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While you’ll find news abound that the Vancouver Real Estate market has cooled or that prices are off; these are generalizations. Certain areas of our market are seeing less activity for certain but that is definitely not true of the market as a whole.

The truth is there is opportunity in every market. Just need to know where to find it and whether you’re in position to take advantage. Fact it, this could very well be the best market ever for you to be selling and buying!

If you’re reading this and are feeling a little crammed in your 1 bedroom Vancouver condo… this is an amazing market!

If you’re reading this and have been considering selling your place in favour of something newer, shinier and in a higher price range… this is an amazing market!

If you’re reading this and always dreamed of getting your own piece of dirt in Vancouver but the detached housing market has been out of reach… this could be an amazing market for you!

Take a look at these sales stats from the past two weeks:

Ok so now you know the condo market in Van is hot. So where is the opportunity within the market?

As noted above, if you currently own a 1 bedroom condo in Vancouver you're in the hottest market in one of the hottest markets in the city. Check this out courtesy of my friends at SnapStats based on the month of January:

Vancouver West:

Vancouver East:

Anything above 20% your looking at Sellers Market conditions. At that point 1 in 5 homes on the market are selling every month.

You can see here that the 0-1 bedroom product on the market is moving at a very good clip. Less inventory and more demand here than anywhere else. Therefor if you’re the owner of a 1 bedroom Vancouver condo in need of something bigger… this is your market!

How about if you have a great condo or townhouse but wanted to get into a home on your own piece of land within the city?

Based on the REBGV January Stats for East Van and Westside Van we know:

Therefore, if you’ve ever wanted to ditch the condo/townhouse and stretch to buy a house there may not have been a better time than now.

There’s always opportunity out there. As always, just need to know where you're looking!

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If you live in Vancouver and/or the Lower Mainland you surely know of the difficulties facing prospective first time home buyers wishing to enter our residential real estate market. The BC Government has just unveiled a new program aimed at removing some of these hurdles in an effort to assist middle-class British Columbians pursue their goals of home ownership.
 
The B.C. Home Owner Mortgage and Equity (HOME) Partnership program will be accepting applicants as of January 16th, 2017, and BC Housing anticipates 42,000 to take advantage over the next 3 years.
 
Many, many, British Columbians will be thrilled to hear of this initiative. However, like any other financial product there are definite pros/cons and details within the fine print that may not appear upon first blush. For the purposes of this post I thought it best to provide a quick overview of the program followed by some thoughts from a mortgage professional in the know.
 
Quick Overview:
The government will provide first time homebuyers a loan in the amount equal to the downpayment the first time buyer has already saved. This amount will be capped at 5% of the purchase price of the home up to a maximum purchase price of $750,000. Therefore, the maximum loan the government will provide will be $37,500.
 
For Example: I am a first time homebuyer looking to purchase a $500,000 condo. If I've already saved $25,000 this program will provide me an additional $25,000 loan to be used as part of my down payment. I then have $50,000 to put down on the purchase. 
 
This loan will be due 25 years from the start date while being interest-free and payment-free for the initial 5 years of the term. Following this first 5 years the applicant may choose to repay the loan in full or enter into a monthly repayment plan. Should the applicant enter into a repayment plan the loan will be amortized over 20 years at the current interest rates of the time.
 
In order to qualify for this program the government requires you meet all eight of these criteria:
 
1. Have been a Canadian citizen or permanent resident for at least five years
2. Have resided in British Columbia for at least one year immediately preceding the date of application
3. Be a first-time buyer who has not owned an interest in a residence anywhere in the world at any time
4. Use the property as their principal residence for the first five years
5. Purchase a home that has a purchase price of $750,000 or less (excluding taxes and fees)
6. Obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price
7. Have a combined, gross household income of all individuals on title not exceeding $150,000
8. Have saved a down payment amount at least equal to the loan amount for which the buyer applied
 
Some points from the fine print you'll want to make note of:
 
With help from long-time Mortgage Professional, Heather Jiwan, I've compiled a few notes that applicants must consider prior to seeking assistance through this initiative.
 
This program while it may be great for some definitely has real costs involved to it. Whether or not any individual first time homebuyer should be seeking approval through this program to assist them is truly on a case-by-case basis. Here are some key points to make note of:
 
  • The loan provided goes into your debt service calculation and can actually have the effect of reducing the amount of mortgage funds you qualify for.
  • Using these funds automatically requires you qualify for high-ratio financing, which means an insured mortgage through CMHC, which means insurance premiums.
  • The cost of these insurance premiums will vary depending on the down-payment but very important to know that amount will carry interest over the life of the mortgage. 
  • In order to qualify for the mortgage you must also qualify for loan payments on the government contribution at 4.64% (current posted 5-year rate as of writing) over a 20 years as if they were starting today and not the actual start date 5 years from now.
  • Keep in mind interest rates today are historically low and the interest rates of 2022 are unknown
 
After speaking with those in the know it's become clear to me this is actually a costly plan to the applicants and will not be beneficial to everyone. So, I've asked who is this program great for!? 
 
This program will be great for the first time homebuyer who is making good money, has great credit with little to no other debt, who can then save for the repayment after 5 years. 
 
There are certain other situations in which this program will certainly benefit the applicant but definitely best you speak to a mortgage professional about your specific situation before diving in with an application.
 
Check out these following sites for further information:
 
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Since August 2nd, 2016, foreign buyers of Greater Vancouver residential real estate have been liable to pay an additional 15% tax on the fair market value of their purchase. This in addition to the Property Transfer Tax already in place for all homebuyers.

Full details of the Foreign Buyers Tax may be found here.

This past Sunday, February 29th, while attending the Chinese New Years celebrations in Downtown Vancouver (coincidence? Maybe..) Premier Christy Clark told a scrum of reporters of the provinces plans to amend its foreign buyers tax.

In the coming days we should learn the exact details; but, for now we know the plan is to remove the tax burden on foreign buyers whom work and pay taxes within the province.

While speaking to reporters the Premier said:

“We believe the best and the brightest should be able to come to British Columbia,”

“We’re going to lift the foreign owners’ tax on people who have work permits, who are paying taxes and living in British Columbia, as a way to encourage more people to come.”

The debate surrounding this tax has been had and I will not be getting into any of that here. Forward thinking, I believe this is a prudent measure to adjust a tax that was quite clearly punitive on an unreasonable number of Greater Vancouver home buyers.

Considerations will certainly be given to how this may be exploited or what happens to those who bought already that would have been omitted under these new rules. Therefore, the burden to implement these changes in a fair and just manner will lie on the acting government.

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