If it’s been a while since you listened to the radio, make the next time you turn up the dial The Early Edition with host Rick Cluff on CBC Television. His take on local news as well as the influence of international affairs on our local communities in the Lower Mainland are spot on. One particular podcast caught our attention recently, when Cluff spoke with several experts around the globe about the current state of our real estate market. The round table discussion puts an interesting perspective on our market as part of the whole. Read on, or listen to the full podcast here.

If you ask a dozen so-called real estate experts and financial planners on whether it's the right time or how to invest in real estate, you’ll receive a dozen different opinions. It’s all about your personal needs and how you invest. If you play your cards the smart way, investing in real estate can lead to a nice, passive income stream for your retirement. It's also an ideal way to leverage and borrow against when values rise so you can buy more property.

Three ways to owning real estate are a) sole purchase and ownership of property, b) form a limited partnership to pool resources and enable the purchase of more expensive property, as well as share risks and returns, and c) indirect ownership of property by investing in REITs where you own shares. Today, I'm focusing on direct ownership of real estate and what options you have. Whether you're a seasoned investor or a novice, there's never really a better time to begin long-term investing because the market always shifts.

Before setting off down this path, speak with your bank or a trusted mortgage broker. Rules for down payments on investment properties differ from if you're buying a principal residence. In Vancouver, a minimum 50% down payment is required to generate a break-even monthly cash flow. With property prices so high in the lower mainland, the idea of buying a property and generating cash flow is a challenging feat unless you have a sizeable down payment. The biggest question to consider is: if I buy this property today, do I need an immediate income stream or am I fine with a break-even or possibly a negative cash flow for the first few years? If you do generate a rental loss, this can be used as a tax write-off at year’s end.

In the current financial climate, a lot of real estate investors in the lower mainland are buying with the expectation that property values will continue to rise, and not for current cash flow. This mind-set makes them more “real estate speculators”. If you’ve bought property in the lower mainland over the past 15 years, you've most likely seen a sizeable increase in its market value. Speculators, for the most part, have done very well. It's all about timing. If you bought a property in Vancouver in mid \-2007 and then sold it when the market fell by 20% in 2008/2009, you may have taken a loss. Buying real estate with a longer time horizon is a safer bet, allowing you to ride any market downturns. Short term investing is a lot riskier.

Buying property in Vancouver right now will typically generate a 2-4% Cap Rate depending on a number of factors. Many investors say this return is too low considering the risks and aggravation of owning a rental property. Other investors are just fine with these returns as they’re more focused on the expectation of rising market values. In the end, it’s your perspective that matters and is a personal decision.

If real estate is an attractive addition to your investment portfolio, we’re always available to offer professional perspective and tailored advice to your needs. Contact us to schedule a personal consultation and let's see how, together, we can create wealth and passive income for you and your family.

Here’s to a healthy and prosperous Spring 2016!

Andrew & Jill Hasman

(Photo: Alex Costin)

January 2016 is the second highest start to the year on record with sales 46% above the 10-year average for the month. Low supply and record-breaking buyer demand is still the driving force in the real estate market.

The total number of residential sales in the Greater Vancouver area totalled 2,519 for the month; a 31.7% increase from the 1,913 sales in January 2015. It was only a slight, 10.9% decline from the 2,827 sales in December 2015.

Real Estate Board of Greater Vancouver’s president Darcy McLeod touts the importance of listing your home with MLS® to ensure maximum exposure. For home buyers, MLS®  is the second greatest tool next to an excellent realtor. With so much competition out there, keeping a constant eye on MLS®  gives buyers the best chance to snapping up the home of their dreams.

2016 Opening Numbers:

New Listings (detached, attached, and apartment) in January: 4,442
6.2% decline from January 2015

119.8% increase from December 2015

Total Active listings on MLS®: 6,635
38.6% decline from January 2015
10.1% increase from December 2015

Sales-to-Active-Listings ratio: 38%

Benchmark price for a detached property is $1,293,700
27.9% increase from January 2015

Detached property sales totaled 1,047
34.1% increase from January 2015

Benchmark price for an apartment property is $456,600
19.4% increase from January 2015

Apartment property sales totaled 1,096
35.5% increase from January 2015

Benchmark price for an attached unit is $563,700
16.4% increase from January 2015

Attached property sales totaled 376
16.4% increase from January 2015

For a complete comparison, visit rebgv.org. Want to sell, buy, or require a consultation? Contact me today.

*REBGV Editor’s Note:  Areas covered by Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, New Westminster, Pitt Meadows, Maple Ridge, and South Delta.

(Photo: explore604)

You’ve been thinking about it, you’ve scoured MLS for other options out there, you may have even chatted with a real estate agent. Selling your home is a big deal, and you want to do it the right way, the first time, and that can mean something different for everyone depending on your goals. However, there are some things all homeowners have in common when trying to sell:

1. We all want to receive the highest possible price,

2. We want the process to minimize inconvenience, and

3. We want a realtor that is professional and treats us with the utmost respect

For any homeowner, pre-listing preparation can minimize the chances of failure and heartache when selling your home. Laying this groundwork will ensure the best possible experience and outcome.

Your first step to success is to suss out a few great agents that work in and are familiar with your neighbourhood. Recommendations from friends and neighbors is a great place to get names. The key point is to ensure the REALTOR® works and has a good track record in your neighbourhood. Don't hire an out of area realtor. You want someone who has the experience you need and can provide you with realistic market value estimates to best achieve the sale.

Second is the preparation of your home. Depending on your home’s overall condition, this is the step that requires the most time and attention. A home full of clutter, obvious wear and tear, and in disrepair can cost you big time when it comes to your asking price, so don't ignore this critical step.

During this “staging” step, I recommend being ruthless and getting rid of stuff you don't need. Call in Junk Removal or your charity of choice to take possessions you no longer require. Even closets and storage areas should be reduced of stuff you no longer need; serious buyers do tend to check out every nook and cranny of their potential buy.

Next, walk through your home and identify any wear and tear issues that need repair. Damaged walls, peeling paint, old water stains on ceilings, lose knobs, leaky faucets, dirty grout or mouldy shower enclosures are just a few common areas. We always suggest homeowners have their own pre-listing Home Inspection Report obtained. This will allow you to identify problem areas.

If your home was built prior to 1965 and you have no evidence that an oil tank was ever removed, then obtain a scan for a buried oil tank. This costs $100 - $150 and is worth every penny. Hire an oil tank removal specialist to do this.

Whether you're selling in January or July, make sure your gardens are groomed. A nicely groomed garden shows pride of ownership. Grass should be repaired if there are bare patches, and bushes and trees pruned. Having some winter flowers go a long way and don’t forget to clean out the gutters.

The research and staging of your home for sale can be overwhelming. This is where having a good REALTOR® familiar with your area is invaluable. They can help with your pre-listing checklist and assist in coordinating all the work that needs to be done.

So, when is best to take that final step and put the For Sale sign up? This is a more personal matter. The best time is when it's best for you, the homeowner. It's tough trying to time markets. If you live in Vancouver and you're looking to sell in 2016, here is what we do know:

1. Housing prices are at all-time highs and overall market sentiment is very positive.
2. The supply of homes on the market is very low.

Chinese New Year is quickly approaching and has proven to be a great time to sell in our market.

Low supply, strong demand, positive sentiment and Chinese New Year are ideal reasons to be on the market for sale by January 25th. If you need any help, advice or a professional opinion, contact us any time. We are always here to help your next real estate transaction be a big success! Make 2016 your year.

Wishing you and yours a Happy New Year!

Andrew Hasman

What a year it’s been for Vancouver’s real estate market. High demand, low inventory, and escalating prices made for a busy 2015 that kept everyone on their toes in the fast-paced market. The drastic increases blindsided homeowners and professionals alike, including the experts and economists who would’ve predicted a safe 3% to 5% increase. A year ago, no one would ever have dreamed that housing prices would skyrocket by 26% on Vancouver’s Eastside and 23% on the West. Just when you thought a Westside 33 ft lot in Dunbar worth $1.8 million back in January was crazy, that same lot is pushing $2.5 million today.

Vancouver’s Westside market continues to be fueled by immigration, low interest rates, and a sagging Canadian dollar. Of the 45 homes we personally sold in 2015, a whopping 80% of those involved multiple-offer scenarios with the sold price being above the asking price.

It may be a seller’s market out there right now, but if 2015 proves anything, no one really knows what’s in store for the New Year. What is certain, is wealthy immigrants from China see Vancouver as a safe haven to park their money. With the Canadian dollar falling about 30% against the Yuan in the past year, our real estate prices are even more desirable. Our dollar is likely to remain depressed as long as oil, energy and commodity prices remain depressed. Interest rates in Canada aren’t likely to rise any significant amount, if at all, over the next year while our economy remains sluggish. Our low interest rates, combined with potentially higher interest rates in the US, will keep our dollar low thus continuing to incite demand for Canadian real estate.

Vancouver’s Eastside market, on the other hand, isn’t driven so much by immigration as a more diversified demographics of buyers. There, more local influence is the driving force. Many Eastside buyers are young families and local buyers who once would have purchased on the Westside, but are now out-priced. New demand for lower-cost living on the Eastside is to account for the 30% increase in some neighbourhoods there.

Vancouver’s suburban neighborhoods also saw strong demand and rising prices. In the past couple of months I have assisted a couple of buyers house-hunting in Tsawwassen. Every property we’ve offered on is also in multiple offer scenarios which is driving prices up there as well.

I am predicting another strong year for real estate in 2016. I cannot see how we can sustain 20% price increases, but only time will tell. If you’re thinking of selling your home, I can’t imagine a better time than around the upcoming Lunar New Year. Low inventory in most markets coupled with demand as high as it’s ever been ensures we’re in store for many more bidding wars to come. And that means prices will only continue to rise.

We pride ourselves on providing you with sound advice and breaking market data. Contact us anytime if you’d like to know what’s happening in your local market, and all the very best for a happy, healthy, real estate-rich New Year!

(Photo: Kenny Louie)