Vancouver’s Red Hot Real Estate Market has become a news sensation. It’s in the headlines. It’s on TV. It’s in every other social media post you scroll through in your feed. But the question remains—what is actually happening in the market?
Well, we have broken it down into simple answers so you’ll know what is happening in Vancouver Real Estate. With help from one of the top realtors in BC, Alistair Young of Young Real Estate Group, we have the answers you have been looking for.
- What is the market doing right now?
According to recent statistics, the market has begun to increase and “heat up” again. This is not uncommon for springtime, as a number of factors contribute to increased sales.
“In the spring we typically begin to see the market’s inventory become more saturated, an increase in buyers and a sense of urgency to buy.” – Alistair
With March came an influx of homes for sale and an increase in demand. This lead to the prices going up – and currently staying up – as inventory is limited.
- What about government regulations?
As many of you are aware, the government has issued a series of regulations in an effort to cool the market. This included the Foreign Home Buyers Tax, the Stress Testing Measures implemented last fall and the most recent one being the Empty Home tax.
The one that has gotten the most press is the Foreign Home Buyers tax.
In recent months reports indicated that the interest of foreign buyers appears to be levelling off, as they accounted for little more than three per cent of both the value and number of all transactions, according to the most recent property transfer tax data.
We asked Alistair his opinion on this tax:
“It is still unclear the final effects of the tax and how the recent announcement of the exemption from the tax for those with work permits will continue to impact the market. Time will tell if the tax has served its purpose. But there was a definite decrease in the interest in foreign home buyers.”
This leaves the problem of the amount of empty homes that surrounds the Vancouver area.
Enter the Empty Home Tax. This is a new initiative the government is rolling out over the next several months. This tax applies to homes that are not occupied by a tenant for at least 180 days during the year. The tax amount is a 1% increase in property taxes, which at first may not seem like much but considering how much taxes went up this past year the 1% increase is substantial. This comes into full effect as of July 1 meaning that all empty properties must be occupied before that date to be exempt.
- How to afford a house in this crazy market?
This is the question first time home buyers are asking all across Vancouver and the Fraser Valley. The answer is not a simple one, but there are solutions.
The first is to work with a dedicated mortgage broker. They can help you put together a strategy for saving for a down payment, fixing your credit, and offer unique solutions to fit your situation. They also have access to an array of different lenders, allowing them to get you the best rate possible for your unique financial situation. Talking to them early and talking to them often can help tremendously during the process of house hunting.
The second is to consider purchasing a property with a rental unit. The rental market in Vancouver and the surrounding areas has skyrocketed in the past few months, opening the door to a potential opportunity for homeowners. Having a tenant can help ease the burden of a larger mortgage by bringing in additional income.
Finally, working with a realtor you trust can make a difference. Having a realtor who knows the area you want to live in, knows the market, and knows your budget is crucial. They can direct you to the best locations to suit your needs and find you cost-effective solutions to help you get into your dream home.
As Alistair says “For many a home is the biggest purchase they will make in their lifetime—partnering with a realtor who understand that and can help you plan not just for today, but for the future can make all the difference.”
Markets have peaks and valleys. Currently we are in more of a peak stage, but how long will that last? J Continue to stay educated, stay informed and make decisions that will work for your future—not just for the here and now. Build a dedicated team around you to help you through this entire process, and despite the curveballs the market may throw at you, you will be set to succeed.