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WEDNESDAY FRIDAY, DEC 21, NOVEMBER 2016 - JAN14, 4, 2014 2017
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YEAR IN REVIEW P
hew! What a year it’s been for Vancouver and BC real estate stories. From soaring values, to shadow flipping, to the foreign buyer tax, to tough mortgage changes and then Donald Trump’s US presidential election win… 2016 has seen it all. Here are the highlights of our year in real estate.
JANUARY January real estate news is always dominated by the New Year’s BC Assessment figures, which shocked everyone in January 2016. The value of residential real estate in Vancouver compared with the previous year went up by 16.96 per cent, with the most expensive properties to be found on Vancouver’s West Side – again. In other January news, Royal LePage predicted that home prices in Vancouver would rise another nine per cent across 2016.
FEBRUARY The big real estate story of February was the unethical application of contract assignments to deliberately inflate home prices – now known as “shadow flipping” – which started with a Globe and Mail story. The issue was later tackled by the BC government in various ways – see March and May. Also rocking the real estate world in February was the BC Budget, which sidelined first-time buyers in favour of subsidizing buyers of new homes. And first-time buyers were also shocked by the increase in the minimum down payment for homes above $500,000.
MARCH Following February’s shadow flipping stories, in March the BC government announced new rules intended to remove the potential profit of contract assignments
from real estate agent’s hands. Many in the industry supported the move, but the board’s then-president wrote to Premier Christy Clark that the BC government was overreacting in response to media stories. Meanwhile, the spring real estate market in BC was accelerating at a “breakneck pace,” according to the British Columbia Real Estate Association.
APRIL With the market at scorching levels, Central 1 Credit Union issued an April forecast that predicted Vancouver and BC home price rises would continue through to 2018. It seems the credit union did not foresee the drop in sales and policy interventions that would add to the slowdown of cooling market. Hoping to offset the market frenzy, the City of Vancouver approved in April the next steps for its new Affordable Home Ownership program to supply 300 belowmarket-priced units to Vancouver residents.
MAY A major meme in May was a series of media stories on the perceived exodus of local Millennials from Vancouver, over the lack of affordable housing – which was responded to by a Vancity survey of 500 local Millennials, which suggested this was far from the truth.
JUNE Reacting to a March vacant home study, Mayor Gregor Robertson announced in June that 10,800 empty homes was unacceptable and that he would launch a vacant home tax “with or without” the province’s backing. June also saw two federal red flags about Canada’s housing market, including finance minister Bill Morneau’s promise
to conduct a “deep dive” into expensive housing markets – this just a few months before introducing strict new mortgage rules – see October.
JULY The big news of July came right at the end of the month, when the BC government did a full 180-degree turn and announced that a new foreign buyer tax, would be imposed in early August. The announcement left the real estate industry scrambling to try to get as many overseas-buyer transactions through before the August 2 deadline as possible.
AUGUST The overseas buyer tax was implemented August 2, and immediately agents started reporting deals collapsing. There were also many tales of collateral damage of those buyers who had committed to a purchase and were suddenly hit with the new tax. Early August sales statistics suggested that Vancouver home sales could be down 63 per cent year over year.
SEPTEMBER The board’s MLS® resale statistics for August, issued early September, revealed that although home sales were indeed down in August, it was nowhere near the 63 per cent previously suggested. The collateral-damage victims of the tax banded together, launching a class-action lawsuit September 19 against the BC government for damages incurred.
OCTOBER Another policy-shocker in October, this one in the form of strict new mortgage qualification rules for all Canadians. This new “stress test” prompted a lot of criticism as it could push many first-time and
Happy Holidays
low-income buyers out of the reach of home ownership entirely. Forecasters were equally bearish in October, with the National Bank predicting a home price drop of 10 per cent following the recent slew of policy changes, and Royal LePage saying that Vancouver prices had seen their “final hurrah” – at least for now.
NOVEMBER If all of the above wasn’t enough, early November saw the victory of Donald Trump’s US presidential campaign. Immediately, Americans who had been threatening to move to Canada, should Trump win, seemed to be making good on their threats, with Lower Mainland home searches from US sources tripling the day after the election. In other news, the CMHC reported that rental vacancy rates had dropped even further in Vancouver, especially in investorheld condos.
DECEMBER After a full year of real estate media frenzy, December has so far been quiet, at least by the time REW.ca went to press. But in early December, a poll found – fairly unsurprisingly – that Vancouverites were largely opposed to the proposed 3.4 per cent hike in property tax, which is well above inflation. This was followed by a last-minute proposal to add an extra 0.5 per cent to that raise, in order to create a $3.5 million fund to help solve the fentanyl crisis sweeping the city (and, indeed, country). That total of a 3.9 per cent in-crease in property tax was approved in a (non-unanimous) council vote December 13, putting Vancouver home owners firmly on the hook for the opioid epidemic. For all these stories and much more, go to REW.ca/News.
Watch out for our next issue, published January 11, 2017. Happy Holidays to all our readers and customers! GO TO
REW.CA /NEWS
TO READ THESE STORIES AND MUCH MORE REAL ESTATE NEWS AND ADVICE
BC Government Offers New Loan Program to Match FirstTime Buyers’ Down Payments
City of Vancouver Approves 3.9% Property Tax Hike, Including 0.5% for Fentanyl Crisis
BC Home Sales Start to See Seasonal – and Yearover-Year – Decline: BCREA