For those of us who own Vancouver real estate, there’s no doubt we have seen a huge increase in our equity in the past number of years. Home prices have sky rocketed and with that our net worth too.

If you are like many, our principal residence makes up a substantial portion of our net worth. Gains on our principal residence are tax-free making the gains even more compelling.

Depending on your age to retirement this may be an opportunity to lock in these tax free gains by selling your principal residence and downsizing to eliminate debt and park your capital elsewhere and/or better diversify.

If you are a firm believer that our real estate market is cooling and prices are potentially going lower, then keep in mind you are potentially losing equity in after-tax dollars. If your home goes down by $200,000 then in order to re-earn this $200,000 back you need to earn and save close to $400,000 pre-tax.

When the market peaked back in June only about 1% of homes sold in Vancouver actually sold at the top. Many sold on the way up and now homeowners are selling on the way down as prices soften. Overall if the market has corrected by 10% since the peak you are still way ahead of where you were 1 year ago!

No one knows which way the market will go but with all this new government mortgage regulation, vacancy tax & non-residence tax most of the speculators and non-resident buyers have left the market. The large drop in demand combined with building supply should cause homes prices to soften but I feel the true impact will not be seen until we enter into 2017.

If you are nearing retirement and counting on your home’s equity to fund a large portion of your retirement then you may want to consider selling now and locking in your tax-free gains.

If you are wondering what the value of your home is worth today you can call upon us anytime. We are always here to help and provide honest expert advice.

Sincerely,

Andrew & Jill Hasman

The latest numbers for the September 2016 market are available from the Real Estate Board of Greater Vancouver. Below are snapshots of the Vancouver East and Vancouver West real estate market statistics. The full reports are available in PDF form for download.

Download the full reports:

Vancouver East

Vancouver West

As we get into the full swing of fall, the Vancouver real estate market is starting to show some effects of the recently implemented Foreign Buyer’s Tax and the impending proposed Vacancy Tax. September’s sales were 9.6% below the 10-year sales average for the month.

“Changing market conditions are easing upward pressure on home prices in our region,” REBGV president Dan Morrison said. “There’s uncertainty in the market at the moment and home buyers and sellers are having difficulty establishing price as a result. To help you understand the factors affecting prices, it’s important to talk with a realtor.”

Vancouver’s top realtor is pleased to assist potential home sellers in determining their home’s market value. Especially in the condo and townhome market, which is seeing a higher demand these days. Home sales of all types reached 2,253 last month, a 32.6% decrease from September 2015 and a 9.5% decrease from August 2016.

The September Vancouver Real Estate Market Stats:

New Listings (detached, attached, and apartment): 4,799
1% decrease from September 2015
11.8% increase from August 2016

Total Active listings on MLS®: 9,354
13.4% decrease from September 2015
10% increase from August 2016

Sales-to-Active-Listings ratio: 24.1%
Lowest since February 2015

Benchmark price for all residential properties: $931,900
28.9% increase from September 2015
0.1% decrease from August 2016

Benchmark price for a detached property is $1,579,400
33.7% increase from September 2015
0.1% increase from August 2016

Detached property sales totaled 666

47.6% decrease from September 2015

Benchmark price for an apartment property is $511,800

23.5% increase from September 2015
0.5% decrease from August 2016

Apartment property sales totaled 1,218
20.3% decrease from September 2015

Benchmark price for an attached unit is $677,000
29.1% increase from September 2015
0.1% decrease from August 2016

Attached property sales totaled 369
32.2% decrease from September 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.

While a lot of speculation still looms around the proposed Vacancy Tax that Vancouver’s Mayor Gregor Robertson first pitched back in the Spring, the goal is clear: open new rental spaces. Hand-in-hand with the recent Foreign Buyer Tax, the proposed Vacancy Tax aims to make Vancouver a more feasible place to live again. Affordable? Not so much.

The Details

Current Vancouver homeowners and future home buyers should be aware that the tax could be up to 2% of the property’s assessed value; a measure hoped to encourage speculators to rent out instead of leaving a home empty. Based on a recent BC Hydro study (with addresses blacked-out for privacy), there are 10,800 homes and condos in the Metro Vancouver area that are sitting empty. The flip side of that is our city’s vacancy rate of less than half a percentage point. Could this new tax help the rental market? Time will tell.

Enforcement

It is still unclear how the city will proceed with enforcing the tax, other than on good faith. Robertson has cited random audits and complaints to catch tax evaders, while others contest how this will affect privacy issues and the sense of community in Vancouver when everyone is expected to keep an eye on their neighbour’s whereabouts--and how long they’re home for.

What If You’re Away?

Homeowners whose Vancouver properties are not their primary residence and short-term rentals such as AirBNB may fall into the realm of taxation. Reasonable occupancy is still to be determined, and Robertson claims he will ask for public feedback before implementing rules surrounding secondary residences and vacation homes.

Counter Propositions

Regional mayors suggested a non-resident tax in lieu of Robertson’s proposal, but it appears this measure is on hold for the time being. Robertson himself has also proposed a new municipal business tax on investment properties as a way to bypass provincial government authority. Enforcement issues are key in the success of either of these programs, and have yet to shown without being at great cost to the city.

The bottom line: whichever direction the new tax takes, housing prices are unlikely to drop as a result. As real estate professor Tsur Somerville from UBC’s Sauder School of Business states, “It’s a good first step that would help renters, but ultimately, it is not going to make Vancouver more affordable.”

What are your thoughts on the proposed vacancy tax? Share with us on Facebook!

Photo: John Lehmann/The Globe and Mail

No doubt you have heard that our real estate market has slowed down. It will be probably a good 6 months before we know if the new 15% non resident tax was the catalyst that caused our marker to cool off. The Real Estate Market was cooling before the tax was implemented so we need a few months at least before we can know what the implications of the tax are.

For those of you looking to buy or sell this Fall there is still opportunity out there.

For home buyers the timing to make a purchase seems and probably makes a lot more sense now. If you have found a home you are interested in there’s a good chance there will not be multiple offers. You now have the chance to take your time and make a conditional offer allowing you time to perform due diligence. With interest rates remaining at rock bottom and the real estate market temporarily out of favour this is a great time to go home shopping.

For those of you looking to sell, don’t be too discouraged. Home prices shot up almost 30% in 2014-2015 and have climbed another 30% plus this year. If prices fall 10-15% over the next 6 months you are still way ahead of the game. There is no indication home prices have fallen at all since the tax and it's too soon to measure as there are just not enough sales out there to get a definitive read. What I can tell you is that so far we have not seen a spike in new listings and with that we are still in a fairly balanced market which is ideal for price stability.

In a softer housing market, you need a professional.

If you are looking to buy and or sell it always makes sense (and more importantly in a softer market) to hire a seasoned professional to help you navigate the softer market. In a hot market any realtor can list and sell your home. I mean, in the past 2 years buyers have literally been lining up to buy houses. In a tougher market the true professionals rise to the top.

Jill and I have worked in markets good, bad and in between for the past 25 years. We know what its like to sell in a market when very few homes are selling. Call us today and lets see if we can provide you with some great market knowledge to help you achieve success with your next property purchase or sale.

We look forward to hearing from you soon.

Andrew & Jill Hasman

604-657-7936

August saw Vancouver home buyers on a decline as sales were 3.5% below the 10-year average for the month. The Real Estate Board of Greater Vancouver’s president Dan Morrison attributes the downward trend in Metro Vancouver during recent months to the new foreign buyer tax. He stated that “the record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August.” Residential property sales totalled 2,489 in Metro Vancouver last month; a 26% decline compared to August 2015 and a 22.8% decline to last month’s sales, while only 1% less than August 2013 sales.

It’s also important to note that while the imbalance between supply and demand continues, fewer detached sales at the high price points, and detached home sales in general, are skewing the average sale prices towards ‘decline’ while benchmark prices remain.

It’ll be some time yet before the true impact of the new tax on the Vancouver real estate market is evident, though in the meantime Morrison admitted, “It’s reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.”

Get the scoop on all the August numbers below:

New Listings (detached, attached, and apartment): 4,293
0.3% increase from August 2015
18.1% decrease from July 2016

Total Active listings on MLS®: 8,506
21.9% decline from August 2015
1.9% increase from July 2016

Sales-to-Active-Listings ratio: 29.3%

Benchmark price for all residential properties: $933,100
31.4% increase from August 2015

Benchmark price for a detached property is $1,577,300
35.8% increase from August 2015

Detached property sales totaled 715
44.6% decrease from August 2015

Benchmark price for an apartment property is $514,300
26.9% increase from August 2015

Apartment property sales totaled 1,343
10.1% decrease from August 2015

Benchmark price for an attached unit is $677,600
31.1% increase from August 2015

Attached property sales totaled 431
25.4% decrease from August 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.

A few evenings ago, a good client of mine indicated that her search to buy a Vancouver home was (on advice of her friends and family) going to be put on hold until Spring 2017. She wants to wait until prices soften and then will buy in the Spring when prices bottom out! I chuckled to myself when i heard this reasoning and also of where the so called expert advice came from. I guess her friends and family know something I and the experts don't know.

I told her that no one knows which way the market is going to trend moving forward. That so-called crystal ball is something we all wish we had but instead we have to make decisions based on what our intuition tells us to do. We always say, “Buy and sell when it's right for you based on your personal circumstances. Forget trying to time the market. If you’re buying you should have a minimum 5-year horizon so short term swings in the market should not matter."

Since the recent market stats came out this week showing August sales off from July I have been inundated with calls from homeowners and potential buyers wanting my advice on what to do. I will start by a very simple analysis of general economic conditions here in the lower mainland stated in Layman terms. Nothing too complicated.

General Economic Conditions In The Lower Mainland

The overall economy here in BC and the lower mainland remains robust. We have low unemployment, and general business conditions are in great shape. You go downtown on most evenings and restaurants are busy. People are spending money. Interest rates are rock bottom and will likely stay down for quite some time. This is not 2008 when businesses were closing, banks were not lending and the economy came to a stand still.

Our real estate market has cooled and I think it has been caused by so much negative news media stating the market was either going to crash or cool down. When enough people hear this negative news the negativity feeds on itself and eventually changes the sentiment. The clincher that really cooled the market was the 15% tax to foreigners. This scared the entire market taking buyers off the streets and also causing many sellers to de-list their properties.

Here is what I am telling everyone and its just my opinion: 

If You're A Home Buyer In The Lower Mainland

If you are a Buyer and looking to step into the market this is a great time to buy. Buy now! This is the first time in maybe two years where you may not end up in a bidding war forced to make a subject free offer! This is finally a sane time to buy. Why would you wait on advice of your friends and parents to buy in the Spring! By Spring 2017 we may see market conditions swing again in the direction of a Seller’s market. When the market is out of favour its time to buy. Be a contrarian. With interest rates at record lows this is a real opportunity.

If You're A Home Seller In The Lower Mainland

If you are a Seller, I am advising those homeowners that have to sell to list in mid September. The rest should wait until the market stabilizes and market sentiment becomes more positive. It does not make sense to list your home when buyers are negative. A seller should stay on the sidelines until possibly late October or maybe even early 2017. Now, if you’re selling and then buying in the same market and location then its probably fine to go ahead and move forward sooner rather than later.

If you consider the big picture in Vancouver you like so many will feel that long term prices should stay at or near current levels. Vancouver is consistently regarded as of the most desirable cities to live in globally. Vancouver has one of the easiest climates to live in. Never too hot or too cold. Vancouver has limited land so we cannot have urban sprawl. The city is so called, landlocked. As more people migrate here the population increase will continue to put upward pressure on price. This new 15% tax to foreigners will cause some to buy elsewhere but for the super wealthy and there are many, this added cost will simply be the price to pay if you want to live in a great city. Safe, clean and far removed from the chaos of what is going on in so many other regions of the globe.

Just my opinion so we’ll see how this all plays out.