We are only in the second week of January 2017 and already there are so many things to talk about. In this post I want to discuss 3 main things that's creating a buzz in the Greater Vancouver real estate market.
1. B.C. First-Time Homebuyers Loan Program - Is It Helping?
As most of you already know the local government in British Columbia announced in December that new provincially backed loan program would match the amount a first-time buyer has saved for a down payment — up to $37,500, or five per cent of the home’s purchase price. This is to help middle-class British Columbians overcome the hurdle of saving for expensive down payments.
Although this sounds great in trying to help first time buyers, in my opinion, I'm not sure if this is healthy for the entire market. We are already in short supply to match the high demand and now we are adding more fuel by allowing more buyer's qualify. Also, after 5 years when the no-interest term expires, aren't we leading more residents and Canadians into debt? Not only will they be in debt with the bank, they will now be in debt with the government. How is that helping Canadians and local residents for the long haul?
I have to admit this is great for developers, real estate industry, mortgage brokers, and even sellers but I'm not sure if this is the help the local's really need.
2. BC Property Assessment - Skyrocketed
Lower Mainland homeowners would of received their 2017 Property Assessment and some are seeing 30-60% increase compared to last year. Does this really reflect the value of your property?
If you would allow me to shine some light into this topic, first, IGNORE the tax assessment. Simply put this is a document drafted by a civil worker behind a computer giving an amount on your property that the government can use to collect tax. Please remember that property assessments are made on July 1st of every year so you need to ask yourself this questions "is this a reasonable expectation of what I could of sold my property for back in July 1, 2016?" Once you answered this question you also need to remind yourself that whatever happened in the market after July 1st 2016 will be reflected on the 2018 property assessment. So does this current assessment give you a good indication of the current market value of your home? My answer is "NO". Simply, the number you see on your current property assessment is 6-10 months behind.
3. Demand Outweighs The Supply
Currently in Greater Vancouver (excluding Fraser Valley) we have 6,519 total residential listings. That is detached, attached, and land all included. However, if we remove Whistler, Pemberton, Bowen Island, Gulf Islands and Out of Town areas, because those areas don't really affect us, that brings the listing count down to 5,131. This is extremely low amount of inventory and the demand for real estate definitely outweigh the supply. We are still seeing multiple offers in sharply priced homes, townhouses and condo's while luxury expensive homes have definitely slowed down and the we are already seeing price adjustments in that category. Although we are seeing more price negotiations compared to last spring and summer, with the current amount of inventory at a all time low, I expect the prices to start climbing again. This time last year we had about 7,500 listings... it's almost deja vu.