We just wrote a piece that got picked up by CBS News Money Watch… In the piece we wrote on a recent study done by an SFU professor…
Only the best Vancouver properties are selling right now. This is why price have held up and that is most likely the reason why prices are holding up. The other 95%+ of sellers are taking their homes off the market betting the market will get better.
If you are a buyer, then you are getting top notch quality (call it value?).
If you are a seller, make sure you are providing top noth quality.
Over 95% of homes listed are not selling… despite only a 30% decline in sales year over year.

Here is a little blurb on it:
“According to an article posted on The Vancouver Sun which was written by Andrey Pavlov who is a finance professor at Simon Fraser University, he highlighted the fact that he thought that the indices were “misleading” though he felt this was unintentional. According to him, the indices were not true reflection of the attitude changes in the market at the moment. According to him “In an up market, everything sells, good or bad. In a down market, only the best properties sell. So it takes awhile for transaction based indices to reflect the true decline in prices.”

If you are reading this and you are on the fence about buying or selling then call us!

We can make it ALL CLEAR and provide a proven strategy!

Here is a testimonial from a client we just completed a purchase for this morning!

“Thank you Richard,
I’m looking forward to lunch! Will be probably in the new year. Thanks again to Denise and everyone it has been an absolute pleasure to have your support and professional assistance.
Cheers
Andreas”

See below for how our sellers are successfully selling their homes despite this market:

Richard Morrison

Real Estate Geek. Richard Morrison is the head & founder of The Richard Morrison Team, a medallion team that has consistently performed in the top 10% in the past 10 years. He is the go to Real Estate Analyst for many investors, home buyers & sellers. He is straight forward & only believes what he analyses and not what he hears.

Make sure you comment below if you want your area and property type analyzed!!

The real estate market is a moving target at best! And, myths whirl though this industry like no other – especially when they are coming from mass media who like to report (read sometimes distort) on aggregates when what you really need is to pick apart things to see them more clearly… We here at Richard Morrison Re/Max don’t believe what we hear, but only what we study, and what we analyze.

This is where we analyze & discuss the happenings in our Vancouver real estate markets as well as test our analysis. Please feel free to praise, argue, or just rant on about YOUR point of view. It is all good.

Vancouver West

DETACHED (single family homes) – 52 sales on 1037 listings. Projecting 81 for the month (139 last July) for a 12.8 month supply. Massive Buyers’ market

ATTACHED (town homes) – 32 sales on 345 listings. Projecting 50 for the month (62 last July) 6.9 month supply for a Balanced-to-Buyers’ Market

APARTMENTS (condos)- 191 sales on 2301 listings. Projecting 295 for the month (341 last July) for a 7.8 month supply. Buyers’ Market

Total inventory for all property types in Vancouver West has edged up extensively.

The median sale price in Vancouver West has decreased by 14% since last June 2011 to a median price of $1,879,000.
Keep in mind however, that prices since the peak (in January 2012) have fallen from a high of $2,290,000 to $1,879,000 or an 18% drop.
So, I headed on to do more research and dissect the market for one client of mine who was thinking about selling his Attached townhome in the Kitsilano area. He owns a 2 bedroom townhouse ranging in the $460,000 to $550,000.

This I thought which might give me a clue to see if the areas in high demand were also being hit just as hard. (NOTE: This represents a real client and I actually had to do a study for him before he sold. )

My client was taken by surprise when he saw that the Townhouse market of the Kitsilano area has been hardly hit!

What I found was, despite intensive market pressure, something is keeping prices in the town home market in the Kitsilano market resilient to the market pressures so far.

In fact, prices in the town house market in kits have only gone down by 3% since June 2011…

The key take away here is that this is happening in markets everywhere, from Vancouver East, to Vancouver West and Fraser Valley.

(more…)

Take a trip to Vancouver and one is sure to hear many talks about the local soccer team and for many fans of the local team the worry about how the team is performing has brought about many doubts and the local dailies have not made the situation any easier with headings like Vancouver soccer team whitecaps- will they survive?

Despite their last year performance fans should not get disappointed or loose hope in their team’s performance because the team’s history since the early eighties has been rated as best for small teams in the leagues and they have always improved their performance in every given league they play in. This too should come as good news because the individual player’s performance has always been rated highly and has given the team a good reputation and respect amongst teams in the same league. As a Vancouver real estate agent that loves soccer & loves playing soccer, I can appreciate when I see a great player…

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If you are of the thought that the Chinese had started losing interest in the real estate in Vancouver, then you should see what we are still seeing here on the West Side. This is because some new report has indicated that Vancouver among other areas in Canada is Chinese’s most popular foreign property investment destinations. Mainland investors from China have been gaining interest in purchasing oversea properties over the past few years, making about 30 percent of investors investing in foreign property.

To those who are unfamiliar with Vancouver, Vancouver is a seaport coastal seaport somewhere on British Columbia’s mainland. Vancouver is the eighth largest Canadian city. It has a population of about 2.3 million people in its metropolitan area. However the city’s population is said to be about 603,000 people according to a census conducted in 2011.

This city is highly ranked as one of the world’s livable city which probably explains the reason for the Chinese’s interest in the city. The city’s quality of living is ranked as the 4th highest among all the cities in the world. However it is Canada‘s top in terms of the most expensive city.

Tourism ranks as the second largest industry in Vancouver. This is so because Vancouver is surrounded by nature. This city is also ranked among the top 10 cleanest cities in the world.

The interest from the Chinese, and the Vancouver`s appeal has helped in driving up the price of real estate in this area. This has made the city rank 6th among the most overpriced market in the entire world as well as the 2nd highest in North America.
Some people will however attribute the massive purchase being done by the Chinese to Vancouver’s real estate prices being still undervalued, considering factors like the price of land, among others.
If I were an investor in Vancouver, I wouldn’t desist to invest in this sector to tap from the opportunity. Asia still has their eyes set on us… despite any economic slowdown they may have.

However there needs to be some adequate control from the concern authority to ensure the viability of real estate investments, including restricting when they can sell back and how much they are allowed to buy…

Interestingly enough North Vancouver real estate seems to remain the only spot in the Lower Mainland to remain relatively untouched by Chinese investment. I reckon it is because they are not in large numbers there and because of other Asian influences in the area…

The Federal Government has announced four new clamp downs on mortgage financing effective Monday, July 9th, 2012.

These changes include:

Where we are coming from: In 2008 the Government allowed up to 100% financing at 40 year amortizations. If we compare a $300,000 mortgage at 5.79% for 40 years in 2008, the minimum monthly payment required was $1,592.72.

Under the new rules announced today, a $300,000 Vancouver homes mortgage for 25 years at a 3.09% five-year fixed rate, the minimum monthly payment required will be $1,433.63.

The difference comparing where we came from to where we will stand after the new rules? Your monthly payment is reduced by $159.09 and you’re mortgage-free 15 years sooner!

Is there a big difference between the 30-year vs 25? No, the difference is only $52.48 per $100,000 in mortgage debt. As seen in the above example, it actually places Canadians (and Vancouver residents) in a better financial position.

These changes will only affect insured mortgages. So if you have greater than a 20% down payment or equity built up in your home, we may see these options around a bit longer. But, until July 9th, you can still get a 30-year mortgage even if you have an insured mortgage.

As for the refinance limit, this shows us the federal Government wants to ensure prudence to reduce spending and be certain people are not refinancing all the equity out of their homes.

Opportunity

Yes, there is a definite buyer’s market in Vancouver as seller’s advantage wanes in 2012, but that doesn’t mean buyers will know how to capitalize on that advantage. Here are a few things for buyers to consider to make sure they reap the rewards of the 2012 market before it gets away from them:

1. Hire the Best Buyer’s Agent You Can Find
If ever there were a time to relish the fact that you’re a self-made financial wizard, this is not it. Even if you’re used to going it alone in the financial world, you’re still going to need a qualified, experienced insider to get you the in depth research and expertise you’ll need to take real advantage of this lopsided, new yet ever-changing, buyer’s market.

And that means you need an excellent buyer’s agent to guide you through this new process, get you the research data you need in a timely manner, and help you negotiate the best price, terms, and deal you can get in this quirky market. Go this one alone and you’re definitely NOT going to come out as far ahead as you think you will. Choose your buyer’s agent well and you’ll be back at his door with a smile on your face asking to do it again — soon and often, before this Vancouver buyer’s market is done with all the goodies still left.

2. Go for Profit First, Then for Pretty or Perfect
If you or your spouse is dead set on finding your perfect little dream home in this market, one that makes your heart sing, you may end up not being able to take advantage of the windfalls this buyer’s market may bring to others with more of an investor’s viewpoint. This quirky buyer’s market will definitely reward those ready to recognize the value of the deal first, regardless of the pretty. That’s not to say that you won’t find beautiful homes in this market. You will. In abundance. Just make sure, however, that you stay aware of the added value you can get in this market and not waste the opportunity to profit from it.

It may take a while for the market to correct itself and get back on an even keel, but saavy investors are actively involved here. Don’t let them scoop up the deals while you ponder over some insignificant issue that’s not pretty perfect. Go for profit first in this market, then for pretty or perfect, not the other way around.

3. Get Your Buyer’s Agent to Research Comparables In depth
There’s gold in the mountains of deals you will find out their in 2012, but don’t think there’s going to be a sign in the front yard telling you which one is going to give you the most bang for your buck. Good comparables will give you a lot of research to narrow down your best bets.

One dead giveaway, however, is to make sure you look closely at the information provided in the homeowner’s tax assessments for the last five years at least. Then pull the tax assessments for as many comparable homes in the neighborhood and on their same street as you can. There’s a good chance that your seller may not have appealed their Vancouver home tax assessment when the bottom fell out of the market while most of his neighbors did. While neighbors who had intent to stay in their homes forever wanted their assessment to reflect true market values and assessments, your seller’s goal was to keep his market value and assessments as high as possible as he knew he was going to sell and either wanted to make as much money as possible or was just trying to keep from going upside down on his mortgage or losing his home altogether.

Talk to your buyer’s agent in depth about this, as it may mean you have even more room to wiggle around and negotiate a lower price with your seller, knowing their asking price is still too high as compared with the lowered values in their neighborhood.

“Vancouver’s real estate market to cool, not crash” is the latest forecast by various real estate experts that comes as good news to people who dream of buying homes. Every Vancouver resident is aware of the changing price trends in the real estate market but with recent reports Vancouver residents have something to smile about.

Most real estate companies realized that many people are hesitant to buy homes due to the unpredictable costs but this is not over yet even with the reduced prices of buying homes most real estate agents still have hidden costs that they do not necessarily disclose to the clients thereby costing them more than the agreed price.

Many advertisement are now trying to convincing clients that acquiring resale homes is cheaper and do not have extra charges, this might not be the case and is only making more buyers skeptical and hesitant to buy homes because some of the adverts are unrealistic and sound like marketing gimmick just out to deceive the public. Due to the rise in living cost people have become more careful on the their spending and many people do a lot of research on market trends and the rates so as not to be deceived .

A finding like “Vancouver’s real estate to cool, not crash” is an eye opener for many who were in the dark about how the marketing trends were, what to expect and who to trust and vice versa. Many Vancouver real estate companies are not happy but the real estate market is currently conducive for buyers and some areas are becoming cheaper and affordable. This comes as good news for many who have dreams of owning homes in Vancouver and for the economy it is a boost when more people have the financial ability to buy homes.

With more emerging news like these, many Vancouver residents will forget the trouble of being homeowners and start enjoying the slower pace of searching for homes, with more reasonable prices – after all, not everything goes up in a straight line forever…

DISCLAIMER: I am not a tax lawyer, so please consult a tax lawyer that can give you legal advice. If you rely on the advice given below, I am not to be held responsible and you take full responsibility for your actions.

Now moving on to our article:

HST (Harmonized Sales Tax) was introduced in Canada in 2010 as a way of combining the regional provincial Sales Tax (PST) and federal GST (Goods and Services Tax). When introduced the HST was beneficial to many businesses since it lowered the administration cost in that they were taxed by one body. The HST also paved way for job creation. Being a plus for companies, the HST however had a negative impact on the real estate market of Vancouver. Since HST introduction, the real estate market in Vancouver had experienced a drop in housing sales numbers with decreasing number of people who bought houses. Most of the sellers were finding themselves running at a loss. This problem led to a petition to remove the HST system in Vancouver. The petition was a success bringing about the new rules for Vancouver HST tax in 2012.

The new rules for Vancouver HST tax in 2012 will bring about a number of changes that will improve the real estate market in Vancouver. The biggest change that we will see under the new rules for Vancouver HST tax in 2012 is the taxing system. The HST taxing system on houses in British Columbia will transition back to the PST starting from April 1 2013. That means the building cost of houses built on April 1, 2013 or after will be cheaper since the builder will not have to worry about having to pay HST.

The new rules for Vancouver HST tax in 2012 will ensure that the people of Vancouver, British Columbia will pay an equitable and consistent amount of tax under the PST when purchasing a newly constructed home. This rule is exactly what the real estate needs to boost sales. As a builder, it means that you can now dig out your hidden money and build the house you have been dreaming of.

Here are more details

H.S.T. will be eliminated April 1, 2013 (yes, April Fool’s Day). To help purchasers of new homes, the provincial government has announced transitional rules.

Effective April 1, 2012, buyers may be eligible for a provincial enhanced New Housing Rebate if they buy, as their primary residence, a home (as currently defined) priced up to $850,000. The current threshold is $525,000.

In addition, buyers may also be eligible for a provincial New Housing Rebate if they buy a secondary vacation or recreational home outside the Greater Vancouver and Capital Regional Districts priced up to $850,000.

Buyers of new homes will be eligible for a rebate of 71.43% of the provincial portion of the HST paid on the new home up to a maximum rebate of $42,500. Homes priced at more than $850,000 will be eligible for a flat rebate of $42,500.

Below are the typical scenarios.

If a buyer enters into an agreement dated on or before April 1, 2012 and they take ownership or possession on or before April 1, 2012, nothing changes. The buyer will pay the 12% HST and be eligible for a rebate of up to $26,250 on homes priced to a maximum of $525,000. Homes priced at more than $525,000 are eligible for a flat rebate of $26,250.

If buyers have entered into an agreement dated on or before April 1, 2012 and they take ownership or possession on or before April 1, 2013, they will pay the 12% HST and be eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced at more than $850,000 are eligible for a flat rebate of $42,500.

If a buyer purchases a presale residential property and they have an agreement dated on or before April 1, 2012 and they take ownership or possession on or after April 1, 2013, they will not pay the 7% provincial portion of the HST. Instead, buyers will pay a temporary transitional provincial tax of 2% on the full house price. This 2% reflects an embedded PST builders pay on materials.

If a buyer purchases a presale residential property and they have an agreement dated on or after April 1, 2012 and before April 1, 2013, and they take ownership and possession before April 1, 2013, they will pay the 12% HST and be eligible for a rebate of up to $42,500 on homes priced to a maximum of $850,000. Homes priced more than $850,000 are eligible for a flat rebate of $42,500.

If a buyer purchases a residential property and they have an agreement dated on or after April 1, 2012 but the construction of the home commenced before April 1, 2013, and they take ownership and possession after April 1, 2013, they will not pay the 7% provincial portion of the HST. Instead, buyers will pay a temporary transitional provincial tax of 2% on the full house price. This 2% reflects an embedded PST builders pay on materials.

If the Contract of Purchase and Sale is signed on or after April 1, 2013, with possession after April 1, 2013, only GST is applicable. The HST will generally cease to apply to sales of real property (including residential real property) if ownership and possession of the property transfer on or after April 1, 2013. This will be the case for sales of new housing, irrespective of whether the agreement of purchase and sale was entered into before April 1, 2013 or whether construction of the new housing began before April 1, 2013.

If a Contract of Purchase and Sale is signed on or before November 18, 2009, or construction began before July 1, 2010, with possession on or after April 1, 2013 special transitional rules apply. In this situation a Buyer will pay a 2% transition tax.

If a Contract of Purchase and Sale is signed after November 18, 2009, or construction began before July 1, 2010, with possession on or after April 1, 2013 the buyer will pay a 2% transition tax. However the 2% tax will not apply where construction has been substantially completed before July 1, 2010 and the PST Transitional New Housing Rebate has not been claimed as of February 17, 2012.

All the same rules apply to recreational property that apply to other residential property.

The year of 2012 has seen the rise of home buyers in the east side of Vancouver. Many home buyers are looking for affordable homes that are currently only found in the East Side. However, the market is slowing down as of recent and prices have softened a little.

Many buyers have moved from buying houses in the west side because of the high cost. The dreams of home purchasers however have not been shattered altogether because they will get their starter homes easily in Vancouver east.

However it is advisable that home owners get a consultation with realtors so that they get advised on the best locations to buy their houses in Vancouver East as not all of the areas are the same.

This is because the cost of these houses also depends on the neighborhoods. Some neighborhoods have their houses more expensive. It has been stated that the market has been flooded in the real estate industry of Vancouver East Side. However, we still believe it remains balanced. The demand for homes has been fulfilled by the great availability of houses for single families. These homes include duplexes, townhouses and condos.

In the streets of Vancouver, there are advertisements of many home sellers who are trying to attract buyers. Buyers must ensure to select carefully as we are now in a Buyer’s market and they carry much of the advantage.

Most families would like to live in a neighborhood that offers friendly environment and facilities that will enable them relax. For instance, parks are good for picnics and quality family time. The sports fields are also important for the entertainment and body fitness. So do chose an area where there are many parks and facilities nearby.

Vancouver East Side real estate market may continue to heat up in 2012, but all stas in the market currently point to a Buyer’s market and prices to be declining. Either way, choose a good professional and ensure that you do your own research!

Cheers!
Richard.