Vancouver still top real estate market to watch in Canada

    

   

Despite drops in sales and prices in Vancouver, a national report has just named the city as the top Canadian real estate market to watch in 2017 and millennials are playing a large part in that.

Investors are continuing to shift from residential to mixed-use projects that combine housing with retail or commercial. There are also predictions of more pressure on affordability over the next five years as increases in immigration keep demand for housing high. Millennials are driving up Vancouver’s very tight rental market, searching for new, higher-quality units, closer to amenities and transit. It points out rental units have been in incredibly short supply for the past five years, adding that an emerging challenge is the lack of amenities from stores to schools in the downtown core.

Nationally, housing prices will drop about one per cent in 2017 with concerns of a bigger pullback in Vancouver and Toronto.  Canada’s overall housing market is poised for a year of stability.

  

Vancouver is expected to lead all Canadian cities with 3.3% in GDP growth in 2017 propelled by strong employment gains and rousing housing starts. Most of these starts will be multifamily units as developers focus on building mixed-use developments and high-density condos. It remains to be seen how the British Columbia government’s additional property transfer tax for foreign buyers will affect the Vancouver market over the long term. While intended to curtail foreign property investment, skeptics suggest the tax will do little to dissuade foreign buyers who can already afford the market’s sky-high prices. Millennials are driving up Vancouver’s rental market, searching for new, higher-quality units near amenities and close to transit. Rental units are in incredibly short supply, with vacancy rates consistently around or below 1% for the past five years. Another emerging challenge is the lack of amenities from stores to schools in the downtown core.

For further details contact Carmen Leal at CL Personal Real Estate Corporation

D: 604-218-4846 E: carmen@carmenleal.ca W: www.carmenleal.ca

Feds close tax loophole amid new measures to reduce housing market risk

Ottawa has announced a number of measures aimed at curbing risk in the country’s housing markets, including closing a tax loophole and tightening mortgage insurance rules to prevent borrowers from taking on too much debt.

Finance Minister Bill Morneau said Monday that the government will make changes related to the principal-residence tax exemption.

The exemption allows homeowners to avoid paying capital-gains tax on the sale of a home as long as they are living in it.

That exemption will now be available only to Canadian residents, Morneau said, and families will only be allowed to designate one home as their primary residence.

The federal government will also beef up rules surrounding stress tests for insured mortgages to make sure that borrowers don’t take on more debt than they can handle if interest rates go up or their income drops.

Some households began carrying high debt loads and pockets of risk have begun to emerge”

“Low interest rates have gradually changed the way both lenders and borrowers view debt and indebtedness in this country,” Morneau said during a news conference.

“As these attitudes and behaviours have changed, some households began carrying high debt loads and pockets of risk have begun to emerge.”

Starting Oct. 17, all insured mortgages will have to undergo a stress test to determine if the borrower will still be able to make his or her mortgage payments if interest rates rise.

Previously, these stress tests weren’t required for fixed-rate mortgages longer than five years.

Another policy change coming into effect on Nov. 30 will require mortgage loans that the banks insure with portfolio insurance to meet eligibility criteria that previously only applied to highly leveraged insured mortgages.

The changes come as concerns mount that housing costs in Toronto and Vancouver have become increasingly unaffordable for many Canadians while foreign investors purchase homes and turn them around for a quick profit.

Many middle-class families looking to buy homes have found themselves priced out of the market, Morneau said, and in some cases that has led them to take on high levels of debt.

There are all sorts of questions that just have never been asked about foreign buyers”

“Affordability is an issue that concerns many middle-class families, particularly here in Ontario and in B.C.’s Lower Mainland,” Morneau said.

“It’s a real issue and we don’t take it lightly. Federal government policy alone cannot control house prices; certainly not directly. But it does have a role in ensuring that housing markets are stable and functioning efficiently.”

A report released last week by Swiss bank UBS singled out Vancouver as being at greatest risk of a housing bubble in the world.

Chris Ballard, Ontario’s housing minister, called the federal efforts “an interesting move.”

“We’re very concerned about affordable housing in Ontario,” he said at the Ontario legislature shortly after Morneau’s announcement.

“I would like to see some solutions brought to the table sooner rather than later, but at the same time what we realized early on is Ontario really doesn’t have, and the federal government really doesn’t have, the data that we need to make the best decisions,” he added.

“There are all sorts of questions that just have never been asked about foreign buyers.”

Ottawa will also be launching a consultation with industry members this fall to discuss the possibility of introducing lender risk sharing — a policy that would see the banks shoulder more of the risk for mortgage loans defaults, for instance by way of an insurance deductible.

Further questions contact Carmen at Carmen Leal Personal Real Estate Corportation 604-218-4846

Metro Vancouver home sales return to typical August levels

– For the second straight month, home buyer demand in Metro Vancouver* moved off of the record-breaking pace seen earlier this year and returned to more typical levels. 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver totalled 2,489 in August 2016, a decline of 26 per cent compared to the 3,362 sales in August 2015; 10.2 per cent less than the 2,771 sales in August 2014; and one per cent less than the 2,514 sales in August 2013. August 2016 sales also represent a 22.8 per cent decline compared to last month’s sales. From a historical perspective, last month’s sales were 3.5 per cent below the 10-year sales average for the month. 

“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” Dan Morrison, REBGV president said. "Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.

For complete report  Click HERE

Carmen Leal Personal Real Estate Corporation

Website: www.carmenleal.ca

Email: carmen@carmenleal.ca

Cellular: 604.218.4846

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