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The Lowdown on the High-Priced Vancouver Real Estate Market

Written By Brooke TakharDate 31 Aug. 2016

We love being busy and staging your amazing homes for a quick sale. In 2016 we have been very busy and if you live in the Lower Mainland, you know why – the real estate market has been red hot!

Vancouver is especially attractive to overseas buyers and we definitely understand why. On the west coast we have it all – the ocean, mountains, lakes, a thriving foodie scene, and a variety of friendly neighbourhoods with their own unique personalities.

lowdown on the high priced vancouver real estate market - urban presentations.com

{This property we staged back in May sold in under a week!}

Real estate prices are high and if you are a buyer, it is very common for a bidding war to break out for the property you desire. News headlines worried that there would be an ensuing housing bubble in Vancouver, and that soon local residents would not be able to afford to live in their own city.

The BC government addressed the concern on July 25th with a 15 percent foreign buyer’s tax. This immediately became the talk of the town – what did this mean? Would there be fallout? How would this affect Vancouver and would-be homeowners?

The headlines were ominous (Summer Slump: Metro Vancouver house sales plummet after offshore tax introduced) but how much would this tax truly affect the market?

We spoke to local realtors Jody & Melanie Copple for an inside perspective of the market and we think you will find their observations as interesting as we did.

“Our feeling is that the 15% foreign buyers tax was a poorly executed initiative to cool the overheated local market. There was no consultation to the industry on this and no explanation of why they decided on 15%. It’s totally out of line to assume that all foreign purchasers are sitting on piles of money and that an extra 15% is no big deal.”

Let’s break it down.

1. The media reported a ton of “collapsed deals.” The Copples assure us this data is private so they’re unsure how that could even be reported. In their immediate circle, they found the majority of deals were executed by moving up completion date to before the start date of the tax (Aug 2, 2016) and in one case, it was cheaper for a buyer to fly a local notary to New York to get signatures and complete the deal before the deadline vs paying the tax.

2. They saw an immediate effect on sales/prices of detached homes, with minimal effect on condos/detached homes so far.

3. They are seeing far fewer multiple offer scenarios and over-asking price sales.

4. Some of the data the media is reporting is comparing this year’s sales to last year’s sales for August. Part of the decrease in homes sold this August is that there are very few new listings or supply. In the case of condos, this is (so far) keeping pricing stable.

So what does this mean for homeowners wishing to sell in this market?

“Due to the steep escalation in prices from January 2016 to now, we are finding that many condo owners simply cannot make the move to the next level, so they are stuck. For example, their condos have appreciated but not enough to move up to a townhouse or detached home. Also, due to lack of selection a lot of buyers are scared to list and then not have a home to move to.”

It makes sense that if both buyers and sellers are waiting to see what the final impact of the new tax will be and waiting for the selection to improve before making a move, which can easily exacerbate the supply issue.

What will the future hold? Nobody owns a crystal ball, but like most things, trends from the past can be great predictors.

“We feel that in a few months things will return to close to where they were prior to the tax.

We saw temporary market slow-downs with the introduction of the HST in 2010, with the new mortgage rules in the spring of 2011 and again in 2012. After a brief pause, things return to normal. Bottom line, unless there is a major world event that has deeper impact to the overall economy we feel that due to the lifestyle Vancouver offers, as well as the limited supply of land and property, housing will always be expensive in this city and the real estate market will continue on as per usual.”

Thanks so much for your intelligent and first-hand insight!

If you’re thinking of selling your home and want us to stage it, please contact us anytime. You can also find us on Facebook!