Last week, I had the privilege to listen to Robyn Adamache from Canada Mortgage and Housing Corporation (CMHC) and Michael Ferreira from Urban Analytics at a Real Estate Board of Greater Vancouver (REBGV) education breakfast. The focus of the event was to review what is happening in the Vancouver real estate market and predictions on what we can expect in the future.
While the implementation of the Foreign Buyer's tax shocked the market into a slowing down, the residual effects are still here today and we can see that the prices of homes in the downtown area have risen as a whole.
My take away from the talk was pretty much what I was expecting - currently we are experiencing a market with high demand and low supply. Foreign buyer demand has slowed, which has effected the high end market most, while the entry level market homes, such as one and two bedroom condos are still in high demand. I expect to see a steady, slow rise in the market over the year. However, instead of market increases in the 25%-30% range like we saw in some areas of Vancouver in 2016, I expect a 5%-10% increase over the year. So far this year, we are still seeing a number of multiple offers, that said, the higher end market homes are sometimes taking a bit longer to sell.
The year 2016 is considered one of the craziest real estate markets we have ever seen. We saw certain markets rise 2-5% per month and more government involvement than ever before, with the implementation of a Foreign Buyers tax, increase of the Property Transfer Tax, introduction of a Vacancy tax and changes to mortgage rates and qualification measures. These measures were the government's way of attempting to address the supply and demand imbalance by decreasing the demand with taxes. Unfortunately, minimal communication took place between the governmental decision makers and the industry professionals that would be most effected by the changes. I strongly believe if our current Provincial Party in power were given an opportunity to mulligan the implementation of the Foreign Buyers tax, they would. Please do not get me wrong, I agree with the implementation of the tax; however, not grandfathering all contracts that had been written prior was a very large mistake.
While the implementation of the Foreign Buyer's tax shocked the market into a slowing down, the residual effects are still here today and we can see that the prices of homes in the downtown area have risen as a whole.
It is always important to know what is happening in the market when making real estate decisions. That said, the time to buy or sell is when it is right for you.
If you have questions about real estate and want to talk to an expert who is connected and educated on the issues, do not hesitate to call me, Leslie McDonnell, at 778-838-2378. I look forward to hearing from you and welcome your call!
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