Our local Vancouver market has started out with a bang as predicted! All we are lacking now is INVENTORY! The buyer demand is high and they are buying up whatever is hitting the market. The typical year-end low inventory point January 1st was expected but the demand is outpacing the rate in which properties are hitting the market. Accordingly, as predicted, the Sales Ratio is increasing pushing all market segments into a seller’s market. With our market not being able to keep up with the demand, prices will continue to increase.
Time to Upgrade: In an appreciating market, there is no better time to upgrade into your next home. Ideally from a timing perspective, we always recommend selling in early spring when demand is high and inventory low for the best sales results. Then buy in late spring when inventory levels catch up to the market and there is more selection to choose your new home. The upgrade window is now open, don’t miss it!
Activity Barometer: The activity barometer is creeping up in price.
Condos: If you recall, our condo market jumped into a seller’s market this past August 2019 when the sale ratio passed 20%. So condos under $1M have been hot for the past 6 months and continue to do so. Furthermore, this activity is creeping above past $1M giving a much needed boost to the higher-end luxury condo/townhome market.
Houses: Where last year the detached market was dead slow in both Vancouver West and Vancouver East. The only exception being West Side houses under $2M, and East Side houses under $1M. Already this year the activity on the West Side is creeping well past the $2M mark, and the East Side past $1.5M. Again demand is outpacing supply.
So, my market recovery prediction last year seems to be coming into play as only the first month of 2020 unfolds. The ‘hot mark’ in the activity barometer is rising, sales ratios are climbing, and inventory is lagging behind. The perfect ingredients for a strong recovery in our Vancouver market I am happy to announce. Call us now to discuss in detail the best timing approach for your property.
The Bank of Canada (BofC) kept the overnight rate unchanged when they met on January 22nd. They sighted that the Canadian economy slowed in the 4th quarter of 2019 and they expect the 1st quarter of 2020 to also be slow. The GDP is expected to be 1.9% for 2020. They may cut the overnight rate at some point in 2020 for the following reasons: • The Canadian economy may continue to show stunted growth • The US is expected to have lackluster growth in 2020, lowering the overnight rate should reduce the value of the loonie which is good for exports. • Consumer spending is expected to slow in 2020
The one caveat to a cut is that real estate values have recovered in many areas so the BofC may decide to leave rates unchanged for a longer period of time.
Long term, we don’t see any significant increases to the mortgage rates in 2020.
Every year we receive many calls regarding assessment values. Let’s review a few quick facts: BC Assessment sent home owners their 2020 assessment notices a couple weeks back, which reflect a mostly computer-generated figure “value” as of July 1. 2019 based on sales leading up to this date from the months/year leading up to this. In other words, by the time you can access the info online, or get it in the mail, it is 6 or more months old. Furthermore, this value from July 1st of 2019 is based on the property condition as of October 31, 2018, so as you can gather looking at these dates, these figures are just a “Ballpark” for tax purposes. This is in contrast to a formal market value appraisal done by a realtor or appraiser using recent sales (where willing buyers made a purchase of similar properties) considering current physical details of the property, buyer demand, sales ratios, market, etc.
Many people are concerned about their decrease, and some with the increase in assessed value. Many assume that just because your assessed value goes up so will your taxes. Rest assured this is not necessarily the case. The City of Vancouver calculates your annual taxes by dividing their annual budget by the total assessed value of all the properties in Vancouver (the mill rate) and multiplying this factor by your assessed value. So, if all the assessments are up (across the board) your taxes should not change. Your taxes will change, however, with City Hall’s new budget (that’s what you should be scrutinizing – not the assessments). Bear in mind City Council recently voted to approve a 7% tax increase (which is still less than the 8.2% originally suggested). To expect property taxes to go down because the assessed value has gone down isn’t necessarily going to happen. If the budget is up, and your assessed value is up, your taxes will likely go up. If the assessment is down but the budget is up a lot, taxes may still go up. Or if by chance, your assessment has jumped above your neighbours because of a renovation, then your taxes will go up accordingly.
Here is an interesting chart that shows some of the changes.
Property owners who decide to appeal their property assessment should review information on the Property Assessment Appeal Board website on how to prepare for an appeal and then complete a Notice of Complaint (Appeal) Form. The deadline to appeal your assessment is January 31, 2020. For more info visit www.bcassessment.ca
A few interesting facts: • Each year less than 1% of BC property owners appeal their assessments. • Note: you can’t appeal your taxes. You can only appeal your assessment. • BCA is a provincial Crown corporation. Since 1974, it’s been responsible for determining and reporting property value estimates. • For 2020 BCA reported the number of properties assessed in the Lower Mainland is 1,014,135 properties, an increase of 1% from last year. • Total value of real estate in the Lower Mainland in 2020: $1.41 trillion, down 5% from 2019. • In BC, 88% of all properties are classified as residential (class 1)
Home Owner Grant Thresholds Drop The Home Owner Grant a provincial grant which reduces the amount of property tax an owner-occupier pays. To qualify you must: • Be the registered owner; • Occupy the home as your principal residence; • Be a Canadian citizen or permanent resident of Canada; and • Live in BC.
The Home Owner Grant threshold exists across the province. The values are: • $570 for the basic grant; • $770 if the home is located in a northern or rural area; • Up to $845 for home owners age 65 and more or a home owner with a disability; and • Up to $1,045 for home owners age 65 and more or a home owner with a disability where the home is in a northern or rural area.
The grant is available to owners of property assessed at up to $1.525 million in 2020, down from $1.65 million in 2019 to reflect the decline in home prices.
The grant is cut back by $5 for each $1,000 of assessed value over $1,525,000. In other words this means properties assessed up to $1,639,000 ($1,679,000 in a northern and rural area) can receive a partial regular grant. In northern and rural areas, the basic grant is gone at $1,804,000 and the higher grant at $1,859,000.
Our year has ended on what could be the most positive note possible. Greater Vancouver is on the brink of our most impressive recovery to date. Following 2 years of a softening market thanks primarily to government intervention in the form of Foreign Home Buyers Tax, Vacant Home Tax, Speculation Tax, and the Stress Test, our market has been held back long enough to regroup and gather momentum and a pent-up demand that we have never seen the likes of.
Already over the past 6 weeks we have seen unparalleled activity in the sale of our listings with 5, 7, 9, 12, 13, 15, and even 23 multiple offers on single properties resulting in well above market sale prices. Yes, our marketing plan is certainly far more effective and strategic that your average real estate brokerage, but that coupled with our offer review strategy, and a new hungry market demand has yielded incredible benefits for our sellers these past couple months. We have generated some $25,000-$230,000 above list price sales making some very very happy clients.
And we are not the only ones witnessing this exploding market. If you read CMHC’s news release on October 28th “Metro Vancouver home prices could return to peak levels in a year: CMHC” there is strong data supporting a very fast and aggressive market recovery that will well surpass the peak 2017 levels. Sit back and fasten your seat belts because its already begun.
As you can see in the graph to the above, townhomes and detached houses on the eastside have passed well into a Seller’s Market over 2 months ago and rising steeply.
And as you can see to the graph below, even Vancouver’s westside detached and townhomes have jumped into a Seller’s Market. Overall the Real Estate Board of Greater Vancouver has seen a year-over-year increase in sales activity of 45% (47% up for detached houses, 40% up for apartments, and 56% up for attached homes). And if interest rates remain low, and tanks with red stars don’t roll down the streets of Vancouver, these sharp recover trends are more than likely to continue through 2020. Vancouver is once again entering the spotlight as one of the most desirable cities in the world to live in with clean air, clean water, great schools, strong economy (maybe even better in 2 years), and safe. Where else would you want to live . . . . really.
My prediction? Watch for a 20% increase in pricing over the next 12 months, and another 15% for 2021.
Over the past 2 years we have seen many changes to the mortgage market in terms of regulations, product offerings and the way mortgage rates are priced. Last fall, we were certainly heading towards mortgage rates in the 4-5% range; this fall, we are in a fairly stable interest rate market. At the moment mortgage rates are inching up slightly, while the interest rate set by the Bank of Canada is unchanged, citing mixed data, and forecasting concerns about a possible recession in 2020/2021 due to trade wars. In the summer, the bond market pointed to a possible recession with significantly falling bond yields. Our mortgage rates fell as a result and we experienced an inverted market where the variable rate mortgages were more expensive than the 5 yr fixed rate. Now, we are in a flat rate market where the variable rate and the 5 yr fixed rates are largely equal. We are not expecting a lot of change on the horizon, just small fluctuations to the fully discounted 5 yr rate.
Qualification still poses a problem under the stress test for some borrowers, but, there seems to be light at the end of the tunnel where high net worth programs are assisting some applicants in this area. First time buyers are somewhat impacted by the stress test, but most times their qualification is inline with their monthly budget in terms of affordability. The new minority Federal Government is unlikely to loosen the mortgage rules at this time.
Rates: The rates here are the lowest rates based on an owner occupied purchase with high ratio insurance and transfers under a 65% Loan Amount, Refinances and Mortgages over 65% are priced at higher rates.
Carolynne R. Maguire, Notary Public, MarpoleNotary.com
Nature affords us many examples of home ownership being closely associated with a desire for pair-bonding and/or social structure. Whether a nest, hive, or long-term mortgage, some things just seem better when shared. Owning property with another person or persons can create synergistic opportunities not always available to individuals. With life-savings often hanging in the balance, however, the estate-planning and personal commitment implications of the two main options for multi-party ownership can raise important discussion points. Accordingly, when the question arises as to whether the title be held as “Joint Tenants” or as “Tenants in Common” (or some combination thereof), it is important to understand the differences.
Having very little to do with “tenancy” in the rental sense, the most significant feature of Joint Tenancy is its right of survivorship. Upon the death of a joint tenant, the deceased’s interest in the property is immediately extinguished in favour of the surviving joint tenant(s) and does not form part of the deceased’s estate, thus avoiding Probate and its associated costs and delays. This differs from Tenancy in Common where, upon the death of an owner, the deceased’s interest in the Property will pass to his or her Estate as yet another asset to be distributed under the Will. Other important distinctions are that, unlike Tenancy in Common, Joint Tenancy requires equal interests be taken at the same time on the same document.
Relationships come in many forms and, as with any major investment, it is important that the objectives and expectations of co-owners be understood and agreed upon from the outset. It is generally recommended that discussions involving property ownership preferences take place prior to making an offer to purchase, certainly before title conveyance, and ideally with benefit of professional financial planning. In some cases, side agreements may be advisable to document responsibilities and intentions under a variety of “what-if” scenarios and these may require expertise in Family, Tax, and/or Estates Law.
For a non-spousal couple, partners with children from a previous relationship, parents helping their offspring with a home of their own, or for various others who may or not benefit from a right of survivorship, the decision between Joint Tenancy and Tenancy in Common demands clarity and consensus on their view of the future. For some, this can be a relationship-defining moment!
The pace of scientific discovery in cancer has never been faster, and new innovative therapies and precision medicine are dramatically impacting the lives of patients and their families across the province. All of this is possible because of the generous support and donations made to BC Cancer by clients like you to our annual Ride to Conquer Cancer.
Last year was a record-breaking year according to President and CEO, Sarah Roth, of BC Cancer Foundation. “$63.7 million dollars was raised to support research and care at BC Cancer thanks to our passionate community of donors!”
We both know firsthand, that every dollar counts in making a difference for those who are living with this disease and those who love them. Maybe we can break that record again in 2020 and raise these numbers to further the advancement of detecting and treating cancer. It is because of the donations made that the landscape of treatment within BC has been tremendous ensuring that patients have access to new trials, the latest drugs and treatment options.
Your support allows access to treatment by a larger number of participants and breakthroughs with personalized cancer care with genome decoding and understanding cell evolution and unlocking the answers to questions of the origins of cancer and why they evolve and why they are resistant to drugs and why they metastasize. This research is a key pathway to cancer prevention and understanding the root environmental causes of the disease.
Adam and I, together with the rest of the Pospischil Realty Group, are extremely grateful for your generosity and continued support. It is our hope that with your generosity and continued support we will eradicate this disease.
You can donate to our 2020 Ride To Conquer Cancer now by simply by clicking on the “Donate/Join” button at the top of the main page.
We believe the cure is possible and close, be a part of it!
This past weekend at our annual Trafalgar Elementary School Pumpkin Patch Fundraiser Event we raised $2300 with 100% collected going towards cancer research and treatment options (BC Cancer Foundation) and for Trafalgar Elementary School (PAC). Thanks to you and all your neighbours who came out to support this annual event and once again make it a success! The infamous white witch is still alive and kicking, the popular ghoul in a coffin, the popcorn, and healthier treats and toys, all made the patch fun for all!
See more photos at: www.pospischilrealty.com/community/ or https://www.facebook.com/PospischilRealtyGroup/