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February 2024 Market Update!

Westside Market:

Finding detached houses on the Westside is becoming increasingly rare. The scarcity of available properties is pushing prices up, driven in part by new multiplex zoning regulations. Builders and developers are now fiercely competing with buyers seeking homes for personal residence, reshaping this coveted market. We anticipate that Westside detached homes will continue to be one of the strongest market segments for 2024.

East Vancouver Market:

East Vancouver mirrors the Westside’s scarcity of detached houses, intensifying competition among buyers. Half-duplexes are highly sought after, reflecting a trend towards more compact living spaces and more affordability compared to single family detached homes. Despite this, the inventory of townhomes and condos remains relatively high, offering alternatives for those seeking housing solutions.

Downtown Market:

In Downtown Vancouver, the condo market remains sturdy, with prices holding steady overall. However, luxury condo prices are starting to decline, influenced by a shifting interest rate environment. Softening in the rental market and the prevalence of higher variable rate mortgages are prompting some property owners (specifically investors) to consider selling, adding fluidity to market dynamics.

Trends & New Regulations:

BC Government – Flipping Tax: The BC government’s introduction of a tax of up to 20% on profits from property sales within two years is set to impact both supply and demand dynamics in the real estate market. On the supply side, the tax may deter short-term speculative behavior as sellers face significant financial disincentives to quick flips, potentially reducing available properties in the short term. Conversely, on the demand side, prospective buyers, particularly investors seeking quick returns, may become more cautious, potentially dampening demand for short-term investment properties. All that said, recent statistics have shown that this new Flipping Tax will likely impact less than 4% of the transactions in BC, and when you factor in all the exemptions that would apply to many of those, the number drops further. So while the intent of the tax is to contribute to moderating price escalation and fostering more stable market conditions, we are not optimistic about the real world results. Time will tell.

Changes in BC’s Short Term Rental Market:

Sweeping changes are underway in BC’s short-term rental market, driven by new provincial regulations. Premier David Eby announced a multi-faceted approach to addressing the housing affordability and supply crisis. The proposed legislation aims to eliminate multi-property short-term rental businesses while allowing homeowners to lease spaces within their principal residence and secondary suites on platforms like Airbnb and Vrbo. Enhanced enforcement tools, including a provincial enforcement unit, increased fines, and a provincial registry tracking home usage for overnight accommodations, will be implemented. Additionally, Vancouver’s short-term rental license fee will rise from $109 to $1,000. These measures represent an enhancement of regulations province-wide, aligning with the goal of balancing the sharing economy with housing availability for residents.

Let’s Connect!

Navigating Vancouver’s real estate market can be complex, especially amid evolving trends. Whether you’re a buyer, seller, or investor, grasping these nuances is essential for informed decision-making. If you seek personalized insights or guidance on how these market trends may impact your property or real estate strategy, don’t hesitate to reach out to our team. We’re here to help you navigate Vancouver’s real estate landscape. Contact us for more information or to schedule a consultation. Our experienced team is dedicated to providing expert guidance every step of the way. Stay informed, stay empowered, and let’s unlock Vancouver’s real estate market potential together.

February Market Update Video!

FALL 2023 MARKET UPDATE

Greetings, valued clients and friends of Roch & Weeks Real Estate. We trust this newsletter finds you in good health and high spirits. As we transition into the vibrant colours of fall, we wanted to provide you with an update on the state of the Vancouver real estate market and share our insights into what the coming months might hold.

Reflecting on 2023 So Far

The market has been impacted by several increases in interest rates, but so far we’ve been surprised to see how inventory has remained at historic lows. We anticipate that to change as the reality of ‘higher for longer’ interest rates impacts homeowners and investors. For many investors that have variable interest rate mortgages, they’ve likely gone from cash flow positive to cash flow negative, and have had to start feeding their investment monthly. This has caused many of these owners to consider selling and exiting the rental market. For homeowners that bought over the last 2-3 years with fixed rate mortgages, they are starting to worry about their upcoming renewal. We anticipate many of these homeowners will struggle to keep up with payments, or in some cases, have difficulty qualifying for a renewal on their homes.

Looking ahead to the Fall

As we enter the second selling season of real estate, we suspect that more homes come onto the market. We will also see price reductions on properties that were on the market throughout the spring and summer that did not sell. This will definitely create more buying opportunities this fall. As predicted the Bank of Canada held rates yesterday, which is positive news for many homeowners, but we are now just starting to see the lagged effects of the past 18 months of interest rate hikes. As the effects start to make their way through the economy, there will unfortunately be difficult times ahead for many renters, investors and homeowners alike.

Supply Dynamics and Future Trends

Specific market segments and pockets of the city are experiencing low inventory, so as a result well-priced new listings within these segments are encountering substantial demand. Move-in ready detached homes in desirable neighborhoods remain scarce commodities, and this scarcity is projected to persist throughout the remainder of the year. Affordability is going to remain the challenge for buyers in this higher interest rate environment, and we don’t see that changing until we see interest rates lowering.

During these times of dynamic and ever-changing metrics, we believe it is important to be extra prudent when it comes to your real estate situation. If you’re considering your next real estate move, whether it’s a purchase or sale, we encourage you to reach out to us. Our dedicated team of 5 professionals, with over 50 combined years of experience, is here to provide full-service support.

VANCOUVER REAL ESTATE – February Market Update

January brought a flurry of activity into our marketplace. We have already sold 12 homes totaling $24,000,000. This was a huge uptick in activity compared to the last few months. It would seem to me that buyers are getting used to the new interest rate environment and that people are no longer able to wait on the sidelines watching the market. Despite rocky times in the market buyers continue to need to move for many of life’s reasons including having baby’s, getting married, divorced, and downsizing. Times like this make people realize that their homes aren’t just an investment, they are their haven’s and places to enjoy family and friends. 

While the market continues to be sluggish overall there are still a few nice properties that come on the market here and there. When they do come up, they do not last long and are quickly snatched. We work in all of the segments of the market, and within various sub markets, we are seeing different stories emerge. Here are a few key observations of late in different market segments: 

Entry level condos: If priced well these homes are selling and with multiple offers. 

Mid level condos and townhomes: Affordability for buyers is an issue. Well priced 3 bedroom condos and townhomes are hard to find because there is low inventory. 

½ Duplexes: This segment of the market remains hot. In East Van, prices are down from a peak of an average of $2,000,000, and are now closer to an average of $1,800,000 for nice and newer homes. The Westside has low inventory, which continues to put upward pressure on pricing, and sales in this segment are at all time highs. 

Luxury Condos: There is a lot of inventory and sellers are holding prices hoping demand comes up to meet them. The opposite has taken effect, especially downtown, where inventory steadily rises, which will create more downward pressure in terms of pricing on this segment. We expect to see some forced sales in the coming months. 

Entry level detached homes: Move in ready houses are still selling quickly with little inventory. “Land value,” type properties are slow to move with few interested buyers, unless they are well priced. Developers are sitting on their money, waiting for prices to come down while building costs and labour are elevated.

Luxury detached houses: Prices are down substantially, however, inventory is low and buyers are only purchasing if the downturn over the past 6 months has been factored into the price. Large land value type properties are sitting and getting very little action. 

If you are interested in having an up to date market evaluation of your home don’t hesitate to reach out or stop by our office at 6158 East Boulevard and we look forward to chatting with you. 

January Real Estate Market – What’s going on in our market?

What’s coming in 2023

After a quiet December in real estate we are looking forward to what is ahead in our real estate market. What happens over the next 6-12 months will largely depend on interest rates (we will have a good idea of what Q1 will look like once the BoC makes the rate announcement on January 25th). The market has been quite frozen over the past 6 months (generally speaking sellers have not wanted to list, and buyers have not wanted to buy), and that means there is a lot of pent up activity waiting to happen. An interest hold on January 25th could be the catalyst for that pent up activity to engage, or it could take a sideways market for several more months before buyers and sellers start getting active again. Unfortunately nobody has a crystal ball to know what exactly will unfold this year. One thing is for sure, the Bank of Canada is nearing the end of this rate-hike cycle, and may even be there already (we’ll see on the 25th). To further that, rate relief could be on its way later this year. Some economists believe the Bank could start cutting rates before the end of the year, which would be a major catalyst for our market. We’ve read several economists who feel that interest rates will be lower in 2024 than they are today, but perhaps we may see a 25bps increase later this month. Time will tell.

Our best guess is that our market picks up at some point this year, but when that happens will largely be determined by interest rates. A January 25th rate hold could do it, along with the typical strong ‘Spring Market’ which starts in February in Vancouver, or it may take until the second half of this before rates stabilize (with the potential for a rate drop late 2023 or early 2024) before our market wakes up again. We are already starting to see more activity this week than we’ve seen in the previous few months. Buyer’s seem to be coming back into the fold earlier this year than what we’ve typically seen for early January, which makes us cautiously optimistic (we’ve sold three homes so far this year which is a great start). Once ‘potential sellers’ start seeing activity happen, we feel they will be more motivated to get their homes on the market, which gives buyers more options to choose from. We will see what happens first (increased buyer activity, or increased inventory), but one (or both) of those should happen early this year and hopefully contribute to the other factors above to help ‘thaw’ our frozen market.

Where will buyers come from in this new market?

With recent lack of success in the stock market many equity holders, primarily baby boomers are going to continue to help their adult children purchase homes. Given the state of higher interest rates our prediction is that the size of these family loans/gifts are going to continue to grow in size and frequency. Many economists are predicting that this transfer of wealth will only continue in the coming years. 

In addition to that, immigrants will play a major role in our market. Canada added just over 437,000 new permanent residents in 2022, according to Immigration, Refugees and Citizenship Canada (IRCC). This topped the department’s target for the year, as well as the previous high of 405,000 reached in 2021. The bulk of these immigrants are coming from India, China and the Philippines. Looking forward, the government of Canada is predicting nearly 1,500,000 new permanent residents over the next three years. This flood of new permanent residents is expected to bring new homebuyers and renters to communities across the country with a large percentage of those coming to the Lower Mainland. That could increase activity in the residential real estate market, which has slowed since early last year, when borrowing costs jumped with a rise in interest rates.

If you are interested in having an up to date market consultation as it relates to your situation don’t hesitate to touch base with us or pop by our cozy office and we’ll make you a warm coffee or tea!

Sincerely,

Patrick, Devin & The Roch & Weeks Real Estate Group.