Newsletters

Update on Making Room in Vancouver Rezoning Initiative

Wed, 20 Mar 2019 23:44:16 GMT

In my News Bulletin Fall 2018, I outlined the City of Vancouver initiative to increase the supply & affordability of housing for both renters & buyers in most Vancouver’s residential neighbourhoods. Called “Making Room Housing Program” the City proposed dramatic re-zoning proposals to increase density & supply in most Vancouver’s residential neighbourhoods. These initiatives included:

Amendments to most RS (single family) areas to allow the construction of (strata titled) two family dwellings, two family dwellings with secondary suites, & Principal dwellings with lock-off units in a two family dwelling.
Re-zoning the current RT-7 & RT-8 districts in Kitsilano to RT-5 to allow for laneway houses, secondary suites within duplexes, & to permit infill dwellings on sites already containing a one family dwelling. This is for families, downsizing seniors & others who seek “right sized” housing that falls between single family houses & higher density dwellings in larger condo buildings.
Re-zoning the existing RT-10 & RT-10N zones to maintain the existing “small house/duplex” option while allowing additional laneway houses, secondary suites within duplexes, & additional infill options.

I applauded these initiatives as being bold and ambitious, directly tackling the problem of housing affordability & offering the prospect of neighbourhood revitalization as new housing stock replaced old, & as younger families added new blood & energy to whole blocks that currently house empty nesters & seniors. I also cautioned that the politics around this was still uncertain, awaiting outcome of the October 21 City elections.

The then City Council, in a very lengthy public hearing on Sept 19, 2018, approved the amendments to the RS zones, but deferred the proposals for the RT Zones to a later date, to be addressed by the incoming Council after the October election.

In mid-November, the New Council instructed staff to report back with wording of a bylaw to reverse the effects of those changes. On December 4, 2018, Council approved a staff recommendation to rescind the motion from the earlier Council re amendments to RT zones in Kitsilano & Kensington-Cedar Cottage. Kitsilano & Kensington-Cedar Cottage will be included in future planning for low-density neighbourhoods as part of the Making Room initiative.

On December 19, 2018, Council voted to allow duplex to remain as a use in RS zones as a trial housing option over the next year, with some modifications to the proposals approved on September 19, 2018.

It appears to be 2 steps forward, 1.5 steps back on this, although in fairness, the proposed changes are dramatic, & this Council will have to oversee & be accountable for the outcomes over their mandate. What remains to be seen if bureaucratic inertia & political micro-management will completely stifle any real changes. Fingers crossed.

Please consider Bob a resource if you have questions regarding Vancouver Real Estate. Please contact Bob Bracken at
604-220-2035 cell
604-263-2823 office
bob@bobbracken.com email

“feel free to bother me”

Printable PDF of this article - click here.

Speculation Tax - a Misnomer, Selective Cash Grab

Wed, 20 Mar 2019 23:34:00 GMT

By now, BC property owners should have received a mailed notice from the BC NDP Government requiring them to complete a Declaration (by March 31, 2019) to be exempt from a new, selective tax that targets their homes & property, which will, in thousands of cases, cause them to pay a tax of 0.5% of its assessed value. The declaration must be made each year going forward, & be completed by each & every registered property owner. Under the misnomer “Speculation Tax”, this “negative option billing” automatically charges the property owner unless they voluntarily report to the Government to gain the exemption. The NDP speculation & vacancy tax is intended to punish people who own homes left vacant for extended periods of time, including vacation properties, & 2nd homes that owners choose not to rent but to use for themselves, family members, guests, etc.

The tax targets mostly urban areas & regions where people might have 2nd homes & includes: Vancouver Island Capitol Regional District; Metro Vancouver Regional District (excluding Bowen Island & Lions Bay): City of Abbotsford, District of Mission, Cities of Kelowna & West Kelowna; City of Nanaimo, District of Lantzville. The NDP describe this tax as “...a key measure in tackling the housing crisis in major urban centres ... where home prices & rents have skyrocketed out of reach for many British Columbians.” Interesting that they have exempted areas like Squamish, Whistler & Pemberton which have very significant housing affordability issues for Buyers & renters alike. The Gulf Islands were originally included, but the backlash from those owners caused Minister Carol James to exempt them. While the tax is currently 0.5% of assessed value for BC residents, it will be 1% for other Canadian residents, & 2% for non-resident, foreign owners.

The NDP are selling the tax by saying it “only” affects 1% of BC residents. 1.6 million BC property owners are required to Declare, so 16,000 BC residents (approx. population of Esquimalt or Cranbrook, & greater than Port Moody) will be whacked by the tax. Those caught by the tax include i) Prior owners/residents of affected areas, now moved elsewhere but keep condo/house for business/work. ii) Retired Seniors, now keeping 2nd home, pied-a-terre. iii) Vacation homes owned by families, & Canadian residents of Prairies, Ontario. Owners of Belcarra beach cottages - Taxed thousands of $$; Owners of Gulf Island getaways - Exempt.

“Speculation Tax” is a misnomer as it doesn’t address any “quick profit” manoeuvre by the owners, as the vast majority of these properties are for personal use. Call this what it is - an NDP Tax, an expropriation of personal wealth disguised within a flawed, tyrannical policy to force private property owners to create market rentals out of private homes. “Speculation” & “Speculators” are trigger words used to exploit the politics of envy & poverty consciousness which resonates within the NDP constituency & the media. The claim that “only” 1% of BC residents (plus “Foreigners” of course) are affected is used to marginalize & downplay the effect that this will have on thousands of BC citizens.

The real rub is that this Tax will be ineffective in meeting its stated purpose to “Turn empty homes into good housing for people” and “Raise revenue that will directly support affordable housing”. Only a few owners will be forced into selling their property, & the inducement for increasing rentals through this policy will deliver very marginal benefit to BC’s rental pool. As for “Raising revenue” evidence now shows that these discriminatory tax policies has caused an economic chill, reducing investment & new housing starts, resulting in declines in overall tax revenue & a Net Loss to BC taxpayers far greater than any gained by their measures. More on this in a future article.

Back to the Declaration - you must complete it by March 31, but it is actually pretty easy. Call the # listed on the Notice 1-833-554-2323, give the clerk the Declaration Code & Letter ID printed on the Notice, your Property address, Social Insurance #, date of Birth, Email address, Telephone #. You will then receive a confirmation # to verify you have completed the Declaration. You can do this on line also at gov.bc.ca/spectax. All Done - til next year, when you must do it again. Now they have your information & that of all 1.6M BC property owners, in one big database, in one location. Easily accessible, just in case they want to use it again.

If you want to contact the Minister of Finance to give feedback on this, Carol James’s email is: FIN.Minister@gov.bc.ca

Please consider Bob a resource if you have questions regarding Vancouver Real Estate.Please contact Bob Bracken at
604-220-2035 cell
604-263-2823 office
bob@bobbracken.com email

“feel free to bother me”

Printable PDF of this article - click here.

Market Outlook Winter 2019

Wed, 20 Mar 2019 23:14:39 GMT

The Vancouver Real Estate market - especially for Detached Homes - went through a rough patch from late Summer 2018 to Winter 2019. The effect of restrictive new mortgage lending policies introduced by the Federal Government, combined with a sense of uncertainty and trepidation created by policies of both the Provincial NDP and Vancouver City Council intended to subdue Real Estate prices & activity, caused a definite market chill. During this period, total Detached home sales declined by approx 40% on the East Side & 25% on the West Side over the same period in 2017. During that same period, average sale prices showed a decline of approx 9% on the East Side & 12% on the West Side over Fall 2018 prices. The market also had that “sour” & depressed vibe, with a lot of negative (or at least indifferent) sentiment that is common in almost every “late Fall” market I have experienced over 33 years as a Vancouver Realtor. At the end of December 2018, sales #’s showed an overall decline from 2017 of approx 33% for both the East & West Side. West Side showed an overall decline of 9% in Average prices from 2018 but, interestingly, East Side Average Prices were unchanged from the prior year.

January & February 2019 started sluggish, with the # of Sales, $$ Volume & Average Prices down from 2018, & the media has solemnly reported record declines in local Real Estate market activity. However, every New Year seems to bring a “Brighter Sunrise” & a “New Day” to the Vancouver market, and 2019 appears to be following that trend. As February moved into March, there has been a different tone to the market with more activity, enthusiasm & urgency being expressed by Buyers & in Sales activity. We have seen quick sales turn-around, & multiple offer situations with Sale Prices over list price. Like in most years past, the New Spring Market often sees properties sell at above prices that caused them to be ignored at those same prices a few months earlier. To be sure, these recent sales are at the reduced prices that are the new reality today, but the demand for Vancouver Real Estate & homeownership remains constant, strong. While the current market faces challenges - the most obvious risk is the announcement of new, pejorative Real Estate policies from the City, Provincial, or Federal Governments - we can anticipate an adjusted, steady, “normalized” Real Estate market through to the Summer.

Please consider Bob a resource if you are looking to sell, buy, or have questions regarding any topic on Real Estate. Please contact Bob Bracken at
604-220-2035 cell
604-263-2823 office
bob@bobbracken.com email

“feel free to bother me”

Printable PDF of this article - click here.

CMHC VANCOUVER RENTAL MARKET REPORT FALL 2018

Wed, 19 Dec 2018 00:22:00 GMT

On November 28th, Canada Mortgage and Housing Corporation released its Fall Rental Housing Market Report for the Census Market Areas of Vancouver. CMHC releases these reports semi-annually, and the lengthy document contains a great deal of statistical information that should be of interest to landlords and tenants alike.

The report details a rental market which tightened further this year as strong employment growth, population growth and declining home sales (especially at entry level prices) contributed to even stronger demand for rental accommodation, which outpaced additions to supply. This has put upward pressure on rents, in spite of increased starts of purpose built rental housing.

As a result, the overall rent change (increase) in the CMA was 6.2% - well above the 2018 allowable increase of 4.0% as set by the Residential Tenancy Branch. This was driven by a strong job market, and even though employment growth increased by only 1.2% - down from previous years - an unemployment rate of 4.3% places upward pressure on housing and rental demand. However, improving economic performance in other Canadian provinces has resulted in lower net interprovincial migration into the Vancouver Census Market Area (CMA).

Highlights of the Fall 2018 Report include:

• Average rental increases through the Vancouver City neighbourhoods ranged from 3.6% (University E.L.) to 8.3% (English Bay), with a City average increase of 6.1%.

• Over the entire Vancouver CMA (from the North Shore, to Langley, Delta, Tri Cities/Pitt Meadows), Average Rents increased by 6.2% - well above the allowable 2.9% for existing tenants allowed in 2016 by the Residential Tenancy Branch.

• The overall Vacancy Rate in the total Vancouver CMA increased to 1.0% from 0.9% in 2017, and up from 0.7% in 2016.

• For “Investor Held” rental condos, the Vacancy Rate remained at 0.3%, while the average rent for condominiums rose to $1,855 - up from $1,758/mo in 2017.

• 793 new, purpose-built rental units were added to the rental condominium stock in 2018, compared to almost 1,850 units in 2017. Purpose built apartments now constitute about 5% of total rental units.

• Private Apartment Turnover Rates remained in a fairly tight range in Vancouver (between 8.4% & 16.2%), while being highest in Richmond (19.4%) & Delta (33.3%), with an average of 14.1% over the full Vancouver CMA.

Summary of Key analysis findings:

1. “The apartment vacancy rate remained low but edged higher as supply increased more than demand; meanwhile, rents continued to increase.” (Eric Bond, Principal, Market Analysis).

2. Strong demand kept vacancy rates lower for both primary rental apartments and rental condominium apartments.

3. The supply - demand dynamics have put upward pressure on rents in the region.

4. Financial barriers for entry-level homeownership is keeping some in rental housing.

Included in this Fall 2018 report are specific details on rental and vacancy rates by municipally and neighbourhood, unit type, and structure size. As well, there is data and charts on turnover and availability rate, and much more data than most people would need or want! CMHC offers to supply these and their other housing reports via email for free by subscription, as they are released at their website. Another great service by one the very valuable and useful Government organizations. It is gratifying to see our tax dollars put to such good use!

For the full CMHC VANCOUVER RENTAL MARKET REPORT FALL 2018 - click here.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

New Vancouver Empty Homes Tax, Will It Empty Your Pockets?

Fri, 16 Mar 2018 23:20:56 GMT

By now you likely thought we have been taxed enough? Did you also think that the City’s social engineering agenda had completely gone into Totalitarian State mode? As of Feb 2nd (now moved to March 5th) all Vancouver residential property homeowners must submit a property status declaration each year to determine if their property is subject to the new Vancouver Empty Homes Tax. The question everyone may be thinking is “how will this impact me?” If you own your own home (principle residences) or rent out any additional residences for at least 6 months of the year, you will not be required to pay the new Tax. Property owners with empty or vacant houses, condos and apartments will be subject to the new tax of 1% of the property’s assessed taxable value and a $250 non-declaration fine. For example, if your Vancouver residential residence is declared “empty” and has an assessed value of $1,500,000, you pay the new tax of $15,000; for $2,000,000 you pay the new tax of $20,000; for $3,000,000 you pay the new tax of $30,000 - and so on - Every Year!

The likelihood that this will have any significant impact on vacancy rates in Vancouver is nonsense, but take a moment to think through the larger implications of this bylaw. This means that those owning a 2nd home in Vancouver (because their work or business is in, say Whistler, Prince George, Nanaimo etc) will be subject to the tax. Those who have owned a Vancouver home for years but have outgrown it, moved to the burbs or out of country, but keep it as a pied a terre are taxed. Celebrities and regular folks owning a vacation home in the City are subject to the tax. Corporations and businesses which maintain residences here for visiting staff and clients are subject to the tax. Developers which may retain a unit from their projects going forward are subject to the tax. At least that is the theory. It will be interesting to see how vigilant the City auditors will be in enforcing this on say, Oprah Winfrey & other celebrities/important types, or Microsoft, Amazon, or other large corporations which necessarily maintain residences here. Oh, by the way, Vancouver City owned properties are exempt from the tax.

The City’s stated reason for this new tax is to help address Vancouver’s housing crisis. Net Revenues from the Empty Homes Tax are proposed to go towards affordable housing. In case anyone is going to try and dodge the tax and provide inaccurate information, the City will have a team out there doing random audits.
Where is the mandate for this by-law coming from? If the current City Council majority had made this policy a stated part of their last election pitch, would it have been accepted by City voters? In any case, it is what it is, and it is the new reality for property ownership in Vancouver.

The City of Vancouver website has pages of data on the New Vancouver Empty Homes Tax at this link:

http://vancouver.ca/home-property-development/empty-homes-tax-frequently-asked-questions.aspx

The Website has very detailed instructions regarding requirements for disclosure and compliance with this new bylaw and taxation structure. If you are a property owner in Vancouver, you MUST review it and become familiar with its rules, and your obligations under it.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please contact Bob Bracken at

604-220-2035 cell,
604-263-2823 office, or
bob@bobbracken.com email.

Printable PDF of this article - click here.

Market Outlook Winter 2018

Mon, 26 Feb 2018 23:46:13 GMT

The Vancouver Real Estate market - especially for Detached Homes - has gone through a bit of a roller coaster ride from Winter/Spring 2016 through to now - Winter/Spring 2018. 2016 1st half saw a very robust, hot market which was chilled by the BC Government introduction of the 15% Non Resident Tax. This caused the 2nd half 2016 into early 2017 to experience a significant increase in listing counts, accompanied by a drop in sales and market values. As 2017 proceeded through the Spring, however, sales and values picked up, and by Summer’s end they had regained, even surpassed, the 2016 value drop. As fall 2017 proceeded to Year end, however, we again saw sales numbers and market activity subside, possibly due to concerns over the newly elected NDP/Green government, and certainly in anticipation of the negative effect of the Federal Government’s new, restrictive mortgage lending rules. See article (New Mortgage Lending Rules). This new lending policy came into effect on January 1, 2018, and January sales reports from BCREA show a 10% decline in sales numbers compared to those of December 2017.

This is not surprising as the new lending rules reduce the amount of mortgage funds available to buyers by about 15% compared to the “pre-rule” funding levels. Given that conventional mortgage funding typically represents 65% to 80% of the purchase price of a property, this means that there could be a downward pressure of between 10% - 12% on recent prices simply due to the Buyers’ ability to pay. If nothing else, the rules will certainly influence - and probably already have influenced - the perception of market price levels.

More ominously, this new policy is the leading example of a political climate - at the National, Provincial and Municipal/City level - which is proving hostile to real estate purchases - both for home ownership as well as for investment purchases.

These are some of the challenges the Vancouver Real Estate market faces going forward. On the other hand, there remains a strong demand for Vancouver real estate and home ownership generally. In the past this is a force which has found ways to adjust to, and move past market changes and challenges and it will likely do so again. Our general economy remains strong, and we are going into the traditional Spring Market period in Vancouver, and sales have typically strengthened and advanced during this period through almost every market period over the past 30 odd years. I expect that buyers and sellers will find their way, now as before, to do deals which satisfy their own interests and desires. We Realtors are here to help that happen.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please contact Bob Bracken at 604-220-2035 cell, 604-263-2823 office, or bob@bobbracken.com email. Printable PDF of this article - click here.

New Mortgage Lending Rules

Mon, 26 Feb 2018 21:21:09 GMT

As of January 1, 2018, uninsured mortgage consumers (i.e. those with 20% or more downpayment) must now qualify for property financing using a new minimum qualifying rate. The rate will be the greater of the five-year benchmark rate published by the Bank of Canada OR the lender contractual mortgage rate +2.0%. Previously, the home buyer/owner qualified at the contract rate offered by the lender, so this new rule significantly impacts & reduces the amount of mortgage for which the home buyer/owner will be able to qualify. While the actual mortgage payment will still be paid at the contract (lower) rate, a higher calculation will be used for qualification purposes. This rule is applied not only to new purchases, but also to borrowers applying for refinancing on properties they already own. All mortgage lenders, except for Credit Unions and Private Lenders, are bound under this legislation.

This policy has attracted a fair amount of criticism from the Real Estate and mortgage lending industry who point out that imposing a stress test on all buyers will put a chill on the housing market at a time that it can ill afford it. The restrictions would affect about $15 Billion a year in new borrowing, and the tighter rules could disqualify as many as 12 per cent of borrowers. Many economists and real estate industry officials anticipated the rule change could curb home sales through the coming year. The Canadian Home Builders' Association has forecast the rule changes combined with other recent housing-sector policy reforms could reduce total house transactions by 10 per cent to 15% - a potential decline in resale-home transactions of 50,000 to 75,000 units a year, while housing starts could drop by 20,000 to 30,000 units. The cumulative amount of government intervention in the housing market means that many people will no longer be able to buy their first home or upsize when the kids come along.

This new policy comes along at a time when there is no evidence of elevated mortgage default, or risk of that in the Canadian economy. The irony of the policy is that it is driving a sizable segment of the buyer population to private lenders who, while being exempt from the legislation, charge much higher rates of interest, thereby creating a much higher risk of financial stress & potential mortgage default and foreclosure in the future. The new rules seem to be part of a larger agenda by various levels of government to curtail home purchasing by Canadians, and to drive down real estate values nationwide. The effect is to make more difficult - & even prevent - young people and new buyers from acquiring their 1st home, while curtailing or diminishing the equity & wealth of those who already own their homes and other property. In the last few months of 2017, and into the 1st few weeks of 2018, it appears that the new rules have caused a cooling and uncertainty into our local Real Estate market. As this is a real, continuing constraint on purchasing power, as opposed to the political perception of policies such as the 15% Non-Residents’ Tax, it will likely be more difficult for the market to shake off this trend to continue the robust activity of the past decade or so.

Is there anything you want to know regarding real estate, please contact Bob Bracken at 604-220-2035 cell, 604-263-2823 office, or bob@bobbracken.com email.

Printable PDF of this article - click here.

Market Outlook Fall 2017

Mon, 23 Oct 2017 21:56:24 GMT

The 1st half of 2017 in the Vancouver Residential market (at least for Detached and land based property) can justifiably be characterized as “The Comeback” - i.e. from the effects of the 2016 Non Resident Sale Tax introduced by Christy Clark’s Liberal government on July 29, 2016.

In the 1st couple months after that event, we saw a significant, downward movement in the Vancouver market. For the West Side, sales in Aug 2016 were down 44% from the # in July 2016, and down 59% from sales in Aug 2015. In Sept 2016, sales were also down 44% from July/16 and down 52% from Sept 2015. As well, Aug and Sept 2016 saw average prices drop 10-13% from end of July/16. On the East Side, end of August 2016 sales dropped 33% from end of July/16 sales, and 48% down from Aug 2015. For Sept/16, sales were down 47% from July/16, and down 57% from Sept 2015. Average prices dropped as much as 13% from the July/16 highs.

By the end of August 2017, the West Side still saw sales #’s down by 14% vs Aug 2016, but average price was up by 11%. For Sept 2017, sales #’s were up 30% from Sept 2016, and average prices up by 10%. On the East Side, # of sales were up by 46% at end of Aug 2017 over Aug 2016, and by 60% in Sept 2017 vs Sept 2016, while average prices had come up 5% to 8%. From what I have seen and sold, prices in 2017 appear to achieving new highs.

As per my prediction in both my Fall 2016 and Winter 2017 Newsletters, the Vancouver Real Estate Market did in 2017 what if has done almost every time there is some drama, setback or correction - i.e. pause, adjust, suck it up, and keep moving.

This is not to sound too bullish or cocky for the months ahead though. We are still in a somewhat cautious, if positive market and in Vancouver, that market can turn on a dime. Having experienced a blow from the political actions of a supposedly “business friendly” government, the change of regimes to the current more Left Wing government - widely perceived as much less business friendly - has many buyers (particularly investment buyers) on the sidelines with a “wait & see” approach. The fact that the BC’s new governing coalition has only a razor thin mandate, however, tempers both the expectations and fears of market sentiment. The outcome of the upcoming Liberal Party leadership race will be watched closely and may cause the market to pop or settle back a bit one way or another. It’s never my intention to make my reports a political analysis or commentary, but in BC and Vancouver, it is a fact that politics and real estate activity/values are joined at the hip.

Having said that, the long term outlook for Vancouver Real Estate remains bullish, with Bloomberg News describing the market here as “relentless” (see accompanying article), and at least one major Global Consulting firm, recently located here, considers Vancouver as “...a City in its adolescence”. To my clients & readers, I guess I say “Onward”!

Bloomberg News “Gets” Vancouver Real Estate Values

Mon, 23 Oct 2017 21:41:20 GMT

For decades - as many of my Clients and Readers know - I have been expounding (ad nauseam ?) my belief in the underpinnings of Vancouver Real Estate values and the fundamental economic conditions that predict an inexorable continuing increase in those values. This opinion has often flown in the face of the opinions and predictions from the Major (Toronto) Banks and major (Toronto) news media. Well! Now my views seem to be shared by no less an authority than Bloomberg News. A recent Bloomberg article by Natalie Obiko Pearson titled “Why Bother with Stocks in Vancouver’s Relentless Housing Market?” describes Vancouver as being “...among a clutch of Cosmopolitan, attractive cities around the globe where the appreciation in home prices is seemingly unstoppable”. The article points out that “Vancouver, consistently voted one of the world’s most livable cities, shows just how difficult it is for policy makers to control runaway prices.” The Bloomberg article goes on to describe the resiliency of values in the housing market, and describes the experiences (in his own words) of a local real estate investor. This is a good read (Click here to read it) and, for those Naysayers in Toronto, well they can chill ‘cause Big Brother New York City has Spoken lol.

Printable PDF of this article - click here.

As well, please consider Bob a resource if you have questions regarding Vancouver Real Estate Values. Contact Bob anytime to discuss this topic and Real Estate.

Bob Bracken
604-220-2035 cell
604-263-2823 office
bob@bobbracken.com email

“feel free to bother me!”

Market Outlook Winter 2017

Wed, 01 Mar 2017 22:09:56 GMT

As noted in my last Fall Newsletter, 2016 was a “Dr. Jekyll/Mr. Hyde” Real Estate Market in Vancouver. After a very robust 1st half, the market was blindsided by the 15% Non-Residents Tax, and struggled and limped a bit through the latter half of the year. This period was characterized by what I referred to as a “reset” - a euphemism for a softer market with much greater supply, sharply decreased sales, and discernibly lower prices. I predicted that the beginning of 2017 would be “interesting times” for our market.

We have started 2017, through the end of January, with much the same market conditions as the end of 2016. Listing inventory for Detached Homes on the West Side up about 13% from January 2016 levels, sales trending much lower, and average prices (for the month) down about 13% from the year prior. For the East Side, the listing counts are double in January. 2017 vs January 2016, sales are down at least 50%, and averages prices are off approx. 9%. Having said that, I expect an active market through the Spring of this year.

I have been quite busy with the types of investment and multifamily properties I deal with; my listings are selling, I get calls every day from Buyers and Agents looking for those types of listings and my own clients want to do business on both the buy and sell sides of Real Estate. Transactions require a bit more patience and creativity, Banks and Lenders are much more cautious, and most deals require a bit of arm wrestling to finalize. This is what I call a “normal” market - similar to what I have experienced for the majority of my 31 years as an agent in Vancouver - and I am quite comfortable and optimistic about Vancouver Real Estate going forward.

Anecdotally, there are many signs of a healthy market. In mid-January, a colleague listed an old Vancouver Special with a leaky roof and deck, in shabby condition, near 45th & Fraser at a (sharp) price of $1,289,000. He had 80 plus viewings over a weekend, received 23 (yes 23) offers, and sold it for $1,439,000. In early 2016 this was a routine transaction, in 2017 it is an encouraging sign of willingness by local buyers to act on value, and there are at least 22 of those Buyers still in the hunt.

For my Sellers I say “Price it Right and It Will Sell”. For my Buyers I say “If it Looks Good, Make Your Move or Someone Else Will”. The rest of the year is still a bit opaque. We have a Provincial election coming - always a nervous time for investors, buyers and people wanting to do business - and we have a Civic government that continues to find ever more goofy and objectionable policies to burden and cost current and future Vancouver property owners. There are some good news stories - the Provincial 1st Time Home Buyers Loan and a continuing very healthy local economy (see Bob’s newsletter article New BC 1st Time Home Buyers’ Loan Program).

It seems that the Vancouver Real Estate Market is doing what it has done almost every time there is some drama, or a setback - i.e. Pause, adjust, suck it up, and keep moving.

New BC 1st Time Home Buyers’ Loan Program

Wed, 01 Mar 2017 21:47:01 GMT

Finally, for a change, some positive news and policy initiative by Government to support property owners and buyers, and strengthen the Real Estate market locally and throughout BC.

Through the B.C. HOME Partnership Program, the Province of BC is helping first-time home buyers get into the home ownership market by contributing to the amount they have already saved for a down payment with a loan that is interest-free and payment-free for the first 5 years. The program will match the buyer’s downpayment up to 5% of the home’s price, to a maximum price of $750,000. The Government contribution will be registered as a 2nd mortgage on the property, with no interest payable for 5 years. After 5 years, buyers can either repay their loan or enter into monthly payments at current interest rates. Loans through the program become due after 25 years - the same length as most mortgages.

To qualify for the program, all individuals with a registered interest on title must reside in the home and:

Have been a Canadian citizen or permanent resident for at least five years •
Have resided in British Columbia for at least one year immediately preceding the date of application
Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time
Use the property as their principal residence for the first 5 years
Purchase a home at a price of $750,000 or less (excluding taxes and fees)
Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price
Have a combined, gross household income of all individuals on title not exceeding $150,000
Have saved a down payment amount at least equal to the loan amount for which the

buyer applied Buyers will need:

Proof of status in Canada and residency in British Columbia
Secondary identification (must include your photo)
Proof of income and tax filings
Insured first mortgage pre-approval

Some naysayers are raising alarm over what they consider the already unbalanced demand/supply conditions in the BC housing market. They further complain that this program is an attempt by the Government to prop up a real estate market poised for a sharp decline in 2017. Setting aside that the current real estate market decline (in the Lower Mainland) was predicated by prior Government intervention policy, these critics apparently believe that a decline in values affecting thousands of current home and property owners would be a good thing.

The Program has been praised however by developers, the real estate industry, mortgage brokers, and housing analysts who point out that it will help those who already qualify for mortgages but might lack sufficient downpayment, and that it can speed their entry into the housing market. It is also likely welcomed by many parents who appreciate not having to contribute large $$ to their adult children for home purchase!

This initiative is also positive as it helps 1st time buyers recently hampered because of new restrictive mortgage lending rules from the Federal Government. The Government Loan is fairly revenue neutral to taxpayers as it will eventually be repaid - either upon re-sale, or through payments after the initial 5 year period. The amount of risk to the Buyer, and the Government as 2nd mtg lender, is also quite manageable. Given a purchase at the maximum allowable value of $750,000, with a Buyer’s 5% downpayment of $37,500, the matching Home Buyer loan of $37,500 and a 1st mortgage of $675,000 at today’s 5 yr rate of 2.79% with a 25 yr amortization, the total debt owning after 5 years would be $574,600 (1st mtg balance) + $37,500 (Home Buyer mtg) = $609,600, or $102,900 less debt than when purchased.

Given the $750,000 maximum qualifying price point, this initiative is very significant help to buyers outside of the Lower Mainland’s pricey market, and should also provide a bit of stimulus to the market here in Vancouver and surrounding municipalities. Have to call this a “Win-Win” strategy by the Government.

Applications for the program will be accepted starting Jan 16, 2017, for purchases that will close on or after Feb 15 2017. For more information and how to take advantage of the Program, go to https://www.bchousing.org/housing-assistance/bc-home-partnership

CMHC VANCOUVER RENTAL MARKET REPORT FALL 2016

Sun, 11 Dec 2016 18:11:00 GMT

The report details a rental market which tightened further this year as strong employment growth, populations growth and rising home prices contributed to even stronger demand for rental accommodation, which outpaced additions to supply. This has put upward pressure on rents, in spite of record highs for starts of purpose built rental housing.

As a result, the overall rent change (increase) in the CMA was 6.4% - well over double the 2016 allowable increase of 2.9% as set by the Residential Tenancy Branch. This was driven by a strong job market which saw employment growth increase by 5.8% generally, and by over 12% in the 15-24 year age group. With more than 12,000 full time jobs and 7,000 part time jobs added, it’s easy to see why Vancouver and the Lower Mainland has experienced significant in-migration from the rest of Canada and abroad, and why upward pressure has been put on housing and rental demand.

Highlights of the Fall 2016 Report include:

Average rental increases through the Vancouver City neighbourhoods ranged from 4.0% (Marpole) to 10.7% (English Bay), with a City average increase of 7%.
Over the entire Vancouver CMA (from the North Shore, to Langley, Delta, Tri Cities/Pitt Meadows), Average Rents increased by 6.4% - more than double the allowable 2.9% for existing tenants allowed in 2016 by the Residential Tenancy Branch.
The overall Vacancy Rate in the total Vancouver CMA declined from 0.8% to 0.7% in 2016.
For “Investor Held” rental condos, the Vacancy Rate fell from 0.9% to 0.3%, while the average rent for condominiums rose to $1,625/mo.
Approximately 1,500 new, purpose-built rental units were added to the rental condominium stock in 2016, compared to almost 5,000 units in 2015, which likely contributed to the drop in vacancy rates for these units.
At the same time, Turnover Rates remained consistent with those seen over the past number of years, ranging from 10% - 30%, with an average of 15.8%, which means that rental units have been regularly available, in spite of the low rates.

Summary of Key analysis findings:

Strong employment growth, population growth and rising entry-level home prices support strong demand for rental properties.
Strong demand for rental accommodation outpaced new additions to the supply, pushing vacancy rates lower for both primary rental apartments and rental condominium apartments.
These supply - demand dynamics have put upward pressure on rents in the region.
Starts of purpose-built rentals have reached record highs.

Included in this Fall 2016 report are specific details on rental and vacancy rates by municipally and neighbourhood, unit type, and structure size. As well, there is data and charts on turnover and availability rate, and much more data than most people would need or want! CMHC offers to supply these and their other housing reports via email for free by subscription, as they are released at their website. Another great service by one the very valuable and useful Government organizations. It is gratifying to see our tax dollars put to such good use!

For the full CMHC VANCOUVER RENTAL MARKET REPORT FALL 2016 - click here.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

New 15% Non Resident Property Purchase Tax

Fri, 04 Nov 2016 22:33:14 GMT

On July 28, the BC Liberal Government passed Bill 28 - the new Property Transfer tax - adding 15% to the price of all residential home and multifamily property purchases closing after August 2. The tax applies only to purchases by non residents of Canada (Asia, Europe, US etc), and does not apply to Commercial, Industrial, Farm etc properties. It only applies to properties in the Greater Vancouver Regional District, and does not include properties outside of that District, including Squamish, Whistler, Mission, Abbottsford, and all points North in the Province. Tax went into effect on August 2 and applied to all transactions closing after that date, even if the agreements were unconditionally in place months prior to that date - ie the tax is being applied retroactively. Many sales contracts were caught by this, and many Buyers were trapped into unforeseen financial stress by the Gov’t action.

To put this in context, consider a non-resident buyer of a $500,000 condo who now needs an additional $75,000 to register their purchase at BC Land Titles. For a purchase of $1,500,000, the amount is $225,000 and for a $3,000,000 sale, the number is $450,000 and so on. These sums are all cash, were totally unanticipated, and represent approx triple the amount currently held as deposits to secure the sales. Not surprisingly, many of those buyers have walked from their deal and fail to complete - who can blame them? The extra $$ they must pay buys them nothing and it is likely that values will decline, not advance because of the policy, making them double losers. The result? A daisy chain of further failed transactions as the Sellers of these homes are left high and dry without the proceeds of sale that they need to make their own purchase. These secondary casualties are almost all local Canadian citizens.

Premier Clark’s timing and action was puzzling. Perhaps she took her cue from the Republican Convention and Donald Trump’s success in appealing to public fear and xenophobia. While stopping short of calling non-resident buyers “rapists and murderers” Clark has definitely erected a wall around the Lower Mainland and the clear message to non-resident buyers and future citizens is; “You Are Not Welcome Here”. This includes not only the highly visible “Rich Asian Buyer” but also non resident students, University employees, Microsoft, Amazon, film and tech companies, and foreign owners of local businesses - i.e. - many who contribute to the fabric of our communities and the economy. The decision by Clark to introduce housing policies modelled on those of Asian dictatorships was knee-jerk overkill - which they would have realized had they taken time to consult with industry. The Vancouver housing market was already showing clear signs of slowing into a Buyers’ Market by early Summer (see Bob’s article Market 2016 Summary and Fall Outlook).

Choosing to diminish the wealth and equity of Lower Mainland home and property owners in the face of perceived political vulnerability is just politics. The decision by Clark to do this retroactively, with all of the financial damage and grief caused to ordinary citizens and families however, was unnecessary and dishonorable. Having said that, the Vancouver market is very strong with a solid underpinning of high equity ownership. It is also favoured by very strong economic fundamentals - a very limited (even diminishing) supply of land based residential property, a strong economy and 1st class social infrastructure (jobs, education, health care etc.) in one of the most beautiful natural environments and climate in the world. This all contributes to a long term, steady and increasing demand from international and local home buyers and investors. Our market was due for a correction, which is happening now (and which has happened in the past), and it will adjust and stabilize before continuing to grow.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please contact Bob Bracken at 604-220-2035 cell, 604-263-2823 office, or bob@bobbracken.com email.

Printable PDF of this article - click here.

Market 2016 Summary and Fall Outlook

Thu, 03 Nov 2016 22:43:00 GMT

The Vancouver home sales market was extremely active - hot - for the 1st half 2016 and it was constantly in the News and top of mind for Buyers and Sellers throughout the City, and beyond. After the July 25 announcement on the 15% Non-Resident Buyer Tax by the BC Government, the market has also been top of mind and constantly in the news - for the opposite reason. 2016 is shaping up to be the Dr. Jekyll/Mr. Hyde of Vancouver Real Estate markets, and looks unlike anything we have seen for a long time, maybe ever. The records of Sale and Listing activity (for Detached homes) over the past 6 months tells the story. By applying the crude, but useful “Rule of Thumb” analysis whereby the # of Active Listings at month’s end divided by the # of Sales = a “Number of Months’ Supply” we can gauge the direction and state of the market. Generally 6 months supply is considered a “balanced market”: less than 6 months supply indicates a Sellers’ market, more than 6 months supply is trending towards a Buyers’ market.

Vancouver East: March 2016 saw 207 sales from a total of 361 listings, or 1.7 Months’ supply - an intensely strong Seller’s market, with very similar numbers to those of March 2015. End of June saw 163 sales from 522 listings - a still strong 3.2 months supply, but compared to June 2015, sales were down by 26% and listings were up by 56%. July had 117 sales - down 21% from 2015 & finished with 572 listings - up 61% from July 2015. The market was clearly softening, and trending in favour of Buyers. On July 25th, the BC Government announced the 15% Foreign Buyers tax.

Vancouver West: March had 219 sales, comparable to 2015, but from a total of 541 listings compared to 739 in March 2015, so a stronger market at the beginning of 2016. June 2016 had 152 sales on 591 listings compared to 236 sales on 630 listings in 2015, so the market was showing definite signs of slowdown. At the end of July, there had been 108 sales on 607 listings - 5.6 months’ supply, or a Balanced market. This, again, is the time at which the BC Government introduced the 15% Foreign Buyers’ tax.

In the midst of this softening market, the tax caused real estate sales to come to a virtual standstill in Vancouver. Despite foreign buyers’ participation being minor in most sectors of the Vancouver Market, the tax caused a drop in confidence by local Buyers. Media headlines screaming “80% Drop In Vancouver Home Sales” indicates the caution and confusion. BUT: “Where does the Market go next? What other surprises does Christy Clark have up her sleeve? Will prices collapse?” have been the questions, and Buyers have been taking a wait and see approach.

This has resulted in a significant drop in sales, while inventories have roughly doubled - at least in the Detached home sector. The end of October found sales to be 50% of 2015’s in Vancouver West, while # of listings remained the same. In East Vancouver, sales were less than 50% of 2015 levels, while the # of listings was up 90%. This is showing up in the “Average Price/Unit” numbers which are declining back towards 2015 levels. The “# of Month Supply” ratios have flipped from early in the year, and now indicate a strong Buyers market.

At the end of October, things are settling down somewhat as Buyers continue to look, and offers continue to be made - but more slowly, and at lower prices. Vancouver residents are very astute, and have a level of confidence in long term values here. The Vancouver fundamentals have not changed by the tax: There is still a very limited supply of land, still an affluent ownership base with strong equity, still a strong economy with favourable interest rates, and still a City perceived as one of the most desirable and livable in the world. The Vancouver Real Estate market is adjusting. If prices pull back, that was foreseeable & inevitable, as they had advanced far - and too rapidly. A re-set is healthy for any market, and while things may be a bit slower now, confidence and optimism is reasonable, moving forward. The rest of this year, and into the beginning of 2017 will be “interesting times for Vancouver Real Estate!”

Printable PDF of this article - click here.

CMHC VANCOUVER RENTAL MARKET REPORT FALL 2015

Mon, 21 Dec 2015 21:18:16 GMT

On December 16th, Canada Mortgage and Housing Corporation released its Fall Rental Housing Market Report for the Census Market Areas of Vancouver and Abbotsford-Mission. CMHC releases these reports semi-annually, and while the lengthy document contains a great deal of statistical information that is likely not of interest to everyone, the report contains important information regarding the state and trends of the local rental market that should be of interest to landlords and tenants alike.

The report details a rental market which tightened further this year as purpose built apartment vacancy rates in the overall Vancouver Census Metropolitan Area (CMA) declined to 0.8 per cent from 1.0 per cent in 2014 - the first time since 2008 that the overall vacancy rate in the CMA has fallen below one per cent. This is in spite of an increase in construction of new, purpose built rental units as over 834 new units were added, marking the 3rd consecutive year that the # of new rental units have increased in the area.

As well, the overall rent change (increase) in the CMA was 3.9 per cent, considerably higher than the allowable increase of 2.5 per cent in 2015 as set by the Residential Tenancy Branch. This was driven by rental demand as landlords in all areas were able to charge higher rents upon turnover of suites in their buildings.

Highlights of the Fall 2015 Report include:

The Vacancy Rate in Vancouver City edged up slightly to 0.6% from 0.5% in 2014, although average rental increases through the Vancouver City neighbourhoods ranged from 5.5% to 6.4% - well over double the mandated increases set by the RTB.
Average rents per every type of unit in Vancouver City showed increases, with the lowest average rents occurring in Marpole, while the highest average rents are recorded in Westside/Kerrisdale, & Downtown.
Vacancy Rates for apartment condominium units was at 0.9% - higher than for purpose built apartment units, largely due to a very large increase in the number of condo rental units. There were over 4,975 apartment condos added to the stock in 2015 vs only 1,499 new units added in 2014. This is the largest addition since 2009, and is a result of newly completed condo projects (from the projects started in the past 2 years) coming on to the market. Even though these new condos rent at a premium over the purpose built stock, the increase in new supply causes the average rent premium to decline by over 60%.

The Major Factors contributing to Current Rental Market conditions, according to CMHC, include:

High In-Migration: Almost 16,000 new immigrants came to BC in 2015 and there was strong interprovincial migration with approximately 6,600 persons moving to BC from other Provinces. Approximately 75% of all people coming to BC will settle in the Lower Mainland.
The population of people aged 20-34 (the strongest renter demographic) grew by over 9,400 (1.7%).
Rising employment levels in full and part time jobs, partly a result of the decline of the Canadian $ plus the strengthening US economy has increased business opportunities, increase tourism, & caused an increased in local retail spending due to the decline of cross border shopping.
Higher prices, resulting from higher demand for home ownership which may delay movement to home ownership, and leave some buyers in the rental market.

Included in this Fall 2015 report are specific details on rental and vacancy rates by municipally and neighbourhood, unit type, and structure size. CMHC offers to supply these and their other housing reports via email for free by subscription, as they are released at their website. Another great service by one the very valuable and useful Government organizations. It is gratifying to see our tax dollars put to such good use!
For the full CMHC VANCOUVER MARKET REPORT FALL 2015 - click here.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

FALL Vancouver Sales Summary and Early 2016 Market Forecast

Mon, 30 Nov 2015 20:34:02 GMT

The Vancouver home sales market has been extremely active - even hot - for most of 2015, and it has been in the News & top of mind for Buyers and Sellers throughout the City, and beyond. We are well into the 4th Quarter of the year, so here is a summary of the Fall listings and sales activity to date, with a comparison/perspective from 2014, along with a forecast for the start of 2016. If you find the stats & numbers a bit dry, you may be interested in what they reveal and foretell. The statistics here are from the Single Family Detached home category, but they apply equally well to the Residential Multifamily or Rental property category.

Vancouver West: October 2015 saw a total of 165 Sales out of a total of 633 Active Listings. This compares with 157 Sales on 823 Listings for Oct 2014. Of the 2015 Sales, 25 were under $2 million, 59 were between $2M - $3M; 48 were from $3M - $4M; 17 from $4M- $5M; and 16 sold above $5M. The highest number of sales was in Dunbar (27) and Kitsilano (22). Average Sale prices were up approximately 20% from the same period in 2014. At the end of October 2015, there were 599 Active Listings - 22% lower than end of October 2014.

Vancouver East: October 2015 experienced 149 Sales from a total of 383 Active Listings. This is down a bit from the 164 Sales on 466 Listings for Oct 2014. Of the 2015 Sales, 4 were under $900,000; 109 were between $900,000 - $1.5M; 34 were from $1.5M - $2.0M; and 2 homes sold above $2M. The highest number of sales was in the Renfrew (23) and Knight (22) neighbourhoods. Average prices were up approximately 23% from the same period in 2014. At the end of October, there were 355 Active Listings - down 14% from end of October 2014.

The Active Listing inventory is trending downwards as occurs virtually every year at this time. For Vancouver West, the end of Sept/15 had 666 detached listings available. By end of November, that # is likely to be approx. 510; projecting through December, 2016 could begin with fewer than 420 homes for sale on the West Side. For Vancouver East, the end of Sept/15 had 407 detached listings available. By end of November, that is likely to be approx. 310 and looking past December, 2016 could begin with fewer than 230 homes for sale in Vancouver East.

To summarize: For 2015 to date, both Vancouver West Side and Vancouver East Side have experienced slightly lower (5-10%) numbers of properties listed for sale, with slightly higher (8-12%) number of properties sold. This differential, along with other economic factors such as continued low interest rates, a stable political and economic environment, and a highly Real Estate conscious and optimistic population, have resulted in property values increasing by about 20%. For those buying this year, and given that the majority of buyers will finance their purchase with a 25% - 35% downpayment, some folks have benefited from an equity investment growth of 50% to 100%. Not too shabby.

Looking ahead, 2016 appears to be starting in a similar fashion as 2015; lower inventory, or supply; steady or similar # of buyers (demand), with a resulting, continued upward pressure on values. More of the same, in other words.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

2015 Vancouver Commercial and Real Estate Forecast.

Wed, 21 Jan 2015 22:46:00 GMT

2014 has been a very strong year for Real Estate activity and sales for both the Commercial and Residential sectors in the Greater Vancouver market, and throughout B.C. generally. Furthermore, this strength is predicted to extend through 2015 and beyond.

Commercial Real Estate strength is measured by the BC Real Estate Association’s “Commercial Leading Indicator” (CLI) which was designed to forecast changes in broad Commercial Real Estate activity.

The CLI does this by recording and measuring changes in economic variables and changes in employment and other business cycle indicators, as well as monitoring indicators from the financial markets that could signal turning points in the Commercial Real Estate market. The BC economy grew approximately 2.3% in 2014, led by key Commercial Real Estate sectors such as retail and manufacturing. The latest CLI rose 1.4 index points to a record high of 118.4, surpassing the previous high of 117.1 set in the second quarter of 2014 & has now advanced for seven consecutive quarters. That trend signals significant strength in the economic environment underlying the Commercial Real Estate market, and points to growth in investment, leasing & other Commercial Real Estate activity two to four quarters ahead. Given the current trend, growth in the Commercial Real Estate market is expected to continue through the first half of 2015.

Residential Real Estate also had an extremely positive 2014, and that trend is expected to continue, according to both BCREA and CMHC.

BCREA Chief Economist Cameron Muir reports that “Consumer demand has ratcheted up in 2014 and is expected to remain at a more elevated level through 2015. While historically low mortgage rates support demand, the housing market is also being underpinned by a more robust economy and associated job growth, strong net migration and consumer confidence." BC Multiple Listing Service® (MLS®) residential sales increased 15.1% to 83,900 units in 2014, and are forecast to edge up a further 1.2% to 84,900 units in 2015. The average MLS® residential price for the province increased 6% to a record $569,800 in 2014 and is forecast to increase a further 1.2% to $574,300 in 2015. MLS sales records and data indicates that foreign buyers make up approximately 3% of home sales in any given month.

So the robust sales figures are indicative of a very strong demand from domestic, local buyers. The overall message from Canada Mortgage and Housing Corporation’s 2014 Housing Outlook Conference held November 4th 2014 in Vancouver, echoed the BCREA’s forecast, and predicted that the real estate market in British Columbia, and specifically in the Lower Mainland, will remain strong and steady into 2016.

CMHC cited several reasons for this:

Canada’s economy will continue to improve, and attract immigrants and new residents to BC.
No interest or mortgage rate increases are expected until late in 2015.
Shifting demographics will see more senior households and single owners, leading to more renovation activity (and jobs), keep detached resales buoyant, and keep the demand for new condos and townhomes high.

Housing Affordability - Steady Supply
Keynote speaker Bob Rennie weighed in on the affordability issue. When you factor out the top 20% of sales, he said, average prices become much more reasonable, so that, the average price of a detached home drops from the $1M range to around $670,000, while condos drop to $316,000. He also stressed the need to assess zoning policies to create more opportunities for density. Today’s buyers are attracted to ‘energy centers’ where amenities like shopping, transit and schools are easily accessible. Keeping this supply steady while an estimate 40,000 new residents move to BC each year is key to keeping affordability in check. “Because without supply, there’s no cure for affordability,” said Rennie.

All of this is good news for property owners and investors - both current and future - as the Lower Mainland Real Estate will continue to offer opportunities for Buyers and Sellers alike. Steady and increasing demand for housing and commercial enterprises alike will spur development and encourage zoning authorities to consider innovation and expansion of housing options.

This is already happening in Vancouver where new, medium to high density market rental housing developments are being approved and built along transportation corridors, in areas that were formerly single family or duplex zoned. There is also some hope and push from both the development industry and from affected neighbourhoods to also see more encouragement of ground oriented townhouse style developments to meet the space and affordability needs of families.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

Immigration Trends and the Future of Vancouver Real Estate.

Thu, 18 Dec 2014 01:32:00 GMT

Real Estate values are driven by supply & demand. The most potent drivers of real estate demand are population growth & economic growth. Vancouver & the Lower Mainland, with its limited, even fixed, supply of land, responds to these forces directly & quickly.

In 21st century Canada, population growth & economic growth are inextricably linked to immigration trends & legislation, particularly in B.C. & the Lower Mainland. At a recent REBGV seminar, Richard & Heather Bell of Bell Alliance Lawyers, a Vancouver firm specializing in Real Estate, Business & Immigration Law, presented a detailed & encouraging outline of the latest Immigration legislation, & how that might affect Real Estate in Vancouver.

Canada’s immigration profile has changed a great deal over a generation. In 1970, the top 5 Immigration Source countries were: #1 United Kingdom, #2 USA, #3 West Indies, #4 Italy & #5 Portugal. In 2012, the top 5 Immigration Source countries were #1 China, #2 Philippines, #3 India, #4 Pakistan, & #5 USA. The Philippines & Pakistan were not in 1970’s top 10, & China & India rose from #9 & #8 respectively. Of these, a larger % of immigrants are going West to B.C. & Alberta, & the immigration demographic is now 60% Economic Class & 25% Family Class vs. 35% Economic Class & 45% Family Class 30 years ago. Over 250,000 immigrants become permanent residents & over 150,000 foreign workers come to Canada every year. Currently, over 20% of Canada’s population is foreign born, & that is to increase to 28% by 2031.

Canada’s immigration policies & programs have changed more in the past 5 years than in the previous 20 years. The intent of these changes is aimed at ensuring that new immigrants will enhance the economy & future of the country by meeting specified business & labour/skills requirements, & require that they are also able to function & integrate into Canada’s socio-economic fabric upon arrival.

The new Bill C-24 Citizenship Act has become law, & this Act strengthens Canadian citizenship by making it more difficult to acquire. The new law lengthens the residency requirement (requiring physical residency 4 out 6 years), & asks for a statement of intent from would-be Canadians to make sure they actually plan to live in this country. Adult applicants must file Canadian income tax to be eligible, & applicants 14-64 years must complete language & knowledge tests.

Many of the prior economic & general immigration policies have been changed, or closed, & new programs have been announced or implemented. The “Old” Investor & Entrepreneur program has been terminated. Speculation that this would dampen property markets has subsided, as it appears that a new Immigrant Investor Pilot Program is imminent. The new program may stipulate investment amounts in the $2-$5 million range, & require that the investments be “active” & at risk. The focus of this program encourages venture capital enterprises, & may resemble programs in the US & Australia.

A new “Express Entry” Program is coming in 2015, making the Economic Class Application into a 2 step process: 1. Applications go into a pool with other candidates, & 2. The Federal Government invites highest ranked applicants - those judged to have best chance of success, & those with valid job offers - to apply for permanent residency. Those eligible under Canadian Experience Class, Federal Skilled Workers or Federal Skilled Trades will qualify for this program, as will those nominated under the BC Provincial Nominee Program. This program promises shorter processing times, approximately 6 months & favours applicants who are young, educated, experienced & who have language proficiency.

For Business candidates, the Express Entry and BC Provincial Nominee Programs take approximately 2 years for approvals, so these applicants may be better served under the new Investor Pilot Program. OR, they can take advantage of the Intra-Company Transferee Startup Program which allows foreign businesses starting a branch subsidiary in Canada to transfer its key employees (executives, senior management, specialized knowledge workers) to set up the Canadian business. Once in Canada, these companies are expected to open offices, establish the working business, & create jobs. This program offers faster processing times, & the approved individuals are provided a work permit for 1 year (with possible extension) & options for permanent residency once in Canada & operating the business.

In spite of current emphasis on attracting & admitting high functioning & economically qualified immigrants, Canada’s immigration policy is not all business, & there are over 60 different ways that people can apply to come to Canada. This is a good thing, as Government figures show that net growth in Canada is only coming from immigration.

The impact of these policies are very significant to BC. Over the next 10 years, the Province will have one million job openings, with 1/3 of these openings expected to be filled by immigrants. Some of this will come from an increase of Business immigrants providing active investment in BC’s economy, & some will come from the addition of immigrants with technical and trade skills, international graduates, and young workers - all who will arrive job ready, with English language proficiency. For Real Estate, the impact will be pronounced, as the immigrant demographic has a strong tendency to purchase homes and properties - often within a very short time after arriving in the country. This combination of population increase with employment & investment growth will have a profound multiplier effect on local markets, as it leverages & expands residential & commercial/industrial development. This in turn will raise the level of economic activity across all sectors of local economies, & be truly an engine of prosperity. Lower Mainland & Vancouver real estate owners & investors will continue to benefit & profit from the resulting demand, growth, & innovation.

If you are looking to sell or buy real estate or wish to discuss further any topic on Real Estate, please call Bob Bracken at 604-220-2035 or 604-263-2823.

Printable PDF of this article - click here.

So Real Estate Is A Great Investment - Why Vancouver Real Estate?

Fri, 24 Jan 2014 00:01:00 GMT

Can prices go any higher!? Every year people ask this question about real estate in the Vancouver area. For local investors, this is a critical question as investment returns here rely heavily on capital appreciation of the property. Before predicting the future investment potential of Vancouver real estate, however, it is useful to consider what has happened here over the past 5 decades. I first did this analysis in 1995 - almost 20 years ago - and when I revisited it in 2010, I was struck by how consistenly increases in Vancouver Real Estate values had continued over time.

The Real Estate Board of Greater Vancouver has kept a record of average home sales prices (of MLS sales) going back to 1960. These average sales figures are calculated by dividing total dollar volume of all yearly sales by the total number of sales in that year. The figures don’t show a value history for any single piece of real estate, but are great as a measure of the trend in values for all properties during these years. From this broad analysis in 2010, a number of interesting facts emerged:

The average price of a Vancouver home in 1960 was $13,105.
In 1994, the average price of a Vancouver detached home was $303,535.
This change, from $13,105 to $303,535, represented an increase of 9.7%, compounded, each and every year from 1960-1994 (34 years). Impressive!
In 2010, we reviewed this analysis to see if this value increases rate had been sustained through 50 years.
Through the end of September 2010, the sales statistics for detached homes in Vancouver were:

→ Vancouver East: 1286 sales: Total $$ = $ 990,591,739

→ Vancouver West: 1329 sales: Total $$ = $ 2,577,824,750

→ Average Price 2010: $3,568,416,504/2615 sales = $1,364,595

Compounded % change 1994 - 2010 (16 years) = 9.8%; Compounded % change 1960 - 2010 (50 years) = 9.7%.
When leverage is considered, properties which were bought with a 25% - 35% downpayment, have given Vancouver owners an average rate of return on initial investment of 28% - 38%, compounded, for over 50 years!
This look back demonstrates what most of us already know, namely that the Vancouver area has been a fantastic place to build wealth in Real Estate over the past 5 decades. For those of us suffering from the “coulda, shoulda, woulda’s”, do we still have the same chance to do this, or have we missed the boat?

What Economic Fundamentals Are At Work To Sustain Value Growth?

A City with a Global Reputation for Live-ability benefitting from: Long Term, Bright Economic Outlook; Steady Population Growth; Limited Supply of Land, and Land Based Housing: etc, etc.
This positive outlook makes sense - until you watch the evening news. So, don’t watch the evening news!

The Major Determinants of Wealth Building For Vancouver Property Owners Has Been the Decision to Buy, and the Ability to Hold.

Is This Simple Strategy Still Workable? See Case Study: Vancouver Real Estate, Can Prices Go Any Higher!? that illustrates the above financial, economic model. The Case Study was originally done in Oct 2010, with an update as of Dec 2013.

Printable PDF of this article - click here.

Real Estate Investment Is For Everyone!

Fri, 21 Jun 2013 16:31:00 GMT

The Vancouver area Real Estate market has taken a significant hit lately, and the bloom is certainly off the rose. This is partly a result of the challenges now facing all world finance markets, and also due to a “natural” turning of the local demand and valuation cycle. A bit of perspective should be applied at this time however, and the changing market should be view in the light of potential opportunity rather than inevitable disaster. A decision to invest in real estate (with appropriate caution) is still a good decision for those able and willing to permit real estate to work over the longer term. History supports this view and real estate has provided tremendous results for a great variety of buyers including 1st time homeowners, non-profit societies, small and large investors, business owners and institutions. Real estate provides housing for families, facilities to provide services for business, plant and equipment for industries and great returns for small and large investors - and owners - alike!

As an investment, Real Estate is Unique in that it offers a range of features and benefits that don’t exist, together, in any other type of investment. These include:

Leverage: Even though real estate is a “big ticket” expenditure, properties can be bought with a partial small, and even no downpayment or cash investment. This allows a person to control a large asset - with the great potential to create wealth - by using a limited investment. Leverage, of course, can be very risky, unless there is sufficient ....

Cash Flow: Land and buildings can provide rental income to cover expenses and provide a return of, and on, investment for investors. Homeowners and other users of real estate provide their own “cash flow” by paying mortgages or loans instead of rent. In most cases, Owner’s equity increases as mortgages are paid down and as the property experiences ....

Capital Appreciation and Compound Growth: As populations grow and communities experience cycles of prosperity, values move upward. This growth compounds on the value of real estate and, over time, dramatic returns occur - especially if leverage has been used. Other factors also cause values to increase, including changes in use and the ability of the owner to add value by exercising ....

Control: Unlike most other investment types, real estate allows the owner to contribute to the value of the investment. This can be done by determining how and by whom the property is used, how it is maintained and how it is improved. A “hands on” owner is often able to “bonus” his investment return, while reaping the benefits of ....

Tax Shelter: The increase in equity and wealth from principal residences is non-taxable. Proceeds of value increases for investment properties are taxed only on sale, and cash flows are taxable only when in excess of expenses, including financing costs. Negative cash flows can be offset against other income (both personal and investment), so the Revenue Canada effectively subsidizes leverage and acquisition of other investments. Additional investments in real estate are mandated by constancy of ....

Demand and Long Term Performance: Real Estate is a simple (although not always “easy”) business, with a continuing and universal demand for its use. People need a place to live, work, eat, buy goods and services, educate and entertain themselves, even locate when they pass on! And this is another unique feature of Real Estate its ....

Flexibility of Use: Real Estate is re-cyclable! Industrial buildings become apartments or retail outlets, houses become sites for newer houses or other new developments, investment properties become homes (and vice versa) for owners and their families. The adaptability of real estate allows it to be a truly long term investment. And all through the ownership period, real estate is something you can ....

See and Touch: Real estate is there. Unlike most other investments, real estate is not an abstraction, not something written on a piece of paper. In a time when wealth and cash are merely electrons in a database, real estate is still something you can walk around on, bump into and show to the world.

Can you think of another investment that offers all of these features and benefits in one package? I can’t so that is why I have sold real estate since 1986 - I feel very good about dealing and working with the best!

Bob Bracken

New Housing Policies May Have Dramatic Benefits

Tue, 30 Apr 2013 22:19:00 GMT

Vancouver Housing Affordability is like the weather - everybody complains about it, but nobody does anything about it! The City of Vancouver now appears to be serious about promoting and facilitating housing affordability, especially by encouraging construction of hundreds, even thousands of units of new, for "profit," market rental housing units. The Mayor’s Task Force on Housing Affordability Final Report (Nov 19/12) and the City’s Rental 100 Secured Market Rental Policy (May 15/12) propose intriguing policy guidelines and action plans offering tangible incentives to vastly increase the feasibility of private, profitable, “rental only” development projects. Many of these opportunities will allow significantly increased densities in neighbourhoods currently single family and duplex zoned, as well as reducing the parking requirements, and eliminating Development Levies for qualifying projects. The City also promises to streamline and cut much red tape in the application process, and to take steps to provide more “certainty” and “timeliness” as to the outcome/approval for developers’ applications. Here are some of the major features of these initiatives:

Rental 100: This program offers incentives for projects which create secured market rental housing, including:

Reduced Parking for qualifying developments, the Parking Bylaw reduces parking standards & allows substitution of car share services.

DCL Waivers where 100% of the residential development is rental, Development Cost Levies can be eliminated – a saving of up to $12.50/sq.ft.

Additional Floor Area - a dramatic benefit allowing re-zoning for qualifying properties. In Commercial Areas (“C” Zonings) possible increases to up to 6 stories. In RT Zonings along busy streets, possible increases from current .60 & .75 FSR up to RM-4N levels of 1.45 FSR. For example; a RT-5 property on a 50’x125’ lot, currently redevelop-able to 3-4 new strata units with total floor area of 4685 sq.ft. might achieve a floor area of 9,060 sq.ft. & 8–12 rental units under the revised rules - and the developer might also save $113,000 in waived DCL fees. For qualifying C-2 properties, the numbers are even more dramatic.

Affordable Housing Task Force: In addition to adopting many incentives of the Rental 100 program, including parking relaxations and DCL waivers, the Task Force also proposed the following: Expand the Laneway House Program: to include all Single Family zones, and to consider allowing Laneway Houses in Duplex and RT zones.

More Secondary Suites: Require all new single family houses to be built “suite ready”, and to allow secondary suites in ground oriented strata titled duplexes, town houses and row houses.

Increased Density in Residential Areas: For 100% rental developments located within 1.5 blocks of major arterials, the City will consider rezoning to allow multi-unit Row and Stacked Townhouses etc. of up to 3.5 stories. For properties (including residential single family) fronting on busy streets which are well served by transit, and within 500 meters of neighbourhood & local shopping centers, the City may allow rezoning allow mid-rise developments of up to 6 stories. These projects will dramatically change and re-vitalize their neighbourhoods as well.

The New Affordability Proposals also include policies to promote non-profit & co-housing projects, renew and replace existing housing co-operatives, and utilize land currently owned by the City to create innovative, affordable housing options. For many owners, the new incentives could increase the value of their properties and allow them to reap the benefits of Vancouver’s forward thinking policies-a genuine win-win.

What Lies Benath? A Toxic Headache . . .

Sun, 31 Mar 2013 22:13:00 GMT

Environmental concerns affect every area of our lives.

This is ever more evident in Real Estate, especially with Underground (Furnace Oil) Storage Tanks - also known as USTs.

There are thousands of old buried oil tanks in the Lower Mainland, and the B.C. Fire Code requires the removal of any buried tanks that have been inactive for more than 2 years. Each municipality has its own requirements, and checking with the local fire department will confirm how the regulations are applied. More importantly for owners, buyers, and sellers of real estate, however, is the fact that UST’s are considered as latent defects, and most banks & lenders may refuse to lend or advance funds on a property containing a UST – at least until the tank is removed with all of the permits and paperwork.

UST’s may not be obvious or visible – especially with older buildings - but they are usually easy to detect. Unless they have been contaminating the surrounding soils, they are relatively inexpensive to remove - costs for removal can be as low as $2,500. Once the tank is removed and the site declared free of contamination, the UST contractor will provide a report confirming that the UST has been dealt with according to requirements. In Vancouver, this report is provided to the Fire Dept and to the Environmental Services department.

If a UST has leaked, and the surrounding soils are contaminated, the property could be designated as a “Contaminated Site” under the Environmental Management Act of BC, and the EMA’s “Contaminated Sites Regulations” require the owner to remediate the property. This usually requires that an environmental engineering company oversee the removal of the contaminated material and prepare a report documenting the site remediation. Costs for this service may start at about $3,500, but can also run into the tens of thousands of $$ if the contamination has spread under buildings or on to neighbouring properties. The basic principle behind the Environmental Management Act is that “The Polluter Pays”, so that the liability for remediation can be traced back through the ownership history of a property, and be made the responsibility of owners who sold the property many years prior to the discovery of the contamination.

As a REALTOR®, I strongly advise owners to get rid of existing USTs asap, and definitely before listing or preparing to sell their property. An un-tended UST will lie in wait for the worst time to create a nasty, expensive headache for an owner, and Buyers will require, in a contract, that the owner remove any UST found. Removing a tank with the property under contract will complicate the transaction, and can also cause the lender to require additional, expensive investigations, such as a Phase 1 Environmental review. It might even kill the deal.

Environmental regulations continue to expand, authorities will demand more documentation and certification for UST removal, and this will cause more aggravation and expense. Acting early can eliminate the problem in an affordable & stress free manner.

Laneway Housing Update [ July 2011 ]

Fri, 01 Feb 2013 00:33:00 GMT

On July 28, 2011, City Council approved laneway housing development - for RS-1 and RS-5 Zoned, single family areas only – with the following basic requirements.

On lots with minimum 33’ frontage, with open rear lanes, on double fronted streets, or on corner lots with a lane or lane dedication.
Laneway houses to be located on the rear 26’ of the property & at least 16’ from the main house
Must have at least 1 on-site parking space in the rear yard.
Units of 1 – 1 ½ storeys, from 500 sq.ft. on 33’ lots, to a maximum 750 sq.ft. on 50’ or larger lots
Rental or Family use only – no strata titling
Construction of laneway house does not affect existing house (with or without a secondary suite), & they can be built with a new house without affecting its allowable floor area

Beyond these requirements, the City has a number of additional design guidelines:

Quality, Durability & Expression: guidelines to ensure quality of materials, architectural design, environmental sustainability, & building durability.
Scale & Massing: guidelines for building envelope/roof design, height & floor area limits, site & building orientation, & general neighbourliness.
Privacy & Overlook: regulating location of upper floor windows, exterior stairs, roof decks & balconies etc. – LW house to be non-intrusive to neighbours.
Lane Frontage: designs must enhance laneways, making them public spaces, like “streets”. Rules govern lighting, door/window, parking, landscape, garbage location.
Landscape: must enhance lane appearance, environmental performance of the property, & privacy for adjacent properties.

A comprehensive PowerPoint presentation for this is online at vancouver.ca

Before building a laneway house, there are 3 critical first steps: 1. ensure the property is correctly zoned (RS-1 or RS-5): 2. ensure minimum site width of 33’ & a rear lane: 3. ensure there are services (water, gas, sewer) available for the project –Vancouver Engineering Dept is a great help here.

Laneway houses were originally promoted as simple projects, with a simple approval process - but they’re not. The current approval process is like a “mini” development permit application, with complicated conditions & details that must be worked out with a City planner. A few Laneway house approvals have now been granted, and the following process takes about 6 - 8 weeks,

Preliminary meeting with City planner for Design review: 2 weeks for an appointment
2nd appointment to make the Permit application: 2-3 weeks for this appointment
Building permit approval 3-4 weeks.

For most people, that’s many weeks of frustration, worry and time wasted, so it is wise to hire a competent designer/architect to get through City Hall. After the first projects are built & well received by the public, the process may become more streamlined - or not. The bureaucracy was inevitable, however, and a small price to pay to allow these long-awaited, practical additions to the Vancouver real estate landscape! For more info on this, contact me, or make enquiries at 604-873-7611.

Finally - Laneway Housing in Vancouver!

Tue, 15 Jan 2013 00:32:00 GMT

Laneway Housing – aka “coach houses, granny flats” – have been considered for years as a sensible way to create more housing options in the single family areas of the City. A great advantage of laneway housing is that the infrastructure - i.e. back lanes, and houses with large rear yards - already exists, so that these new dwellings can be added without altering the character of neighbourhoods. Another great advantage is that these dwellings would allow seniors to remain in their neighbourhoods, create practical, extended family spaces, and increase affordability for existing homeowners and new residents – especially younger families. After years of talking about it, the City of Vancouver is moving ahead to allow these types of development, and a public hearing at City Council is scheduled for July 21. If Council approves the Planning Department recommendations, applications will be considered right away. Staff recommendations to Council include the following conditions and features for the new laneway houses:

Allowed in single family areas, and to be family or rental housing, not separate, strata title units.
On lots 33’ or wider with an open lane, a double fronting street, or on a corner with lane dedication
Maximum 750 sq.ft., 1 to 1 ½ story, with minimum on-site parking of 1 – 2 spaces
Located in the rear yard (garage area), with environmental & design guidelines
May be added to existing houses (with or without a secondary suite), or can be built with a new house
NB! laneway house development would not require upgrades to the existing main house.

This has been a long time coming and promises to be a bold and exciting development for Vancouver property owners and buyers. For more information, check out vancouver.ca/ecodensity and click on “What is Next?