Metro Vancouver Resale Market Cools from Red

Posted on May 22, 2008 by Lyn Hart

Posted in housing forecast, real estate market, real estate market report

MLS® sales in Metro Vancouver will come down off the near-record high reached in 2007, but stay well above the ten-year average of 31,000. Strong homebuyer demand, fuelled by job growth and a steady flow of people moving to the region will keep sales brisk. However, waning consumer confidence and high mortgage carrying costs will constrain home sales. MLS® sales will dip eight per cent to 36,000 units in 2008, and a further three per cent in 2009 as mortgage rates start to creep up.

The main factors tempering homebuyer demand will be high home prices and softening consumer sentiment. With the average resale home price in Metro

Vancouver at more than $600,000 and still rising, some potential buyers will opt to delay their purchase. Some low equity and first time home buyers could find it difficult to negotiate a mortgage with achievable monthly carrying costs, in spite of low mortgage rates. First time homebuyers are an important source of homeownership demand, particularly for apartment condominium units, making up more than one-third of people who bought a home in Metro Vancouver over the past year. The housing market collapse in some parts of the US has added uncertainty in consumers’ minds. This unease, combined with slowing economic growth in Central Canada and layoffs in the BC forest industry have contributed to lower levels of consumer confidence. Combined with mortgage rates above year-ago levels, these factors led to a decline in home sales in the first quarter of 2008 and will keep sales flat in the near term.

The supply of resale homes on the market will grow as homeowners look to capitalize on the home equity build-up resulting from four straight years of double-digit home price increases. The decision to sell may take on added urgency in light of the housing market downturn in the US. In the first quarter of 2008, the average number of active MLS® listings for sale in Metro Vancouver increased nine per cent compared to the same period last year, with the supply of apartment condominiums for sale increasing more than other home types. At the end of the first quarter there was a five month supply of homes on the market, up from four months one year ago. This level of supply is still shy of the seven to eight months supply that has characterized balanced market conditions historically in Metro Vancouver. Look for this trend of increasing listings to continue through the remainder of this year and into next.

The combination of moderating sales and more homes on the market will bring demand and supply conditions closer to balance and slow home price growth. Moderating sales and more homes on the market will mean fewer multiple-offers per property and more choice for homebuyers. Homes will take longer to sell as the market cools from the red hot pace of the past few years, and reflect a more normal pace. Home price growth will slow into the single digit range this year, with eight per cent appreciation in values forecast, and a further five per cent growth expected in 2009.

This is an article from CMHC's Housing Market Outlook - Vancouver and Abbotsford CMAs Second Quarter 2008. To read this report in its entirety, go to http://www.cmhc-schl.gc.ca/odpub/esub/64363/64363_2008_B01.pdf

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Keep Up to Date in Real Estate

Posted on May 16, 2008 by Lyn Hart

If you're looking for current real estate news, look no further than my website!

Visit the link Hot Off the Press! on www.lynhart.ca and find the most recent newspaper articles from The Vancouver Province, The Vancouver Sun and The Globe and Mail to read about the real estate market, renovating tips and even decorating ideas!

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$23 Million in Just Hours!

Posted on May 11, 2008 by Lyn Hart

Posted in real estate market, vancouver condos

by Kevin Diakiw - Surrey North Delta Leader - May 07, 2008

A real estate frenzy continues in North Surrey, where $23 million worth of apartments sold in less than four hours over the weekend. Almost 10,000 people registered for the third phase of Quattro, a residential apartment project near 108 Avenue and King George Highway. The 109 available suites sold in less than four hours.

“The energy for the sale was fantastic. The suites sold as quickly as we could offer them,” said Bill Morrison, partner of PilotHouse Real Estate Marketing, who has orchestrated all of the Quattro sales. “At least half the buyers intend to live in the suites they purchased, so it’s apparent people want to be a part of the new downtown area in Surrey with its close proximity to SkyTrain and other amenities.”

Saturday’s sell-out was the third wave of brisk buying at the development. Building one in Quattro sold out in February 2007 in four hours. Less than a month – and 7,500 registrants – later, building two sold out in an unprecedented 67 minutes. The first building is expected to be finished for occupancy this fall. Construction of the second building is well underway.

Quattro is a six-phase development located on 10 acres of property at the corner of 108 Avenue and East Whalley Ring Road in North Surrey. Suites in the third phase began at $139,900, and range from 407 to 1,215 square feet.

Condominium and strata property law in British Columbia can be complex. If you're ready to buy, be sure you know what you're getting into. Have a professional realtor advise you, regardless of whether the homes are new or re-sale.

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Real Estate Bucks Fears So Far

Posted on May 11, 2008 by Lyn Hart

Posted in market

Prices Hold, but More Owners Want to Sell

by Jeff Nagel - Peace Arch News - May 08, 2008

A U.S.-style real estate meltdown shows little sign of coming here. House prices have kept climbing in much of the Lower Mainland in 2008 so far, market statistics released to the end of April show.

The benchmark detached house in Metro Vancouver climbed 5.6 per cent in price in the first four months of the year to $771,321. Townhouse prices are up on average 4.5 per cent year-to-date in Metro Vancouver to $477,900, and condo prices are up 2.9 per cent to $390,000.

Equivalent figures for the Fraser Valley Real Estate Board show the average detached home sold for $547,600 in April, up 1.8 per cent from December. Fraser Valley townhouses went up 1.7 per cent on average to $344,600 and condos there are up nearly three per cent to $235,800.

But there is evidence the market is softening. April sales are down from this time last year in Metro Vancouver and both realtor groups are reporting a major surge of new listings from owners who now want to sell their property. Fraser Valley realtors reported the jump has pushed active listings to near-record levels. The groups called it a rebalancing of demand that had heavily favoured sellers over buyers.

“There is a lot more choice on the market today,” said David Watt, president of the Real Estate Board of Greater Vancouver. Other observers say fear of a major drop is a likely factor behind the increased listings.

“We’re coming off four straight years of double-digit home price increases,” Canada Mortgage and Housing Corp. analyst Robyn Adamache noted. “I think people are partly taking into account what’s happening in the U.S. and getting worried, but also just wanting to get their homes on the market to take advantage of some of the equity gains they’ve seen.”

Vancouver’s job and population growth trends and geography, however, make a major collapse here unlikely, she said. CMHC forecasts a residential real estate price gain of eight per cent this year and five per cent in 2009. Adamache said the proportion of homes bought and resold within 12 months – a good measure of flipping – has been trending down since mid-2007. The realtor board stats show that while prices in most areas are still up strongly from one year ago, several cities have seen recent prices either plateau or even dip slightly from December to April.

Among the areas where prices dipped in April were detached houses in New Westminster and Pitt Meadows, townhouses in Coquitlam and North Vancouver and condos in North Vancouver and Vancouver’s west side. (In each case, April’s benchmark price was down from the three-month average, signaling the latest home sales went for less.)

In the Fraser Valley, the average sale price for White Rock houses dropped 3.9 per cent in the past month and Abbotsford townhouses were down 8.5 per cent. In contrast, some of the biggest recent gains have come in Port Moody after the province announced that city would be on the route of the planned Evergreen Line SkyTrain extension. The benchmark detached house price in Port Moody soared to $813,900 in April – up 31 per cent from $620,000 in December.

If you're thinking of selling, be prepared to have your home on the market longer now that there's more choice for buyers. Location, size, and condition all play an important part in selling your home. Improving your home's curb appeal and a well researched list price will help you sell faster.

I can give you sound advice based on the current market. Call me for a consultation to list your home today!

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BC Housing Forecast for 2008

Posted on May 8, 2008 by Lyn Hart

Posted in housing forecast, real estate market

According to the BC Real Estate Association, after six years of elevated sales levels and rapidly rising home prices, the Vancouver housing market is expected to be more balanced over the next 24 months.

Home sales are trending lower and are forecast to decline 8 per cent to 35,900 units in 2008. Eroding affordability has been somewhat offset by a diverse housing stock and the popularity of 40-year amortized mortgages. However, some would-be homebuyers are being squeezed out of the market by high prices. In addition, investor activity is waning in light of more gradual appreciation of home prices and uncertainty around the impact of a weak US economy and its housing recession. Vancouver will remain a bright light of North American housing markets, despite reduced unit sales.

Average residential prices are forecast to increase 9 per cent to $621,000 this year, and a further 5 per cent to $651,000 in 2009. Less upward pressure on prices is the result of fewer home sales and an inventory that is 17 per cent higher in the first quarter compared to the previous year. This is good news for homebuyers who have had to compete in recent years for a limited number of homes for sale. Housing starts in the Vancouver CMA climbed 11 per cent to 20,736 units last year.

Low new home inventories are a signal for home builders. Yet, in addition to capacity constraints, builders are facing higher financing costs resulting from tightening credit. This causes them to pay increasing attention to market segmentation and depth of demand. While housing starts were up 19 per cent in the first quarter, they are forecast to remain near 2007 levels this year, albeit declining by 1 per cent to 20,500 units.

To read the BCREA Housing Forecast publication in its entirety, go to http://www.bcrea.bc.ca/economics/forecasts/2008-05Forecast.pdf

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Non-Resident Buyers & Sellers in British Columbia

Posted on May 3, 2008 by Lyn Hart

Posted in non resident buying and selling, real estate

There are certain legal and accounting issues that arise when a non resident of Canada acquires or sells property in Canada.

Non-Resident Purchases:

The issues that arise from a non resident purchase are not from the purchase of the property, but rather from holding the property over a long period of time. There are no restrictions for a non resident purchase, nor are there tax implications. A non resident may purchase as many properties as they wish.

Tax issues may arise on the holding of property by non-residents. Non-residents of Canada are subject to tax on various kinds of income paid to them, including rental income. If you are a non resident and are renting property in Canada, a tax return must be filed each year.

Non-Resident Sales:

While there are no issues when a non-resident acquires property, this is certainly not the case when a non-resident disposes of property.

The Income Tax Act of Canada provides that whenever a non-resident disposes of property, the non-resident is required to pay the appropriate amount of taxes on any gain. In order to satisfy the purchaser that the appropriate amount of taxes are being paid, the vendor must provide to the purchaser, on or before closing, a clearance certificate from Revenue Canada. This certificate is issued by the federal government and certifies that a certain amount of money is payable for the taxes. The amount owing is deducted from the sale proceeds and sent directly to the federal government by the vendor's lawyer.

The clearance certificate is issued pursuant to section 116 of the Income Tax Act and is usually required on the closing date. It may be applied for in advance of the closing by the vendor, but not until there has been a contract of purchase and sale entered into by the vendor, with all subjects being removed. The wait for the clearance certificate is usually around 6-8 weeks, so in a perfect world, there would be a 6-8 week lead-time between when the subjects are removed and the completion date.

Complications can arise if the certificate is not obtained prior to the closing date. In such a case, the purchaser is required to holdback from the sale proceeds a percentage of the selling price. This percentage is either 25% or 50%, depending on whether the property is non-depreciable property (a residence of the vendor) or depreciable property (the property has been rented). The transaction closes with the money remaining in a lawyer's trust account until the certificate is obtained. Once the certificate is obtained, the taxes are paid from the holdback and the vendor receives any amount left over.

Note that the holdback is based on the selling price, not the equity in the property. If there is financing on the property, the vendor may need to pay this financing from other sources.

Who is a Non-Resident?

The term "resident" is not defined in the Income Tax Act, however, the courts have held "residence" to be a "matter of the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living with its accessories in social relations, interests and conveniences at or in the place in question." The courts have held that an individual is "ordinarily resident" in Canada for tax purposes if Canada is the place where the individual, in the settled routine of his or her life, regularly, normally or customarily lives. In making a determination of residence status, all of the relevant facts in each case must be considered, including residential ties with Canada and length of time, object, intention and continuity with respect to stays in Canada and abroad.

Please remember that the Income Tax Act frequently changes, and there are often new cases dealing with the issues set out above. While we try to keep our website as current as possible, please do not rely on the above without talking to one of the solicitors recommended in our Legal Insight section.

This information is not intended as legal advice. You should consult a lawyer for individual advice regarding your own situation.

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Associate Broker | Real Estate Sales

Metro Vancouver Resale Market Cools from Red

Keep Up to Date in Real Estate

$23 Million in Just Hours!

Real Estate Bucks Fears So Far

Prices Hold, but More Owners Want to Sell

by Jeff Nagel - Peace Arch News - May 08, 2008

BC Housing Forecast for 2008

Non-Resident Buyers & Sellers in British Columbia

Location

Contact

Associate Broker | Real Estate Sales

Metro Vancouver Resale Market Cools from Red

Keep Up to Date in Real Estate

$23 Million in Just Hours!

Real Estate Bucks Fears So Far

Prices Hold, but More Owners Want to Sellby Jeff Nagel - Peace Arch News - May 08, 2008

BC Housing Forecast for 2008

Non-Resident Buyers & Sellers in British Columbia

Location

Contact

Prices Hold, but More Owners Want to Sell

by Jeff Nagel - Peace Arch News - May 08, 2008