The Blog

There were quite a few articles written about the foreign buyers’ ban on residential property. It is a 2 year program designed to protect real estate price increases due to foreign buyers’ participation. To me, it is a little too late. The addition of the foreign buyer’s tax has already slowed the purchases and the high interest rate has killed the market. Also there are a bunch of exemptions that make it more ineffectual. International students, temporary residents, people with temporary work permits, refugee claimants and someone with a Canadian spouse are all exemptions. By the time the market turns around, the program would be over. It will be interesting to see if it will be extended. We have enough Canadians and new immigrants to

The real estate market in Vancouver started slow in January. In fact, 42.9% below the 10-year January sales average. New listings are slowly trickling in. 20.9% less than January of last year, but because of the slow sales, the total inventory is 32.1% higher than last January. The sales-to-active listings ratio continues to head down pointing to weaker pricing power for all categories. However, townhomes and apartments have made price gains relative to last month as shown on the table below. It is a bit of an anomaly. Maybe it is due to some of those multiple offer situations I heard about anecdotally. However, the general theme is down. From the Canadian Real Estate Association to the BC Real Estate Association to the Great Vancouver

Currently housing affordability in Vancouver is the worst since in 1981 when the mortgage rate peaked at 20%.  You know how the government promises affordable housing and whenever a project is finished, it doesn’t seem that affordable. Have you wondered how much a property would cost if we took out the exorbitant builder’s profit and all the fees the government charges? I am going to try to figure this out from some readily available data and see how affordable housing can be. From a study out this year by CoConstruct, a construction management software company, the average profit margin for a builder in Canada is 13.2%. Did you expect it to be higher? I was a bit surprised, especially when you compare it to government

Happy New Year! Hope you had a fantastic holiday season. 2022 was an extreme year for real estate in Vancouver. It started very strong with large monthly price increases. For example, townhomes increased 5.9% in February alone. As interest rates started to increase, the price topped out in April and has been falling ever since. By the end of the year, the sales volume was typically around 30% below the 10-year average. The strong start and the weak finish, meant the total year’s sale was only 13.4% below the 10-year average. And the number of listings were only 3.2% below the 10-year average. The MLS Home Price Index composite benchmark price for all residential properties fell 3.3% for the year. In regards to the month

Starting January 1, 2023, a couple of measures to cool the real estate market will come into effect. The timing is a little off but that shouldn’t be a surprise. First there is the ban on foreign buyers for two years. There are rumours that there might be areas such as Whistler that might be exempt but nothing official has come out.  For foreign buyers, purchase agreements signed before January 1, 2023 will be allowed to close. Second is the residential property flipping rule (RPFR). Starting on January 1, 2023 if a residential property (including a rental property) were sold after owning it for less than 12 months, the profits would be deemed business income. That is, you cannot claim principal residence capital gains exemption

With at least one more rate increase by the Bank of Canada overhanging the real estate market in Metro Vancouver, sales continue to be slow in November. It is 36.9% below the 10-year November sales average. The inventory is building up as a result. It is 28.5% higher than November of last year. It seems sellers are not interested in selling into a weak market during an annually slow period as the number of newly listed properties dropped 24.2% from October 2022 which is also 22.9% less than November of last year. However, this has not stopped the price from deteriorating faster. The sales-to-active listings ratio is a measure of supply and demand in the market and does give an indication of the pricing trend.

If you are a senior and you are deciding whether to get a home equity line of credit (HELOC) or a reverse mortgage, you need to answer one question. Do you want to stay in your current home no matter what? If the answer is yes, then a reverse mortgage might be in your future. The problem with HELOCs are that the borrowing limits are set based on the income at the time of application. Unless you set this up before you retire, chances are your limit will not be large enough to last. This is why I like to advocate for getting a HELOC before you retire. This way you have an emergency fund should you need it. They do not charge interest if

The short answer is not really. There is almost no difference. Most people get this mixed up with accelerated bi-weekly where you are paying “extra” on top of the normal amortization schedule. All methodologies in paying off a mortgage faster, actually, are just paying “extra”. And this includes all the fancy “tricks” on YouTube. Accelerated bi-weekly arrive at their bi-weekly payments by dividing the monthly payments by 2. Because there are 26 bi-weekly payments, you are actually making an extra month worth of payments which would go directly against your principal. That is why the mortgage gets paid off faster. That’s it! If you want to see the numbers, continue reading. I ran the numbers for a $500,000 mortgage at 5% for 5 years at

The real estate market in Metro Vancouver continues to be ice cold. October sales were 45.5% lower than last October. That is 33.3% below the 10-year October sales average. The slowing sales the last few months are increasing the number of listings on the market. It is 22.6% more than last October. However, new listings slowed more in October, so inventory actually decreased by 1.2% compared to last month. This is reflected in the slightly stronger sales-to-active listings ratios: 14.3% for detached homes, 21.6% for townhomes and 23.2% for apartments. The higher the ratio, the higher the demand. As you can see from the chart below, the slightly improving demand is slowing the month over month price declines. And the lower priced properties are holding