An RBC economist announced last month that we have probably seen the peak prices for real estate for the year. This correlates well with the fact that all benchmark prices have dropped in June. For detached home, the benchmark price dropped 0.5%. For apartment and attached homes, the benchmark prices have decrease 0.8% and 0.2% respectively. The inventory is rising despite the strong sales. In reaction we see a dramatic reduction in new condo launches and more Craigslist listings of owners trying to sell their presale condos before completion.

The big real estate news last month was the announcement from Canada Mortgage and Housing Corporation (CMHC) that they are putting in more restrictive guidelines for insured mortgages; that is, mortgages that have less than 20% down payment. They have made the credit requirement more stringent and the maximum amount of money you can borrow against your income less. But not to worry. Equally important is the fact that the two other mortgage insurers are not following the lead of CMHC. So, for lenders that work with all three insurers, not much has changed and buyers have nothing to be concerned about.

Another piece of important news is that the NDP pledged to introduce some legislation in response to the report on the recent dramatic increase in condo strata insurance. Details were not provided, but they have mentioned that they can not regulate insurance rates.

Finally, the BC government has decided to extend the temporary rent supplement to the end of August. So hopefully, as many people can get back to work as soon as possible before the end of August.

The post June 2020 Vancouver Real Estate Review first appeared on John Chan Mortgages.

As a result, the March sales were 19.9% below the 10-year average. The inventory was low:  24.8% below March 2019. The demand was high; thus, sales-to-active listings ratios were bullish: 21.1% for detached homes, 33% for townhomes and 28.9% for apartments. This moved prices up over the previous month. 1.2% increase for detached homes. 1.4% increase for apartments and 0.9% for attached homes. However, this is unlikely to continue next month. RBC predicts that home sales in Canada would drop by 30% this year!

Both the Federal Government and Provincial Government have put out many assistance programs. Updates are almost daily so it makes sense to visit their site directly eventhough there are a lot of prettier summary on the internet.

BC Government COVID-19 Page:

https://www2.gov.bc.ca/gov/content/safety/emergency-preparedness-response-recovery/covid-19-provincial-support

Federal Government COVID-19 Page:

https://www.canada.ca/en/department-finance/economic-response-plan.html

Lenders are also helping out by providing the option for mortgage payment relief. Most of them have online applications as the phone lines have been jammed. Go to your lender’s home page and look for the COVID-19 link for the most up-to-date information. If you are having problems locating the right information, feel free to contact me.

Last month government officials and insurers held an online meeting but it doesn’t look like there is relieve anytime soon in regards to soaring strata insurance. Basically, the insurers are saying the way condos are built and managed in BC, it is just more expensive to insure. Being in an earthquake zone also doesn’t help. So, what came of the meeting were recommendations to the government and stratas on educating strata councils on ways to reduce damage to the building, improving building codes to reduce water damage and stop delaying depreciation reports and long-term maintenance activities. Things to consider when you are looking for a condo now.

The post March 2020 Metro Vancouver Real Estate Review first appeared on John Chan Mortgages.

Lenders do NOT reassess your property at renewal as long as you don’t miss any payments. So, for people who bought their property with 5% down payment and the assessment is down 15%, you do not need to be concerned about being kicked out of your home at renewal.

And property taxes are not based on the absolute value of your home. The BC Assessment value is used to determine the proportion you owe of the total city tax budget. So, having your property value drop does not mean you pay less property tax this year versus last year. In fact, this year the city of Vancouver has decided to raise the budget, so most people will be paying more this year.

Note BC assessments are estimates based on July of last year. An appraisal is the only way to determine current value for your home. However, the market has picked up since the fall, so the actual value should be higher. In fact, this trend continues. The sales in December were 9.5% above the 10-year December average.

The sales-to-active listings ratio for detached homes is 15.2%, for townhomes is 25.7% and for apartments is 32.5%. The sales-to-active listings ratio is a measure of supply and demand. When the ratio is between 12 and 20%, the market is considered balance

This supply and demand dynamics is reflected in the price increases. In December the prices of detached homes went up 0.6%, but over a 12-month period the price dropped 4%. The prices of townhomes went up 0.7% in December, but lost 2.4% over the last year. And finally, the price of apartments went up 0.8% in December but lost 2.75% over the last year.

Will this continue in 2020? CMHC, BC Real Estate Association, Royal LePage and Central 1 Credit Union all put out releases to say that they believe real estate sales will strengthen; however, they differ on what will happen to the prices. It ranges from “breaking new records” to “flat”. I don’t see any reasons for new records, so I am siding with the “flat” camp.

The post 2019 December Metro Vancouver Real Estate Review first appeared on John Chan Mortgages.