For those of you watching the real estate market in 2016 every day brought us another housing story. The year started off just like 2015, ending with an unprecedented level of sales activity and upward pressure on price. No one could have predicted a year ago that Vancouver house prices would climb another 25% in the first 6 months of 2016.
The buying frenzy kept us all glued to day to day market news. Terms like Shadow Flipping became a regular topic for discussion.
After months and months of rising prices, Vancouver residents began to shout louder and louder about the affordability crisis. There was such an uproar from the public that government officials began to enact new policies to slow the market.
Shadow Flipping & Assignments of contracts were clamped down on. The incentives for individuals to get involved in such practices were eliminated. This took many speculators out of the market.
The Property Transfer Tax on transactions over $3 million was increased to slow the high end of the market. Then the Foreign buyers were clamped down on by adding a flat 15% Purchase Tax onto the already existing PTT which became law after only one week of being enacted.
We began to see numerous media stories about illegal laundered money and shady real estate transactions involving foreign buyers and their local realtors. This resulted in a complete revamp of the real estate industry and how it is to be governed moving forward.
With low vacancy rates, scarce rentals and offshore owned empty houses, next came the Vacancy Tax. The city is hoping this will force investors to rent out there empty properties and ease the lack of available rentals in the city.
By fall, the government became worried about spiralling mortgage debt and rules were enacted to tighten mortgage lending. If you were a buyer with less than 20% down, overnight your buying power diminished by 20%. Banks also tightened rules for non residents, making it much more difficult to get a mortgage.
All these new policies caused our market in Vancouver to cool off dramatically, and prices begin to fall by as much as 15% by year end.
So many buyers and sellers moved to the sidelines by year-end to watch and see how the next chapter of Vancouver Real Estate plays out.
No one knows the direction we will see in 2017 and there are plenty of opinions, from prices levelling out to prices continuing to fall.
We tell all our clients to make their real estate decisions based on their own personal circumstances, risk tolerance and information we have at present. If you listen to the news media, friends, relatives and so-called experts, you get such a wide range of opinions.
At this time of year, we want to thank all our clients - past and present - for your continued support over the years, and we wish you all a wonder Holiday Season and New Year ahead. We have so much to be thankful for. If you have any real estate questions, or friends or family in need of assistance, please pass on our contact information. We are here to help.
Andrew & Jill Hasman