Vancouver detached home sales have dropped nearly 40% compared to a year ago and you know what that means?
The market for detached homes in Vancouver has softened so much that it is “beginning to enter buyers’ market territory,” says the president of the region’s real estate board.
Now get out there and transact!
Yvr2zrh shared this comment:
Wow. Quite a lot of negatives for real estate values.
1.) If you live outside Vancouver and keep an apartment empty there, you now have a very punitive tax. Total will be 3% by 2019 (only 0.5% provincial in 2018 as a bit of a leeway to allow people to sell).
2.) FBT @20% – pretty good. Big tax – starts immediately. Wow . More people will get caught again. Deals will die. Also if property is over $3M – this will make it 25% for a foreigner to buy a Van West house. Then they have to pay 3% per year ($90K?) to leave it empty. Game over.
3.) The 2% spec tax – Strange name – it’s more of an absentee owner / empty home tax. It’s pretty sizeable. It’s going to be strange but somehow I think they are going to force it onto certain “principal residences” i.e. students, 10-Year visa people – who don’t qualify for really being a resident. Then – if they really pay tax in BC there is a tax credit. Good system.
4.) Full reporting of pre-sale transactions for tax purposes. I suppose that may help but you need to require a tax withholding for non-residents because otherwise – they just won’t pay.
5.) Unveiling all the hidden ownership – starting with collecting on new transactions and forcing existing transactions to be unveiled.
So – I would say that “Housing for Housing” has been supported and properties for non-residents etc – – that will be tough. What about all the Okanagan properties owned by Albertans – – It’s going to be interesting to see how many people bail!!!
Most economist are predicting a slower housing market in Canada, but how slow is too slow?
Southseacompany points to this article wondering how ‘sharp’ any correction would be:
Last week, the Bank of Canada hiked the overnight rate to 1.25 per cent, causing the credit union to note that Canadians have some of the highest levels of household debt in the world.
The interest rate hike — when combined with a new mortgage stress test for uninsured borrowers that came into effect on January 1 — could severely limit the purchasing power of many would-be home buyers, cooling the market dramatically.
But while most economists agree that these factors will dampen the market in the first few months of 2018, many believe it will eventually adjust to the changes. What’s more, some argue that Canadians debt levels aren’t as worrying as they might first appear.
“Household debt in Canada is seen by some as unsustainably high and a source of vulnerability for the financial system,” write National Bank chief economist Stéfane Marion and senior economist Matthieu Arseneau in a recent report. “But the international evidence suggests that Canadian household leverage and home prices are not abnormal.”
Read the full article here.
Southseacompany shared this article, looks like everyone’s mortgage is going to get more expensive:
The Bank of Canada raised its benchmark interest rate to 1.25 per cent Wednesday and signalled that, barring certain risks, more hikes are likely in the rest of the year. That’s creating an unusual situation for Canadians: for the first time in years, those renewing mortgages will be faced with higher rates and an increase in payments.
Even before Wednesday’s decision, five of the country’s largest banks hiked five-year fixed rates 15 basis points to 5.14 per cent last week. (CIBC is still offering 4.99 per cent.) In a country where consumers have grown accustomed to low rates, and where households are burdened with record levels of debt relative to income, this kind of change is worth noting. A recent survey published by insolvency trustee MNP Ltd.found 48 per cent of Canadian respondents were $200 or less away from being unable to fulfill their monthly financial obligations, an eight point increase since September.
Read the full article over at Macleans.
Bullwhip29 points out that BC Finance Minister Carol James has no plans to prohibit foreign buyers in BC.
Foreign buyers who want to buy residential real estate in Metro Vancouver pay a 15 percent tax.
Meanwhile, Finance Minister Carole James has no intention to outlaw foreign buying of B.C. homes when the NDP government introduces a series of policies in the next couple of months to address the high cost of housing.
James has said that there will be no ban like the one that exists in New Zealand.
B.C. Green Leader Andrew Weaver, on the other hand, has demanded an outright ban on foreign buying of residential real estate to curb demand. And he wants James to introduce this in her upcoming budget.
Read the full article over at the Straight.