By most metrics, April was a weaker month for real estate compared to March. The only figure that showed improvement was sales—still 28.2% below the 10-year average, but slightly better than March’s 36.8% below average. While this is hardly a “bright” spot, it was the only metric to show any improvement. Beyond that, conditions worsened. New listings rose to 19.5% above the 10-year average, bringing the total number of active listings to 47.6% above the norm. This is clearly a buyer’s market.

As shown in the table below, the sales-to-active listings ratio declined across all property categories. This ratio is a key indicator of supply and demand: the higher the ratio, the greater the demand. Historically, when this ratio stays below 12% for a prolonged period, it places downward pressure on prices. Unsurprisingly, prices declined month-over-month in all categories.

Looking ahead, I don’t see many bright spots in the coming months. While a baseline level of activity will continue—driven by life events such as family formation, separation, job relocation, and death—any additional market activities will remain weak. Ongoing uncertainty over tariffs is making people hesitant to make the largest investment of their lives. A recent example is the unexpected announcement of 100% tariffs on films produced outside the U.S. In 2022, Vancouver’s film industry employed 26,000 people and generated $2.7 billion in GDP. How many of those 26,000 workers will feel comfortable taking on hundreds of thousands in debt under current conditions? And how many employers in that sector will feel confident enough to hire or expand?

Even before the tariff disputes, Canada was already flirting with recession. Recent employment data showed a rising unemployment rate nationwide, primarily due to declining manufacturing jobs. While Vancouver hasn’t felt the full impact yet, I’ve heard from restaurant owners who are experiencing slower sales. I’ve also noticed an increase in inquiries about refinancing and private mortgages over the past month. The recent temporary easing of tariffs between the U.S. and China is a hopeful sign—perhaps Trump’s advisors have convinced him that a complete shutdown of trade with China would be catastrophic. Tariffs will likely remain elevated and harmful to all economies involved, but at least we’re not looking at 145% tariff.

As you can see from the graph below, condo prices peaked in 2021. Many presale high-rises purchased at that time are now completing. Appraisals are coming in lower than expected, leaving some buyers unable to make up the shortfall to close. Those unsold units will now have to compete with resale inventory. Additional supply is also coming online in Coquitlam and Burnaby. While good properties priced right will always find buyers, people who purchased at peak prices in 2021 may now face losses if forced to sell. I’ve already seen some private lenders reduce the loan-to-value ratio they’re willing to offer on condos—a further sign of pessimism in the market.

The Bank of Canada is expected to cut its overnight rate soon. This will directly affect variable mortgage rates, while fixed rates—already influenced by market expectations—may not shift much. However, I don’t believe this move alone will be enough to offset the uncertainty surrounding U.S. policy. Real estate activity is likely to remain subdued for the time being.

Have a happy Victoria Day and enjoy a long weekend.
And enjoy the rest of the month.

The post April 2025 Vancouver Real Estate Review first appeared on John Chan Mortgages.

Here’s the issue: When you buy a new home with the intention to flip it — and not to live in it or rent it out — the Canada Revenue Agency (CRA) considers that a commercial activity.
That means when you go to resell it, the sale is subject to GST.

If you don’t collect the GST from your buyer at the time of resale, the CRA can come after you for it. Since you already paid GST when you first bought the property from the builder, you could end up out of pocket for GST twice.
What’s the fix? You need to register for a GST/HST number and claim back the GST you paid on purchase as an Input Tax Credit. That way, you only collect and remit GST once — at resale.

But consult your lawyer as I am not a tax professional. Your situation may be different. Canadian tax laws are full of traps like this, so make sure you get proper advice before you flip a property.

The post Avoid Paying GST Twice on a Property Flip first appeared on John Chan Mortgages.

Since I’ve been offering alternative mortgage solutions for over a decade, I feel I should weigh in and clear the air. If your alternative mortgage broker seems opaque or shady, you should run. There are proper procedures in place that should mitigate all of these “risks.” Of course, in an industry where the barrier to entry is low and a lot of money changes hands, there will always be some bad actors.

Here’s what you should know about how a proper alternative lending transaction works:

1. Your broker should be licensed.
   The person you’re dealing with should be registered with the BC Financial Services Authority (BCFSA) as either a submortgage broker or a mortgage broker. You can check their registration status here:
   BCFSA – Find a Mortgage Broker: https://www.bcfsa.ca/public-resources/mortgage-brokers/find-mortgage-broker
2. Compensation should be transparent.
   Your broker is required to provide a document called Form 10, which both you and the broker must sign. It outlines any possible conflicts of interest and discloses all compensation. If your broker is being straightforward, what they tell you about fees should match what’s written in the Form 10. If there’s “no funny business,” there should be no hesitation in sharing this upfront.
3. Understand the fees.
   For someone with poor credit or just slightly short on income for a traditional mortgage, a broker fee starting at 1% is common. For second mortgages, 3% to 4% is standard. Keep in mind that CMHC insurance also costs around 4% for buyers putting the minimum down payment. Whether that’s considered “expensive” depends on what you’re comparing it to.
4. Don’t pay upfront lender fees.
   You should never be asked to pay lender or broker fees out of pocket before receiving your funds. Instead, these fees—along with legal costs—are typically deducted from the loan proceeds and disbursed through the lawyer’s office. The only exception might be an upfront cost for a property appraisal or a small deposit to cover legal expenses once your file is approved. This usually ranges from $1,000 to $1,500.
5. Your broker should have a long-term plan for you.
   Your broker should care about your exit strategy—how you plan to move back to a traditional lender. They should be asking about your plan to pay off the high-interest loan and helping you build a roadmap to return to a regular lender or become debt-free altogether.

Final Thoughts
Alternative lending can be a powerful financial tool when used properly. It can provide short-term relief or bridge financing during times when traditional lenders say no. But it should never be a long-term solution without a plan. Work with someone who not only explains the process clearly, but also has your best interests in mind—and a strategy to get you back on track.

The post The Not-so-Shady World of Alternative Lending first appeared on John Chan Mortgages.

With such a setup, you would expect relatively low demand compared to supply, and the sales-to-active listings ratio reflects this. From the table below, you can see the ratio is 10.3% for detached homes, 21.5% for attached homes, and 16.2% for apartments. Typically, anything between 12% and 20% is considered balanced, while below 12% indicates weak demand. However, as shown in the table, all categories of housing saw month-over-month price increases. This is hard to explain—perhaps the small number of buyers are competing fiercely for the best listings?

Early last month, there were concerns that the economy was too hot and that the Bank of Canada might delay interest rate cuts. I question this narrative, especially since the same month also brought news of a weakening job market—only one job for every three unemployed people actively looking. The number of people who have quit looking for work has also increased, and mortgage arrears are creeping up.

But this conversation has become secondary in light of the tariff war initiated by the U.S. on April 2nd. This will likely force the Bank of Canada to lower interest rates to support an economy that could slip into recession if the tariffs remain in place. And more and more, it seems like they will. I’m in the camp that believes Trump genuinely thinks this aggressive plan to bring manufacturing back to the U.S. will work. Since the U.S. is our largest trading partner, this policy will hit Canada harder than most. I suspect the Bank of Canada will continue cutting its overnight rate this year if the tariffs persist. That would lower variable-rate mortgages. The bond market should anticipate a weakening Canadian economy and bid yields lower, which in turn would bring down fixed mortgage rates—although in times of severe panic, banks might raise rates to cover added risk.

This news has overshadowed a couple of other notable developments. One is that Mark Carney has cancelled the capital gains increase that was announced earlier. The capital gains inclusion rate will remain at 50%, and we won’t see the proposed 66.67% rate come into effect. While this is good news, I’m sure it’s frustrating for those who went out of their way to sell assets ahead of the anticipated change.

The other development is the provincial government’s cancellation of the secondary suite program, which would have provided a forgivable loan of up to 50% of the renovation costs for adding a new suite. I’m sure this is causing headaches for people who were relying on the program.

Not a lot of great news out there. I hope Easter brings you a bit of reprieve from all the negativity. Stay strong! And Happy Easter!

The post March 2025 Vancouver Real Estate Review first appeared on John Chan Mortgages.

The sales-to-active listings ratio is a key measure of supply and demand. Typically, a reading between 12% and 20% is considered balanced. The higher the ratio, the greater the demand and the stronger the upward pressure on prices. While the current sales-to-active listings ratio suggests a balanced market, the 10-year average numbers indicate a weaker price environment. Sales are 28.9% below the 10-year average, while new listings have increased to 11.6% above the 10-year average. As a result, total inventory is growing—it is now 36.4% above the 10-year average.

With the Trump tariff uncertainties, predicting the market’s direction has become more difficult. It is likely that interest rates will decline as the Bank of Canada aims to stimulate business activity. However, given the uncertainty, businesses may be reluctant to invest long-term even with lower interest rates. Some fortunate individuals with stable employment may take advantage of the lower rates to buy, but many will remain cautious as the job market weakens.

Before the tariffs became certain, rate predictions suggested that fixed rates had likely bottomed out, while variable rates might have had another 0.50% to drop. However, with the tariffs now almost certain, rates could fall even further. According to BMO, if the tariffs on Canada are set at 25% for a year, but 10% on energy products, and Canada retaliates with tariffs on $155 billion in U.S. imports, the Bank of Canada may lower its rate by another 1.0%. Given the erratic behavior of the orange one, predicting the final impact is nearly impossible. However, the longer the tariffs remain in effect, the greater the economic damage.

Ultimately, when job losses mount, maintaining a healthy real estate market becomes unsustainable.

I think the world can use some green beer about now. Enjoy St. Patrick’s Day!

The post February 2025 Vancouver Real Estate Review first appeared on John Chan Mortgages.

The Shawn Oaks Townhouse Complex
Shawn Oaks Townhouse Complex is located on Oak Street, near the former Oakridge Transit Centre. Landmark Premiere Properties acquired the site in phases between 2016 and 2021. The developer proposed a project consisting of a 31-storey strata tower, a 33-storey strata tower, and a six-storey social housing building, totaling over 600 residential units, along with a one-storey childcare facility with 37 spaces. However, this proposal has not yet been approved, and no rezoning application has been submitted.

Currently, the property has two mortgages, and the lenders are demanding repayment. The first mortgage, issued by Trez Capital, stands at approximately $73,479,000, accruing interest at $29,204 per day. The second mortgage, provided by the Peterson Group, amounts to $28,439,000, with daily interest costs of $16,916. Landmark has stated that in December 2019, the property was appraised at $100,831,806 and that this financial difficulty is isolated to Shawn Oaks, without affecting its other projects.

Receivership and Reverse Vesting Order
Trez Capital petitioned the court for a receivership, which the Peterson Group supported. This decision allows for the use of a reverse vesting order (RVO), a legal mechanism for selling distressed real estate. Instead of selling the assets directly, which would trigger a substantial property transfer tax, all liabilities are transferred to a new shell entity, leaving only the real estate in the original corporation. The shares of the original corporation are then sold, effectively bypassing the transfer tax.

Key Takeaways

Real Estate Investing is Risky
Real estate investment can seem easy when markets are rising, but downturns reveal who has planned ahead. Even experienced developers can fail when financial conditions change.

Second Mortgages Carry High Risk
Lending in second position is inherently risky, particularly if there isn’t sufficient equity cushion. In a default situation, costs can quickly accumulate. Since the first mortgage lender gets paid first, second-position lenders risk losing money if they are not careful. In this case, the total outstanding debt between both mortgages is about $101,965,000. Additionally, legal fees and sales commissions could easily add another $1.25 million or more. With a daily interest cost of $46,210, by the time the sale is finalized, the second lender might not recover the full amount they are owed.

Incorporation Can Protect Assets
Landmark has stated that its other projects remain unaffected by this insolvency. This is because incorporating a business helps contain liabilities within the corporation. The Shawn Oaks Townhouse Complex is held within one corporation. No matter how much debt is owed, creditors cannot pursue the owner’s other assets.
Use a holding company to avoid paying the property transfer tax
Holding real estate within a holding company, allows you to sell the property without paying the property transfer tax. This is because you are selling the shares of the holding company and not the property inside. There is no transfer of title.

This is why Trez Capital requested a reverse vesting order to facilitate the sale of the townhouse complex. The RVO allows the shares to be sold. For a $100,000,000 complex, we are talking about 3M in property transfer tax!

That’s all for now—hope you found this analysis insightful!

The post Lessons from a Failed Real Estate Project first appeared on John Chan Mortgages.

The influx of new listings reduced the sales-to-active listings ratio across all property types. This ratio is a measure of supply and demand in the market. As shown in the table, there has been a four-month downward trend, indicating a weakening market. In general, prices have been declining. However, in January, detached homes saw a slight price increase of 0.4% compared to December 2024. This could indicate that some buyers remain optimistic due to the interest rate environment. Meanwhile, townhomes and apartments experienced price declines of 0.8% and 0.2%, respectively.

The future of the economy—and, by extension, the housing market—will depend largely on how tariff issues are resolved. There is some disagreement among economists about whether the Bank of Canada will raise or lower interest rates in response to the economic impact of tariffs. I believe tariffs will hurt the economy, and the Bank of Canada should lower rates in response. If you look at the movement of the Canada 5-year government bond, bond traders seem to share this view. The announcement of impending tariffs on the weekend drove bond yields down Monday morning, but when an extension seemed likely, yields recovered somewhat. Remember, the 5-year mortgage rate follows the 5-year government bond.

February is a time for love – love your partner, love your family and love yourself!

Have a great month!

The post January 2025 Vancouver Real Estate Review first appeared on John Chan Mortgages.

In Canada, mortgages are renegotiated periodically, and new rates and payments are set at that time. In contrast, in the United States, mortgages are not renegotiated periodically. It is common to have a 30-year mortgage with a fixed interest rate for the entire term. Imagine securing one of those 30-year mortgages when interest rates were exceptionally low!

Term – refers to the length of the agreement for the mortgage. In Canada, it is typically between 1 and 5 years before the mortgage rate is renegotiated.

Maturity date – refers to the date the mortgage term ends. At this time, you can either pay the mortgage balance in full without penalty, renew or refinance the mortgage.

Open term – refers to a type of mortgage where you can pay it off in full at any time without any penalties. These usually carry much higher rates than closed term mortgages.

Closed term – refers to a type of mortgage where paying in full or payment exceeding the allowed prepayment will incur penalties.

Fixed rate – refers to a mortgage option where the interest rate remains constant throughout the term of the mortgage. This has the benefit of predictable and identical monthly payments but the disadvantage of higher penalty for early repayment, especially if the fixed rate mortgage is issued by a major bank.

Variable rate – refers to a mortgage option where the interest rate changes based on the lender’s prime rate, which typically follows the Bank of Canada’s policy interest rate (also known as the overnight rate). For example, if the Bank of Canada lowers its rate by 0.25%, the lender’s prime rate usually decreases by the same amount. This means the interest rate on the mortgage will also drop by 0.25% until the next adjustment.

When the interest rate decreases, the amount of interest charged on the mortgage is reduced. To keep monthly payments the same, the lender may apply the savings directly to the mortgage principal, helping to pay it off faster. If the interest rate increases, the reverse happens—more of the payment goes toward interest, and less toward the principal. Some lenders, however, adjust the monthly payment instead of the principal to maintain the original amortization schedule. In this case, if rates rise, monthly payments increase. This type of mortgage is technically called an adjustable-rate mortgage (ARM), though the terms “variable rate” and “adjustable rate” are often used interchangeably.

One advantage of a variable or adjustable-rate mortgage is that the penalty for paying it out early is usually capped at three months’ interest. However, keep in mind that some lenders may calculate this penalty using a rate other than the mortgage’s contract rate.

The post Mortgage 101 – Glossary first appeared on John Chan Mortgages.

In some cases, properties are assessed based on their potential use rather than their current use. This means your property might be taxed as though it’s a prime redevelopment site, even if you’ve lived there for years and have no way to take advantage of it. Crazy, right? But how much of a difference can this make? Consider a real example near the Oakridge/41st Avenue Canada Line Station. Two similar properties on adjacent lots had dramatically different values: one was assessed at under $4 million, while the other was $7.6 million. The difference? One was taxed based on its current use, the other on its potential use.

If you notice a sharp increase in your property assessment and you’re a long-time resident, there’s a way to address this. BC Assessment allows eligible homeowners to apply for a special assessment that values the property based on its actual use. To qualify, you must be able to answer “yes” to all three of the following questions:

Is your property 5.02 acres or smaller, used only for residential purposes, and accommodating three or fewer families?
Have you or your spouse continuously owned and lived on the property as your principal residence for at least 10 years?
Do real estate sales suggest your property is now valued more as a redevelopment site than for its current residential use?

If you meet these criteria, you need to submit your application to BC Assessment before January 31st each year to be considered. Missing the deadline could mean paying significantly higher taxes. For more details and to start your application, click the link.

The post Protect Yourself from Unfair Property Tax Assessment first appeared on John Chan Mortgages.

The real estate market in 2024 was slow, with sales down 20.9% compared to the 10-year average.
Throughout most of the year, monthly sales figures hovered around 20% below the 10-year average, but activity started to pick up in October.

December followed a similar trend to November. While sales figures compared to the previous year show an impressive 30% increase, the bigger picture reveals they were still 14.9% below the 10-year average.

The sales-to-active listings ratio, a key indicator of supply and demand, stayed relatively unchanged across all property categories. This ratio reflects how balanced the market is: the lower the number, the weaker the demand. For prices to rise, the ratio generally needs to remain above 20% for several months. As shown in the chart below, detached home prices in December remained steady, while townhomes and apartments saw small declines of 0.3% to 0.4%.

Last month the Bank of Canada lowered their overnight rate by 0.50% and most believe they will cut another 0.25% on January 29th. This could give the market a boost by lowering variable-rate mortgages. However, the outlook for fixed-rate mortgages is less certain. Potential inflationary tariffs could drive bond yields higher, which would, in turn, push up fixed mortgage rates. With leadership changes coming in both the U.S. and Canada, the market is likely to face some turbulence in the months ahead.

Enjoy the rest of January,
And happy Lunar New Year to those who celebrate it!

Below, you’ll find the schedules for upcoming rate announcements in the U.S. and Canada.

The post December 2024 Vancouver Real Estate Review first appeared on John Chan Mortgages.