Selling price of typical home has fallen 12% since last year and is down nearly $200K since February

The slowdown underway in Canada's housing market continued last month, new figures from the Canadian Real Estate Association showed Thursday, with the average selling price falling to just over $630,000, and the number of home sales off by almost 40 per cent.

The group, which represents more than 100,000 realtors across the country, said that the number of homes sold in November fell by 38.9 per cent from the same month a year ago. November isn't typically a busy month for home sales, as cooler weather often pushes buyers to the sidelines this time of year. 

But the housing market was even chillier than usual this November, with a little over 33,000 homes being sold during the month. That's down about 10 per cent from the typical November sales pace, and down from almost 50,000 in the same month in 2021.

The average selling price of a home that went on CREA's Multiple Listings Service was $632,802. That's 12 per cent below what it was a year ago, and down from 22 per cent from the peak hit in February of this year.

That was before the Bank of Canada started its aggressive campaign of rate hikes, which has taken the wind out of the market's sails by making it much more expensive to borrow money.

CREA says the average selling price can be a misleading picture of the market, since it is easily skewed by sales in big expensive cities like Toronto and Vancouver, so it trumpets another number, the House Price Index, as a better gauge of the market.

The HPI fell by 1.4 per cent during the month to $744,000, and is now down by more than 11 per cent from its February peak, after having fallen for nine months in a row.

"There were no big surprises in the November housing numbers, with the data showing the same trends of lower sales and moderating prices we've been seeing for a number of months now," said CREA chair Jill Oudil.

That price moderation is welcome news for recent buyers like Yildiz Marcelin, who purchased a townhouse in Toronto.

She and her family have owned a condominium in the city since 2016, but with daughters growing up fast, they have been looking for more space for years.

Economist Rishi Sondhi with TD Bank says the numbers released Thursday paint a clear picture of a market that is slowing down, and is likely to continue to do so.

"Demand continues to decline under the weight of rising interest rates," he said, noting that the central bank has already raised its interest rate once since the time period covered in today's data release. "We think they'll move their rate slightly higher early next year, [but] all of this points to continued sales declines in the coming months."

The Home Buyer Rescission Period (HBRP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide on January 3, 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.  

New or revised questions will be positioned at the top of this page.  

What is the Home Buyer Rescission Period (HBRP)? 

The HBRP, commonly known as a "rescission period," gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate an unconditional contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.  

What properties will be subject to the HBRP? 

The policy will apply to the following types of structures: 

• detached homes,
• semi-detached homes,
• townhouses,
• apartments in a duplex or other multi-unit dwellings,
• residential strata lots,
• manufactured homes that are affixed to land, and
• cooperative interests that include a right of use or occupation of a dwelling.

How much is the rescission fee?

Buyers who exercise their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller. 

To help you calculate the rescission fee, BCREA will launch two HBRP calculators, which will be available on BCREA Access.

What is meant by “three business days?”

The HBRP provides that the buyer must exercise their rescission right within three clear business days. Business days do not include Saturdays, Sundays or holidays. Holidays are defined within the Interpretation Act to include:

• Christmas Day
• December 26
• Family Day
• Good Friday
• Easter Monday
• Victoria Day
• Canada Day
• British Columbia Day
• Labour Day
• National Truth and Reconciliation Day
• Thanksgiving
• Remembrance Day, and
• New Year’s Day

In addition, a day set by the federal or provincial government, such as a day of mourning or celebration, is considered a public holiday.

What are REALTORS®’ requirements to inform their clients?

All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of, or presenting an offer to a client, containing all of the following notices: 

• that the HBRP cannot be waived,
• the rescission period time length,
• the dollar amount of the rescission fee,
• the deposit handling, and
• exemptions

Are brokerages required to retain a copy of a rescission notice?

Yes, brokerages are required to retain copies of notices of rescission that are prepared by or on behalf of a brokerage and served on a seller. Brokerages are also required to retain copies of rescission notices that are received by the brokerage.

How are sellers supposed to receive rescission notice?

Buyers must serve rescission notice to the seller through registered mail, fax, an email with a read receipt or personal service. Rescission notices must contain:

• the address, PID or description of the property,
• the names and signatures of the buyer(s),
• the names of the seller(s), and
• a date of notice.

How does a HBRP impact other subjects in my contract?

Other subjects are unaffected by the HBRP.

What about For Sale by Owner (FSBO) properties?

The HBRP applies to all residential real estate sales, which includes private sales and FSBO properties.

Can the HBRP be waived?

No, the HBRP cannot be waived.

Are there any exemptions?

There are narrow exemptions, including:

• sales of residential real property located on leased land,
• sales of leasehold interest in residential real estate,
• sales at auction,
• sales by way of an Assignment of Contract,
• pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and
• sales under a court order of supervision of a court.

Will the rescission fee be taken from the deposit?

If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.  

Who will receive the rescission fee?

The rescission fee amount is provided to the seller

Source: British Columbia Real Estate Association

If you signed a lease in December, consider yourself lucky. That’s because, for the first time since July, Vancouver saw the average cost of rent dip – just slightly.

At the start of COVID-19 pandemic, the average cost of rent in Vancouver dipped. Since then, it’s not just rebounded but gone well beyond pre-COVID-19 prices.

Now, the average cost of an unfurnished, one-bedroom unit for rent in Metro Vancouver is $2,227 per month, according to liv.rent.

Average rental prices in Metro Vancouver – last six months

The December dip is likely due to a few factors. Rental expert Paula Azevedo told Daily Hive that rental prices “seem to be stabilizing and coming to a healthier average after multiple months of an ongoing upward trajectory.”

“With colder weather starting in November, renters seem to be avoiding big moves, which brings the demand to a lower rate while supply remains the same,” said Azevedo.

“There were also a higher number of homeowners shifting short-term stays to long-term due to the lack of visitors, thus, affecting the averages.”

Cost of rent in Metro Vancouver municipalities

Even though across the board, Metro Vancouver rent went down, there were two regions where it went up slightly, in Vancouver (+0.71%) and in Langley (+2.36%.)

Vancouver continues to be Canada’s most expensive city for renters, with North Vancouver a close second.

Does this December dip in rent prices make you more hopeful?

Source: dailyhive.com

A new regulation banning stratas from the ability to restrict homeowners from renting out their residential units is now in effect.

Under the new leadership of BC Premier David Eby, the new legislation was proposed on Monday, November 21, and it was subsequently swiftly approved by the BC NDP majority.

The change in provincial legislation then went into effect on Thursday, November 24, which automatically and immediately overrides any strata bylaw that restricts rentals in their building

This policy shift is part of the provincial government’s new multi-faceted approach to tackle housing affordability.

Based on the province’s data through the Speculation and Vacancy Tax, it is anticipated about 2,300 empty condominiums across BC cannot be rented out due to strata rules that prevent property owners from renting out their units.

It is also believed that the legislation change will open up the possibility for some condominium owners to rent out a room in their unit if they were given the opportunity to do so.

However, stratas can still ban the operation of short-term rentals — such as Airbnb — in their buildings. Existing provincial legislation permits stratas to enforce fines of up to $1,000 per day for short-term rentals that are not permitted under strata bylaws.

As of last week, only strata bylaws limiting residents to age 55 and over are allowed, with any strata age-restriction bylaw restricting ages to under 55 now invalid. Stratas can have bylaws that require one or more persons residing in the unit to have reached an age that is not less than 55 years. The provincial legislation allows any live-in caregiver, including caregivers under the age of 55.

Source : https://dailyhive.com/

Expectedly, the Bank of Canada increased its overnight rate this morning by another 50 basis points to combat inflation. This is the sixth time this year that the Bank has tightened money supply to quell inflation, so far with limited results. 

Specific to existing Variable Rate Mortgage holders, Prime will increase from 5.45%. to 5.95% 

BoC Announcement Highlights: 

• Global inflation remains high and as economies begin to slow down and disruptions in supply chains ease, inflation is expected to follow suit. 
• The Canadian economy continues to operate in excess demand and labour markets remain tight, with a projected GDP growth from 3.25% in 2022 to just under 1% in 2023. 
• Due to recent rate increases, housing activity in Canada has sharply declined, and household spending has softened. 
• The strength of the US dollar is putting additional pressure on inflation in many countries around the globe and the Bank expects no growth in their economy through most of 2023. 
• CPI inflation has declined from 8.1% to 6.9%. Price pressures remain broadly based, yet the Bank’s “preferred measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing.” 

Nest Summary 

“We are getting closer to the end of this tightening phase. But we're not there yet." – Tiff Macklem 

The Bank reiterated its “resolute commitment” to restore price stability for Canadians and said it will continue to take action as required to achieve its 2% inflation target. Achieving this target will take time, and more monetary tightening, such as a 25bpt hike in December, is expected. 

The Bank has offered the observation that CPI inflation is projected to move down to ~3% by the end of 2023, and then return to its ~2% target by the end of 2024. 

Although no crystal ball exists, we are likely nearing the end of the rate increase cycle, and we may see rates flatten in 2023. Should a recession ensue in the near-term, this would apply downward pressure on rates late next year and beyond. 

For variable rate holders specifically – 

• Watch for the BoC to judge further increases based on economic performance between now and the final announcement of the year on December 7th, 2022.   
• We will issue further options and recommendations for existing variable rate holders in the coming days. 

There’s hope in sight after a year of supply chain disruptions and outsized construction cost increases, according to a panel commercial real estate association NAIOP hosted in Vancouver on Oct. 27 focused on the industrial market.

While strong demand earlier this year gave many builders confidence that the market would be able to absorb cost increases, six successive interest rate hikes have put the brakes on deals for space and construction intentions.

“Residential and commercial [builders] have paused projects,” said Ben Taddei, chief operating officer with the Conwest Group, which is both a developer and also operates a contracting division.

Contracting activity has slowed significantly this year with housing starts in Metro Vancouver through September down 10 per cent versus last year with further slowing expected.

“So what does that mean?” Taddei asked. “Some prices have to come down.”

This is what Josh Gaglardi of Orion Construction Corp. of Langley is starting to see. Speaking with Western Investor in July, he said the cost of some materials had doubled since 2020. Orion is now expecting prices to pull back by an average of 10 to 12 per cent over he next year.

“We’re starting to see a very, very slow settling of construction costs,” he told NAIOP. “Right now we’re getting trades calling us more often asking what projects we have going on, do you have work, whereas two years ago you had to call those trades and say, ‘Hey, do you want to work for me? Can you work for me?’”

While labour remains tight, higher financing costs are giving some developers pause, reducing demand and freeing up supplies.

But the long-term outlook remains positive, because of the constrained land supply. This will support asset values, meaning that any pause in the market will eventually become history and activity will resume. 

“Peak land pricing is probably coming down, so when the groups are ready to jump back in, they’ll probably feel a lot more comfortable,” said Ryan Kerr, a principal with Avison Young specializing in industrial properties. “Ideally, land will get to a place where [income-producing properties] can be built and these projects can fulfill the need for new space in the market.”

Metro Vancouver industrial land values peaked at $13 million an acre for the Celtic Shipyards property in South Vancouver, $10 million an acre in Richmond and approximately $8 million an acre in Port Kells, according to Avison Young.

Altus Group reports that the average industrial land prices in Metro Vancouver this year has fallen from a high of $4.7 million an acre in the second quarter to $3.3 million in the third quarter, according to preliminary data.

Kerr feels that any drop in demand for properties from local buyers will be filled by institutional investors, who still have plenty of cash to place. Altus reports that industrial properties have been of particular interest to institutional investors this year as a stabilizing component in portfolios rocked by volatility in the stock market. A moderation in asset values will support investment decisions.

“The land pricing adjustment is a good thing,” Kerr said. “It was becoming a bit drunken college party-exciting, so seeing [prices] come down and normalize a bit, so it’s not so scary, is a great thing.”

The shift should create opportunities, Taddei added.

“Change brings opportunities. When the market is constant, there’s no opportunity,” he said. “If you’re in the game, and you know what you’re doing and you have good relationship and you’re well capitalized and all those good things, you can do well in those markets.”

While demand for strata units has stalled, and other assets are in a price discovery period as sellers realize what today’s buyers are willing to pay, Taddei says Conwest is patient.

“We believe this market is not going to last forever. There is no inventory. We will get our price. We just have to wait for it,” he said.

North Vancouver real estate

Introduction

The North Shore is one of the best places to live in BC. It has great schools, shopping, and amenities.

North Vancouver Real estate over the years has been an excellent investment.

North Vancouver real estate has been an excellent investment over the years. The low vacancy rate, excellent amenities, and close proximity to downtown make it a great place to invest in.

North Vancouver Real Estate is one of the places where investors can find some good deals on property.

The North Shore has many amenities everything is at your doorstep. Schools, shopping, outdoor activities, skiing, and the ocean are all there.

The North Shore has many amenities everything is at your doorstep. Schools, shopping, outdoor activities, and the ocean are all there. The District of North Vancouver School District offers a variety of programs for all ages, including elementary, middle school, and high school.

You’ll be close to amenities such as:

• Shopping

• Outdoor Activities - Cypress Mountain Ski Resort

• Ocean Access - Hiking Trails & Swimming Pools

The North Shore has some of the best schools in BC.

The North Shore has some of the best schools in BC. There are a number of private schools and public schools, as well as independent schools for children with special needs. These schools are all nearby and easy to get to, which means that your children will not have long commutes; they can also be easily integrated into the community at large through extracurricular activities such as sports or music lessons.

The Fraser Institute rates these institutions based on their academic performance, graduation rates, and students' scores on standardized tests (i.e., provincial exams). The results are impressive: many North Shore high schools have been ranked among the top five in BC!

This area has it all, nature, beauty, and great investment potential

This area has it all, nature, beauty, and great investment potential. It's located in the heart of North Vancouver, with everything at your doorstep. You'll feel like a local when you're here! You can walk anywhere or ride your bike or drive up Mt. Seymour Road for an awesome view from above!

Conclusion

If you are looking to invest in real estate in the North Vancouver area, then this is a great place to start. The area is safe and clean with no major traffic concerns. I would recommend this area to anyone who wants to be close to nature but also enjoy all of the amenities that come along with living here.

Introduction

If you've been looking to invest in Vancouver real estate, you may have heard about pre-sales. Pre-sales are an opportunity for investors to buy into new developments before they even start construction. This allows for investors to get first dibs on properties that haven't even been built yet, which can be a great way of ensuring your investment is safe and secure over time. In this blog post, we'll break down what pre-sales are all about and why investing in this way might be worth your while.

What is a pre-sale property?

A pre-sale property is a newly constructed home that is still under construction. A developer enters into a purchase agreement with the homebuyer. The typical down payment is between 5% and 10% of the purchase price, with the remaining 10% to 15% paid in stages as the building is constructed. This down payment is stored in a trust account and will not be released to the builder until after the project is finished. All deposits are fully refundable if the developer decides to abandon the building project.

Pre-sales offer buyers an opportunity to buy new homes at discounted prices and get great value for their money. They also provide developers with stable cash flow and allow them to move forward with development timelines without depending on the whims of traditional lenders who may be hesitant about funding projects during periods of economic uncertainty.

Why should I invest in a pre-sale property?

There are many reasons to invest in a pre-sale property. Here are the most important:

• You can get in at a lower price. The price of the finished condos will be higher than what you pay for your investment, and it’s possible that the price will increase even more before construction is complete.

• You can get in before prices rise even further. If you’ve been waiting for years to buy a condo in Vancouver, then this is your chance! Prices have been rising steadily for years, and experts predict they will continue to do so as long as there isn't another housing crash like there was in 2008/2009.

Let us connect you with the right pre-sale property!

If you’re not sure where to start, our team can help. We’ll connect you with the right pre-sale property and mortgage broker!

You can find a wide range of pre-sales properties in Vancouver here, or just Give us a call at 604-679-5599 for more information. 

Pre-sales are a great chance to invest in the Vancouver real estate market.

If you're looking to invest in real estate, pre-sales are the way to go. With a lower down payment, it's easier to get into the market and reap the benefits of Vancouver's hot housing market.

Conclusion

We hope that this article has provided you with some valuable information on pre-sale properties. If you are interested in learning more about Vancouver’s real estate market, or if you think this sounds like something for your portfolio, we can help.

From first-time homebuyers to investors and downsizers, pre-sales properties are becoming an extremely attractive opportunity in today’s real estate market. Pre-construction properties have yet to be built, so the process and experience of buying are entirely different from that of a standard re-sale transaction. Buying a presale property means that you are buying the rights to a future home, which comes with several significant benefits.

Before we get into the benefits, let’s define presale or pre-construction properties further.

What is a Pre-sale?

New condo developments draw significant interest from Canadians when they’re announced. A presale is when a developer brings suites in a particular development to market before construction has begun. This allows buyers to own the rights to a future home in exchange for placing a deposit down on the property. It’s typical to see buyers put down anywhere from 5% to 10% on the purchase price, which goes into a trust account until the development is completed.

Here’s a look at why presale properties are becoming even more attractive to buyers.

1. Flexibility

Presale properties can take up to four years to be built, giving buyers a large timeframe to fix up and sell their existing residence, save money for a down payment, and have a slow and comfortable move. It’s not uncommon for individuals who anticipate an uptick in the market over the coming years to invest in a presale property, especially for those who are close but not quite ready to list their home.

This strategy has become very popular during the pandemic, as many homeowners are choosing to wait and sell in a few years while still wanting to lock in today’s prices. There’s a large segment of current homeowners looking to downsize in the near future, and buying a pre-construction property gives them the time they need to get ready to sell without a huge upfront price tag.

Buying a presale property also gives you flexibility in terms of the customizations that come with your unit. You’ll be able to choose from a variety of styles and layouts and upgrade your finishes so that everything looks just the way you’d like it to when you move into your new home. New developments also often come with attractive amenities like gyms, pools, and rooftop patios, so explore the options that come with your investment. There’s likely a development already being planned with the amenities you need to be comfortable.

2. Investment Opportunities

Leverage can be one of the major benefits of purchasing a presale property. Buyers can typically secure a purchase with as little as a 5% or 10% deposit, leaving them with an opportunity to see significant returns should the property increase in value. Locking in a price on your purchase date has proven extremely profitable for many Canadian buyers over the last decade. When the market goes up, investors can realize market gains without the costs of regular mortgage payments, maintenance fees, and property taxes.

An additional reason that presale properties can make great investments is the developer’s commitment to the areas where they build. New developments can truly transform neighborhoods in a matter of years, with commercial space for new businesses often accompanying new projects. It can be very profitable to get in early if you spot a transformation taking place, especially if other developments are going up in the area.

3. Less Hassle

Brand new buildings simply have fewer problems than older buildings and their units. Buying a presale from a reputable developer like Allure Ventures, Miracon, or Westbank, to name a few, typically won’t require any repairs for a significant time period upon the completion of the project. This gives you years to enjoy your home without the stresses of constant repairs that often come with resale properties. There’s no worrying about a leaky condo, pipes bursting, or roof replacement when you move into your new property. It’s likely to be many years before any significant maintenance or replacement costs are associated with your home.

4. More Protection

Presale construction generally comes with a warranty, which is another benefit to purchasing a presale property. In British Columbia, for example, 2-5-10 year home warranty insurance is included on all presale construction. This warranty means that potential costs are limited for an extended period of time:

-2 years on any labor and/or materials (electrical, plumbing, heating, ventilation, air conditioning, etc.)

-5 years on the building exterior

-10 years on the structure of the home

A 2-5-10 year home warranty protects you from any unforeseen circumstances and ensures that you’ll be made whole on any potential issues with the property upon its completion. There are also typically 15 months covered for any labor and materials associated with common property.

5. More Options

Things can change over a few years, and presale properties give their owners many options when it comes to ownership. You can choose to sell your assignment prior to moving in, find tenants and rent out your property upon completion, or wait for the development to be built and move into your new home.

Finding tenants for a new property isn’t a challenging task in most markets, as new units are typically in high demand from renters. They have better amenities than older properties, better layouts, less maintenance, and of course, come in a brand new state which is incredibly appealing. It’s easy to understand why they’re in higher demand from renters than older options. Besides being more desired by renters, they’ll also permit you to rent out your property for more monthly rent than a comparable older property. More demand means higher rent prices and a better return on your investment.

Buying a presale property has become an attractive option in today’s market. Compared to purchasing a re-sale property, the 5% to 10% deposit needed to secure a property can be very attractive. Research the site’s surroundings in detail and ensure that you think that development will help transform the community. Sometimes the waiting period can feel long, but time is often just what a neighborhood needs to develop into a thriving community and what your investment needs to mature.