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Fall Market Update


A Tale of Two Markets

As we head into the fall, it is a good to review the trends that have developed in our real estate market over the past 6 months.

Throughout Vancouver we have seen two distinct markets emerge during the past spring and summer. The attached market (condos, townhouse, and half duplexes) has seen significant year over year price increases, less listings, and more sales.  The condo market is very much a sellers market right now, with limited supply and a high sales-to-listing ratio. At the same time, the detached market has become a more balanced market with more listings, less sales and prices holding steady. Buyers are currently in the drivers seat when shopping for a detached home - with a large selection to choose from in most neighbourhoods and at most price points.
 
After a tepid fall and early winter where buyers waited on the sidelines to see what the fallout from the Foreign Buyers Property Tax surcharge would be, the market came back to life in March. Today's condo prices are up by about 20% on the Eastside and 13% on the Westside from where they were a year ago, with all of that gain occurring in the last 6 months. Much of the demand has been in the $400,000 to $900,000 range, but there is also significant demand for larger and more luxurious units, particularly those with views, significant outdoor space, or in desirable neighbourhoods.  The condo market has been fuelled by first time buyers, young families up-sizing, and boomers down-sizing. Factor in increasingly unaffordable detached homes - anything liveable will start at close to $3M on the Westside and close to $2M on the Eastside – and it’s easy to see why the attached market is so hot.
 
Change may be in the wind. We’ve seen mortgage rates start to climb on the heels of the Bank of Canada’s recent rate increases which will start to impact affordability for buyers at the limit of their budget. Further mortgage qualification tightening will also have an effect on some buyers’ ability to secure the financing they would like.
 
Our new BC NDP/Green government campaigned on increasing housing affordability and imposing new restrictions on foreign buyers and speculators – with the new legislative session about to begin, we will find out what measures the province will take to address both supply and demand. 
 
The federal government also announced new reporting requirements this year for principal residence capital gains exemptions, this could damper some of the more freewheeling and speculative players in the market.  Keep in mind that the Canadian dollar has also strengthened considerably over the past 6 months, making purchases with foreign capital more expensive.
 
Locally, the City of Vancouver’s empty home tax will take effect in January. This, coupled with upcoming restrictions on short-term rentals, should increase the rental supply as well as discourage “land banking” where speculators buy properties and leave them empty.
 
Nationally all eyes are on the Ontario, which on the heels of a number of measures designed to cool the market has seen price and sales fall significantly since new legislation was introduced in April.  Whether this is a temporary lull as we saw locally in the last year, or the beginning of a more sustained market correction remains to be seen.
 
Nonetheless, with the strong economy in the Lower Mainland, continued net immigration into the province and our desirable climate and lifestyle, I would be reluctant to bet against the Vancouver market.  I predict that in the next year we’ll continue to see a sellers' market  with more moderate increases in prices for condos and other attached homes, coupled with a balanced or even a buyers' market emerging for detached homes, especially at the mid to upper end of the market.
 
As in any market, there are opportunities, for both buyers and sellers.
 
For sellers, it is always important to be priced competitively, and to have a professional high quality marketing plan to ensure that your property is a prospective buyer’s first choice. Having some flexibility in final terms and dates can be the key to a successful sale.  As always, all real estate is local – the value of your property is specific to your neighbourhood, block, and improvements, and to the number of other similar properties competing for buyers’ attention. Call me for an up to date market evaluation and to find out how our proven marketing system can get you top dollar, quicker.
 
For buyers, having the very latest sales information to determine comparative value, and the ability to receive listings as soon as they are posted on the MLS system is key to getting the quality home you want. Pre-qualification for financing and the ability to fast track due diligence will make your offer more attractive. I’ll work with you to make sure you see the latest listings for properties that match your needs and budget.  Once you decide on a place, I’ll guide you through the process and work with you to craft an offer that gives you the opportunity to secure it on your terms.
 
Give me a call to get started; I’d be pleased to help!
 
My best for a great fall!

 



Recently Sold Listing 967 W 8TH AVENUE, Vancouver, BC


R2149814 - 967 W 8TH AVENUE, Vancouver, BC, CANADAI have just recently sold this listing at 967 W 8TH AVENUE, Vancouver.

Recently Sold Listing Ph2d - 2988 Alder Street, Vancouver, BC


R2142862 - Ph2d - 2988 Alder Street, Vancouver, BC, CANADAI have just recently sold this listing at Ph2d - 2988 Alder Street, Vancouver.

Recently Sold Listing 25 - 2156 W12th Ave, Vancouver, BC


V1113783 - 25 - 2156 W12th Ave, Vancouver, BC, CANADAI have just recently sold this listing at 25 - 2156 W12th Ave, Vancouver.

Recently Sold Listing 1802 - 667 Howe Street, Vancouver, BC


R2073912 - 1802 - 667 Howe Street, Vancouver, BC, CANADAI have just recently sold this listing at 1802 - 667 Howe Street, Vancouver.

New Listing Ph2d - 2988 Alder Street, Vancouver, BC


R2142862 - Ph2d - 2988 Alder Street, Vancouver, BC, CANADAView my new listing for sale SOLD at Ph2d - 2988 Alder Street, Vancouver and currently listed at $1,998,000.SOLD

SWEEPING VIEWS of the WATER, CITY & MOUNTAINS from EVERY ROOM in this SPACIOUS 3 BEDROOM & SOLARIUM PENTHOUSE perched in the northwest corner of Shaughnessy Gate. Nicely updated: hardwood floors, custom millwork, Italian Berloni cabinetry, chef's kitchen with a Miele/Sub Zero appliance package, heated marble tile floors in the kitchen, bath & solarium, custom blinds & California shutters, air conditioning, etc, etc. Plenty of room here for your house-sized furniture and a king bedroom set. Pro-active strata, amenities include gardens & a tennis court. Quiet & serene, yet walking distance to the shops of South Granville and everything the Broadway corridor offers, this roomy condo is at the centre of it all - great value in a great location.

What’s next for our market? Year End Report and 2017 Outlook


To say that 2016 was an eventful year for our Greater Vancouver real estate market would be an understatement. The first half of the year saw double-digit price increases for all housing types, fueled by higher local and foreign demand coupled with an ongoing low supply of listings. By mid-spring, the big story was the jump in attached strata prices. After years of lagging behind the detached market, the condo market caught fire as first-time and move-up buyers competed with downsizers and investors for a limited supply of quality listings. By early spring, prices for condos in Vancouver were up 30% year over year, while detached homes were up approx. 35%.

This was in spite of changes to the BC Property Transfer Tax (PTT) in the February budget that created a third tier - with a 1% surcharge on the balance of a property’s purchase price above $2 million.  And regardless of warnings issued by both the Bank of Canada and the Federal Finance Minister that the Vancouver market was overheated.

In early summer, just as sales were slowing and the market finally seemed to be leveling off, the provincial government announced a surprise 15% surcharge on the PTT for non-residents, effective just two weeks later on August 2nd.  The market changed overnight - with sales dropping off in August and continuing to languish throughout the fall amid uncertainty about future value and appropriate pricing.  

In October, the Federal Finance Minister announced onerous new stress-testing for insured mortgages, requiring borrowers to qualify at a much higher “published” mortgage rate. This has made it more difficult for first-time buyers and millennials to get into the market and curbed demand at the lower end.

In December, with a provincial election looming in the spring, the BC Liberals announced a 5 year interest free loan for up to 5% of the purchase price for first-time buyers to mixed reviews. 

2016 also saw the imposition of a vacant home property tax surcharge by the City of Vancouver, legislative changes affecting the ability of buyers to assign contracts, and a complete restructuring of the organization responsible for overseeing the industry. And, of course, the surprising results of the US election - resulting in renewed interest in our market from disaffected Americans as well as upward pressure on US interest rates.  

Most recently, the Chinese government has started enforcing stricter controls on capital leaving the country, effecting the ability of buyers with Chinese equity to buy foreign property (assuming they can work around or stomach the 15% Property Transfer Tax surcharge). 

At the beginning of 2017 we’re in a continued period of uncertainty, with sales down about 50% year over year, but listings also down as well. In many categories and neighbourhoods there is a lack of quality properties for buyers to choose from.  So far, most sellers have been reluctant to accept significant discounts from the highs of last spring, although reductions in the 5-10% range have been seen in the limited number of sales since August.  As might be expected, the higher end of the market has seen the most impact to date, with some building lots and spec houses trading at up to 15% less than we saw at the height of the market last spring.  By the end of the year, median prices were still up by about 20% from where they started last January.

Time will tell what the 2017 spring market will bring.  A surge in new listings coupled with ongoing lower sales numbers may be the tipping point to bring about a true market correction. Industry professionals and economists are offering a range of guidance in the upcoming year, from a “steady as she goes” outlook with leveling prices amongst reduced demand, to a more dour outlook with up to a further 10% reduction in prices. From my point of view, one truism of the Vancouver market is that it has always been challenging to find a great property that meets your needs - at a price that you can afford. And when one does come to market, it often sells quickly and sometimes with multiple offers.

So, as in any market, there are opportunities, for both buyers and sellers.

For sellers, it is now more important to be priced competitively, and to have a professional high quality marketing plan to ensure that your property is a prospective buyer’s first choice. Having some flexibility in final terms and dates can be the key to a successful sale. As always, all real estate is local – the value of your property is specific to your neighbourhood, block, and improvements, and to the number of other similar properties competing for buyers’ attention. Call me for an up to date market evaluation and to find out how our proven marketing system can get you top dollar, quicker.

For buyers, having the very latest sales information to determine comparative value, and the ability to receive listings as soon as they are posted on the MLS system is key to getting the quality home you want. Pre-qualification for financing and the ability to fast track due diligence will make your offer more attractive. I’ll work with you to make sure you see the latest listings for properties that match your needs and budget.  Once you decide on a place, I’ll guide you through the process and work with you to craft an offer that gives you the opportunity to secure it on your terms. Give me a call to get started, I’d be pleased to help!

As always, my very best to you and your family in the upcoming year!



Recently Sold Listing 1629 Larch Street, Vancouver, BC


R2107142 - 1629 Larch Street, Vancouver, BC, CANADAI have just recently sold this listing at 1629 Larch Street, Vancouver.

New Listing Ph2d - 2988 Alder Street, Vancouver, BC


R2108091 - Ph2d - 2988 Alder Street, Vancouver, BC, CANADAView my new listing for sale at Ph2d - 2988 Alder Street, Vancouver and currently listed at $1,998,000.

Perched in the northwest corner of Shaughnessy Gate, this SPACIOUS 3 BEDROOM & DEN PENTHOUSE offers SWEEPING VIEWS of the WATER, CITY & MOUNTAINS FROM EVERY ROOM! Beautifully updated with hardwood floors, custom millwork, Italian Berloni cabinetry, chef's kitchen with a Miele/Sub Zero appliance package, heated marble tile floors in the kitchen, bath & den, custom blinds & California shutters, air conditioning, etc, etc. Plenty of room here for your house-sized furniture and a king bedroom set. Pro-active strata, amenities include gardens & a tennis court. Quiet and serene, yet walking distance to the shops of South Granville and everything the Broadway corridor offers, this roomy condo is at the centre of it all - great value in a great location.

New Listing 1629 Larch Street, Vancouver, BC


R2107142 - 1629 Larch Street, Vancouver, BC, CANADAView my new listing for sale SOLD at 1629 Larch Street, Vancouver and currently listed at $1,760,000.SOLD

This half duplex in an exclusive heritage conversion offers a smart open floor plan with multiple outdoor living areas - including a large courtyard patio & a wrap-around ocean view deck! Great layout with the master and guest bedroom on the 2nd floor & a private den up top. Stunning restored art glass windows & oak fireplace are matched with luxury features & modern technology. Solid hardwood floor throughout, chef's kitchen with Bosch/Leibherr appliances, a Crema Marfil marble ensuite, geothermal radiant heating, structured wiring with built-in audio, security, etc. Lush landscaping surrounds this quality build by GH Street Ltd, with balance of new home warranty. Superb location, 2 blocks from the beach. Hurry, this one won't last long!