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Home sellers awaken this spring, bringing much-needed inventory to the housing market

Home sellers awaken this spring, bringing much-needed inventory to the housing market

While Metro Vancouver home sellers appeared somewhat hesitant in January, new listings rose 31 per cent year-over-year in February, bringing a significant number of newly listed properties to the market. 


Greater Vancouver REALTORS® (GVR) reports that residential sales in the region totalled 2,070 in February 2024, a 13.5 per cent increase from the 1,824 sales recorded in February 2023. This was 23.3 per cent below the 10-year seasonal average (2,699).


“While the pace of home sales started the year off briskly, the pace of newly listed properties in January was slower by comparison. A continuation of this pattern in February would have been concerning, as it could quickly tilt the market towards overheated conditions,” Andrew Lis, GVR’s director of economics and data analytics said. “With new listings up about 31 per cent year-over-year in February, this will relieve some of thepressure that was building in January and offer buyers more choice as we enter the spring and summer markets.” 


There were 4,560 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2024. This represents a 31.1 per cent increase compared to the 3,478 properties listed in February 2023. This was 0.2 per cent below the 10-year seasonal average (4,568). 


The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,634, a 16.3 per cent increase compared to February 2023 (8,283). This is three per cent above the 10-year seasonal average (9,352). 


Across all detached, attached and apartment property types, the sales-to-active listings ratio for February 2024 is 22.4 per cent. By property type, the ratio is 16 per cent for detached homes, 27.9 per cent for attached, and 25.9 per cent for apartments. 


Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. 

Even with the increase in new listings however, standing inventory levels were not high enough relative to the pace of sales to mitigate price acceleration in February, with most segments of the market moving into sellers’ territory,” Lis said. “This competitive dynamic has led to modest price growth across all market segments this month, but it’s noteworthy that benchmark prices remain below the peak observed in the spring of 2022, before the market internalized the full effect of the Bank of Canada’s tightening cycle.” 


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,183,300. This represents a 4.5 per cent increase over February 2023 and a 1.9 per cent increase compared to January 2024. 


Sales of detached homes in February 2024 reached 560, an 8.3 per cent increase from the 517 detached sales recorded in February 2023. The benchmark price for a detached home is $1,972,400. This represents a 7.2 per cent increase from February 2023 and a 1.5 per cent increase compared to January 2024. 


Sales of apartment homes reached 1,092 in February 2024, a 17.7 per cent increase compared to the 928 sales in February 2023. The benchmark price of an apartment home is $770,700. This represents a 5.6 per cent increase from February 2023 and a 2.5 per cent increase compared to January 2024. 


Attached home sales in February 2024 totalled 403, a 10.1 per cent increase compared to the 366 sales in February 2023. The benchmark price of a townhouse is $1,094,700. This represents a 4.2 per cent increase from February 2023 and a 2.6 per cent increase compared to January 2024. 


Sara Esmi

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 What Investors Should Know About The New BC Flipping Tax

About the New BC Flipping Tax

Premier David Eby's NDP government has introduced a proactive measure to address speculation in British Columbia's real estate market with the unveiling of the "BC Home Flipping Tax."

Aimed at those prioritizing profits over people, this initiative seeks to bolster housing supply while generating essential tax revenue. Effective January 1, 2025, the tax will target profits from selling residential homes or residentially zoned land within two years of purchase. It employs a progressive scale, starting at 20% in the initial year and decreasing to 10% after 18 months, ultimately phasing out after two years of ownership.


Key Features of the BC House Flipping Tax

Tax Rates:

  • The tax rate starts at 20% for profits made within the first year of ownership.
  • It gradually decreases to 10% after 18 months.
  • After two years of ownership, the tax reduces to zero.

Exclusions:

  • Sales of primary residences within two years can exclude up to $20,000 from taxable income.
  • Exceptions are provided for circumstances such as divorce, death, illness, and relocation for work.

Appeals and Documentation:

  • Procedures for appeal and required documentation are currently under review.
  • Detailed guidelines and necessary forms are anticipated to be available after the legislation's passage.

Effective Date:

  • The tax applies to properties sold from January 1, 2025.
  • It applies retroactively, irrespective of when the property was purchased.


In recent years, British Columbia's real estate market has seen significant growth, attracting investors looking to capitalize on opportunities for profit. However, with the introduction of the new BC flipping tax, investors need to be aware of the implications this may have on their investment strategies.

Understanding the BC Flipping Tax

The BC flipping tax, officially known as the "Speculation and Vacancy Tax," is designed to target properties that are being quickly bought and sold for profit, often referred to as "flipping." Implemented as part of the government's efforts to address housing affordability and speculation in the market, this tax aims to discourage speculative activity and stabilize housing prices.

Who Does It Affect?

Investors and property owners need to be aware of how this tax may impact their investment decisions. The tax applies to residential properties in designated regions of British Columbia, including Metro Vancouver, the Capital Regional District, the Fraser Valley, and certain regions of Vancouver Island. Properties subject to the tax include those that are left vacant or not used as a primary residence for the majority of the year.

Key Considerations for Investors

  1. Tax Rates: The BC flipping tax is levied annually, and the rate varies depending on the owner's residency status and the assessed value of the property. Non-resident owners and satellite families may face higher tax rates compared to British Columbia residents.

  2. Exemptions and Rebates: While the tax may apply to certain properties, there are exemptions and rebates available under specific circumstances. For example, properties used as a primary residence, rented out long-term, or subject to certain rental restrictions may be eligible for exemptions or rebates.

  3. Impact on Investment Strategies: Investors need to evaluate how the BC flipping tax may affect their investment strategies. Those considering short-term flipping or speculative activities may need to reconsider their approach and explore alternative investment options that align with the tax regulations.

  4. Compliance and Reporting Requirements: It is essential for investors to understand their obligations regarding compliance and reporting. Failure to comply with the tax regulations may result in penalties and additional costs, highlighting the importance of staying informed and up-to-date with the requirements.

Seeking Professional Guidance

Given the complexity of the BC flipping tax and its implications for investors, seeking professional guidance from real estate experts, tax advisors, and legal professionals is crucial. These professionals can provide valuable insights, help navigate the tax regulations, and develop investment strategies that optimize returns while ensuring compliance with the law.

Conclusion

The introduction of the BC flipping tax underscores the government's commitment to addressing housing affordability and speculation in the real estate market. Investors need to be aware of the tax implications and adjust their investment strategies accordingly. By staying informed, seeking professional guidance, and understanding their obligations, investors can navigate the changing landscape of the British Columbia real estate market effectively.


Sara Esmi

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New Property Transfer Tax exemptions for first-time buyers and new homes in BC

Exciting news for first-time home buyers in Vancouver, BC!


As part of efforts to enhance housing affordability, the Government of British Columbia is implementing three significant changes to the Property Transfer Tax (PTT) framework. These changes, outlined in the 2024 provincial budget, focus on exemptions within the PTT.

Firstly, the threshold for eligibility for the first-time homebuyers’ exemption will rise from a fair market value of $500,000 to $835,000.

Under this adjustment, the initial $500,000 of the property's value will be exempt from the tax. The phase-out range for the full elimination of the exemption will extend to $860,000, while properties valued below $500,000 will enjoy complete exemption. These modifications will take effect on April 1, 2024.

These adjustments aimed at first-time homebuyers are projected to benefit approximately 14,500 individuals, doubling the previous number, resulting in potential savings of up to $8,000 when purchasing their homes.

Additionally, the exemption for newly built homes, intended for purchasers acquiring a new principal residence, will increase from $750,000 to $1.1 million in fair market value. Properties valued between $1.1 million and $1.15 million will experience a phase-out range for the exemption. This change will also come into effect on April 1, 2024.

Furthermore, a novel PTT exemption will be introduced specifically for the acquisition of new qualifying secured purpose-built rental housing buildings. These buildings must consist of at least four non-stratified apartment units and be designated for rentals for a minimum of 10 years. Additionally, all residential units within the building must be solely used for rental purposes. This unique PTT exemption will be applicable to transactions involving such buildings between January 1, 2025, and December 30, 2030. As homeownership remains unattainable for many due to soaring property prices, this policy aims to stimulate the development of more "missing middle" rental housing units.

The provincial government anticipates these various exemptions will reduce transaction costs by over $100 million per year.

Sara Esmi

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Navigating the Real Estate: A Comprehensive Guide

Buying or selling a property can be a complex and often overwhelming process. Real estate transactions involve a significant amount of money and legal intricacies. To make informed decisions and ensure a smooth experience, it's crucial to understand the guidelines and best practices in the real estate industry. In this blog post, we'll explore essential guidelines to help you navigate the real estate world successfully.

  1. Determine Your Budget: Before you start searching for properties, establish a clear budget. Consider not only the purchase price but also ongoing expenses like property taxes, maintenance, and insurance. Sticking to a realistic budget will prevent financial strain down the road.

  2. Research the Market: Stay informed about the local real estate market. Understand the trends in pricing, supply and demand, and any upcoming developments in the area. This knowledge will empower you to make well-informed decisions.

  3. Choose the Right Real Estate Agent: Selecting a trustworthy and experienced real estate agent is crucial. They can provide invaluable insights, guide you through the process, and handle negotiations on your behalf. Ask for referrals and conduct interviews to find the best fit.

  4. Inspection and Due Diligence: Whether you're buying or selling, thorough inspection and due diligence are essential. For buyers, get a professional home inspection to uncover any hidden issues. Sellers should prepare by addressing necessary repairs and disclosing known problems.

  5. Negotiate Wisely: Effective negotiation is a cornerstone of successful real estate transactions. Be prepared to negotiate the price, contingencies, and other terms. Your agent can play a significant role in this process.

  6. Understand Contracts: Real estate contracts are legally binding documents. Ensure you fully comprehend the terms and conditions before signing. If needed, seek legal counsel to explain complex clauses.

  7. Be Aware of Closing Costs: In addition to the purchase price, there are closing costs involved. These may include fees for inspections, appraisals, legal services, and more. Knowing these costs in advance prevents last-minute surprises.

  8. Consider Future Resale Value: Think long-term. Even if you're buying your dream home, consider its resale potential. Changes in your life circumstances may require you to sell in the future.

  9. Stay Patient: Real estate transactions can take time. Don't rush into decisions or settle for something that doesn't meet your needs. Patience often leads to better outcomes.

  10. Review Financing Options: Understand your financing options, including mortgages, interest rates, and down payment requirements. Shop around for the best loan terms to save money in the long run.

Conclusion: Navigating the real estate world can be a daunting task, but with the right guidance and adherence to these guidelines, you can make the process smoother and more successful. Whether you're a buyer or a seller, being well-informed and prepared is key to achieving your real estate goals.

Sara Esmi

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Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.