Carmen McCracken & Martin Dashon Dec 5, 2016 3:18 PM
The concern comes from the B.C. Real Estate Association forecast this week that average home sale prices will fall by as much as 8.7 per cent in the Greater Vancouver and surrounding areas. There is a 13.78 percent drop from the previous forecast only a few months ago. Overall, the new forecast for the first time in 5 years, has been a steady decline for the Greater Vancouver area.
Image Source: BCREA 2017 Forecast
Hanging onto a home or property in a falling market is ideal. Making it through the tough times, then selling later when the market rebounds is an example of a good strategy. However, it seems that property owners are mortgaged to the max and cannot get around these declines in the housing market. These fundamental practices are the difference between having to foreclose and being in a position to ride the storm. There are other circumstances can also play pivotal roles in having to foreclose or not.
It is through pricing markets and economic growth over the past years that these forecasts and predictions set the trends. The market is still up from 2015 but is consistently decreasing and seems touchy.
Carmen McCracken & Martin Dashon Nov 17, 2016 10:12 AM
The controversy foreign home buyer tax didn’t stop Canada’s immigration website from going down shortly after the US presidential election last week. Disappointed American residents researched what exactly is a “double-double”, where to buy the best toque, and the possibilities of jumping the proverbial ship.
Carmen McCracken & Martin Dashon Oct 1, 2016 2:10 PM
The most expensive city in Canada is now the world's riskiest city in housing if a sudden downward correction were to happen.
Housing prices in Vancouver are always on the rise and even during the economic crisis of 2008 Vancouver still saw growth in Real Estate values. As wages and commodity prices weakened the market continued to rise which has caused a "significant overaluation" in the market.
Over the past couple of years the Vancouver market has seen increased upward pressure due to strong offshore investors and foreign property owners. The risk comes from the fact that Vancouver Real Estate values are out of sync with current economic conditions in Canada and around the world.
Other cities also sited and being risky are: Vancouver, London, Stockholm, Sydney, Munich and Hong Kong.
Carmen McCracken & Martin Dashon Sep 1, 2016 1:35 PM
Vancouver, Toronto and other major Canadian cities have had a huge drop the first half of 2016. The distance between what people earn pre-tax and what homes are costing now is ever increasing and detached homes and places to raise a family are hard to find. But the drop in the cost of higher end detached homes may only start to become reality later in the year if this trend continues.
This trend has started to encourage more townhouse and condo developments in outlying regions such as Maple Ridge where homes and condos have now separated by larger margins in terms of what people can afford.
Some analysists say that Vancouver is expected to receieve a small housing correction but nothing too alarming as the demand for homes and affordability in the Lower Mainland is ever present.
Even though Vancouver and some outlying cities have seen a small decline, the rest of BC has improved and continues to be a strong market.
Carmen McCracken & Martin Dashon Aug 29, 2016 3:03 PM
Tesla's Gigafactory, under construction in Sparks, Nevada, will be the largest building in the world, by footprint, when it's finished. The batteries it produces are crucial to Tesla's plan to make affordable electric vehicles.
Carmen McCracken & Martin Dashon Aug 2, 2016 12:59 PM
Government to introduce a 15 per cent foreign buyer tax effective August 2
The provincial government will implement a 15 per cent foreign buyer tax on all residential transactions effective August 2, 2016. The tax will be added to the Property Transfer Tax and will apply to all residential properties purchased by foreign nationals or foreign-controlled corporations.
The new tax will be payable on applicable transfers registered with the Land Title Office on or after August 2 regardless of when the deal was completed.
The tax will apply to any transferee that is a foreign national, foreign corporation, or taxable trustee. Foreign nationals are defined as people who aren’t Canadian citizens or don’t have permanent resident status in Canada. (Permanent residents will have a valid permanent resident card issued by the Canadian government.)
“Housing affordability concerns all of us who live in the region. Implementing a new real estate tax, however, with just eight days’ notice and no consultation with the professionals who serve home buyers and sellers every day needlessly injects uncertainty into the market,” Dan Morrison, Board president said. “Government has had a long time to take action on the affordability issue, yet they decide to bring this new tax in over a long weekend, with no notice, and no time to prepare. It would have been prudent to seek consultation from the people most knowledgeable about the impact.”
Under the new tax, for example, a foreign buyer or foreign-controlled entity will pay an additional $300,000 in tax on a $2 million home.
“To minimize short-term volatility in the market, we’re calling on government to exempt real estate transactions that are in the process of closing from this new tax,” Morrison said.
Foreign corporations are any corporation not incorporated in Canada, or are incorporated in Canada but controlled in part, or wholly, by a foreign national or corporation. Publicly traded companies are excluded.
Commercial properties are excluded, and mixed-use properties will only pay the tax on the portion of the property’s value that’s for residential use.
Carmen McCracken & Martin Dashon Jul 15, 2016 12:40 PM
Ancient rainforests, mountain peaks that touch the sky, and cities on the edge of nature; British Columbia is the epitome of wilderness travel and home to endless outdoor adventure. Discover how BC's untamed nature inspires travellers and locals alike, reconnecting them with a wild found within.
Carmen McCracken & Martin Dashon Jul 1, 2016 12:46 PM
The Office of the Superintendent of Financial Institutions (OSFI) issued a letter this morning to all federally regulated financial institutions (FRFI). The letter expresses concern about the rising levels of household debt in Canada and serves to remind FRFIs of their obligations under Guidelines B-20 and B-21 to assess and underwrite mortgage loans and mortgage insurance in a prudent manner.
The letter states: Given the current economic environment in Canada, with record levels of household indebtedness and growing risks and vulnerabilities in some housing markets, OSFI’s supervisory scrutiny in the area of mortgage underwriting will continue. Moving forward, OSFI will place an even greater emphasis on confirming that financial institutions conduct prudent mortgage underwriting, and that their internal controls and risk management practices are sound and take into account market developments.
OSFI has identified the following five specific areas that it expects lenders to consider diligently during their underwriting process: Income Verification Due diligence processes for lenders must be in place. Inadequate income verification can adversely affect the assessment of credit risk, anti-money laundering and counter terrorist financing (AML/CTF) compliance, capital requirements and mortgage insurability. More stringent due diligence for incomes outside of Canada should be applied, and there should not be any reliance on collateral values as a replacement for income validation.
Non-Conforming Loans OSFI warns that the 65% loan-to-value threshold should not be considered a demarcation point below which, sound underwriting practices and borrower due diligence do not apply; a borrower’s character and capacity to service the loan should always take precedence over the value of collateral when underwriting mortgage loans or insurance.
Debt Service Ratios Incomes should be conservatively calculated and appropriately questioned. In particular, rental incomes from the underlying property should be critically examined. OSFI also suggests that relying on current posted five-year interest rates to test a borrower’s ability to service its obligations does not represent an adequate stress test in a rising interest rate environment.
Appraisals and LTV Calculation OSFI suggests that rapid house price increases create more uncertainty about the reliability of property appraisals. Institutions should use appraisal values and approaches that provide for a conservative LTV calculation, and not assume that housing prices will remain stable or continue to rise.
Risk Appetite and Portfolio Management OSFI’s supervisory work indicates that the risk profile of newer mortgage loans is generally on the rise. OSFI reminds mortgage lenders and mortgage insurers to revisit their Residential Mortgage Underwriting Policy and Residential Mortgage Insurance Underwriting Plan regularly to ensure a stringent alignment between their stated risk appetite and their actual mortgage/mortgage insurance underwriting and risk management practices.
OSFI’s letter further states that they are working on various capital policy initiatives to strengthen the measurement of capital held by the major banks and mortgage insurers to ensure their ability to weather losses from residential mortgage defaults. New measures are targeted for implementation in November 2016 and January 2017 respectively. Risk Sensitive Floors, Capital Requirements for Mortgage Insurers, and BCBS Revisions to the Standardized Approach for Credit Risk are each included in these reviews. We are pleased that OSFI is committed to consultations with our industry prior to the implementation of these new rules. Mortgage Professionals Canada will be involved in these discussions and we will keep you informed of any developments.
Carmen McCracken & Martin Dashon Jun 14, 2016 12:59 PM
Falconry is one of the world's oldest sports. It also happens to be the most effective way of protecting airplanes from stray birds. Falcons, the "great white sharks of the sky," terrify smaller birds. Mark Adam, president of Falcon Environmental Services, trains them to scare away birds that might otherwise impact planes.
Carmen McCracken & Martin Dashon Jun 3, 2016 12:07 PM
For countless months the Vancouver real estate market has been booming, yet this market has been arguably reserved for the wealthy. Consequently, there has been a large portion of the Lower Mainland’s population left out in terms of purchasing real estate.
Research put forth by Vancity has determined that 61% of Vancouver millennials (aged 18 - 24), are still living at home in addition to having the lowest discretionary income in the country - disputing the longstanding argument that millennials have an inability to effectively save their money. Despite the fact that Vancouver led Canada in job creation in April of 2016 and the unemployment rate has dropped significantly, a frustrating truth is realized.
National Bank Financial put forth that a down payment on an average Vancouver property equates to approximately 9 years of saving. Because of this, it leads individuals to wonder whether it is worth it to stay in the Vancouver area. This is why we see an upswing of young professionals and recent graduates spending a few years in a rental property to gain work experience, before relocating to a more affordable housing market.
In the Vancouver area, it is more cost effective for millennials to consider purchasing a townhouse or condominium to increase their discretionary income. The issue being, there is a distinct lack of these types of properties available to those who cannot afford to purchase a home.
A poll administered by CIBC discovered that 75% of Canadians believe that entering the housing market is more difficult for millennials than it was for previous generations. Additionally, something should be done to ease the financial burden millennials face in buying a home.
Carmen McCracken & Martin Dashon May 16, 2016 4:18 PM
Vancouver’s Catfé is targeted at those whose leases or strata's don’t permit pets, cat lovers who can’t get enough feline time and those looking for the beneficial de-stressing cats can provide. All Catfe cats are looking for a forever home and since opening Catfe has placed over 55 cats.
Twenty years since the world's first cat café opened in Taipei, Vancouver's own cat café was added to the list almost six months ago. These 'purrfect' cafés offer a place where people can commune with cats while enjoying snacks, books and wifi access.
Catfe is open daily 11 am to 9 pm except Thursdays. Reservations are recommended. For a sneak peek watch the video and click HERE for more information.
Carmen McCracken & Martin Dashon May 2, 2016 12:32 PM
The Molson Coors brewery, a three hectare industrial property, at 1550 Burrard Street in Vancouver has been officially purchased by Concord Pacific for $185 million, following confirmation late last year that the property was in the process of being sold for an undisclosed amount to an unknown buyer.
Presently, the Molson Coors brewery is zoned for industrial use only, and the city of Metro Vancouver has stated on numerous occasions that they have no plans to rezone the site. Protection policies put forth by the city stress the importance of the brewery’s location, as it provides accessible industry jobs for individuals living in the city.
Consequently, it may be no easy feat to get the property rezoned.
Concord Pacific, a chiefly residential developer, has arranged to lease back the property to Molson Coors over the next two years while a new brewery is constructed elsewhere. Despite the City’s desire to keep the brewery an industrial zone, Concord Pacific plans to apply for rezoning. As of April 11th, 2016, the City of Vancouver had yet to receive an application to rezone, nor do they intend on rezoning the brewery for anything non-industrial.
Local economists are concerned about the repercussions rezoning may have on the City of Vancouver. For an economy to properly function, it is imperative that a given city has a balance of residential and industrial development.
Considering that the Molson Coors brewery is the last protected industrial property in Vancouver, it is arguable that a
rezone is unlikely to happen.
Concord Pacific’s vision for the property is to create a “knowledge-based work centre” coupled with a residential development - transforming the property into a vibrant and multidimensional attraction in Vancouver. For now, Molson Coors will continue to operate out of the brewery until at least 2018.
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