. What we do know is that:

-       The period for buyers to rescind their offers is 3 days after acceptance date. With or without subjects.

-       There is a fee payable to the Seller (0.25% of the purchase price) as compensation for cancelling a contract (Previously it was the full deposit that would be forfeited, so this is hardly a deterrent to a Buyer to exercise this right)

-       If no deposit is collected, then the fee payable to the seller in the event of a canceled contract will be treated as debt, which will require legal action from the Seller to retrieve it.

-       The wording of the regulation says the HBRP cannot be waived.

It will be more important than ever to work with a real estate team that can help navigate potential problems associated with these new regulations. We at Happy Homes will be sure to stay on top of all the news surrounding these new rules and ensure that we give the right advice so that our clients are protected in all situations.

       Going forward, at least for the next quarter, our advice for home buyers is to buy when the costs match your comfort zone and trust that the Vancouver real estate prices will eventually go back up because of the geographical situation of the location, mild climate, and natural beauty. We live in one of the most beautiful and desirable parts of the world and this cannot be overlooked. If you are looking to sell your home, have a plan on what you will do next. Are you cashing out? Upsizing, downsizing? There is a solution to all these situations and our team can help you organize your thoughts and reach your goals in a comfortable and confident manner.

Have a question, let us know and we will be happy to help! I will leave you with some words of wisdom from a financial guru.

“Since the ‘bottom’ is only declared in retrospect, those who wait for it almost always go away empty-handed.” - Frank K. Martin, A Decade of Delusions