Breaking Down the Housing Debate

Everything you need to know ahead of the 

2019 Federal Election

The 2019 federal election is fast approaching, and the housing debate continues to be a hot topic in the country. A national housing strategy that’s assessed annually and updated based on economic markers and buying trends is crucial to the longevity of Canada’s housing market.

Over the last year and half, real estate has made headlines: interest rates, high home prices, affordable housing strategies, and government intervention with new regulations such as the mortgage stress test.

Many Canadians, especially millennials, new immigrants and those employed in the so-called “gig economy” feel home ownership is becoming less tangible by the day. While politicians of all stripes acknowledge the mounting urgency of affordable housing, few are offering any timely or compelling solutions.

To-date, Canada’s housing affordability issue remains rampant. The government has made efforts to help Canadians effectively manage their household debt as a way to improve affordability, with the mortgage stress test, which I am 100 per cent supportive of – but the stress test has done more harm than good and is simply unrealistic based on economic forecasts.

As a country, we must incentivize and support homebuyers – especially first timers who are currently precluded from entering the housing market. We can’t let policies become barriers to the Canadian dream. We need a strategy to resolve our housing challenges in the long-term versus Band-Aid solutions to appease political agendas in the short-term.

To this end, it’s important that voters consider the different viewpoints of the parties as well as their own, as they prepare to cast their vote on October 21. Here’s an overview of the biggest housing hurdles to be addressed, as well as the party positions thus far.

Housing affordability and cost of living are among voters’ top concerns, making this the number-one focus for all party candidates in the 2019 Federal Election. Canadians seek a government that will address their housing concerns and prioritize the health of our economy. As election day nears, I encourage Canadian voters to educate themselves on the issues, and consider their candidates’ answers to these questions, to help inform their decisions:

1. How will you address the mortgage stress test to ensure it effectively addresses housing affordability?
2. How will you encourage millennials and first-time homebuyers to purchase homes?
3. What’s the plan to create more affordable housing across the country – particularly in hot markets such as Toronto and Vancouver?

Housing debate topics up for discussion – and action

HOUSING SHORTAGE

Between the lack of rental housing, supply of affordable housing and less incentive for developers to build more, Canada is experiencing a serious housing shortage. This is particularly true in our two biggest markets, Vancouver and Toronto, where the average cost of living continues to tick upward, and residents are left scrambling for affordable alternatives. Candidates must explore solutions that incentivize developers to produce more supply, but also provide options to citizens that enable them to purchase homes more easily and affordably.

SHORT-TERM RENTALS

Short-term rentals have removed approximately 31,000 spaces from the rental market, having a big impact on the long-term supply. While Canadians struggle to purchase affordable homes, they also struggle to find housing alternatives in the short-term, with the average one-bedroom in Toronto costing $534,349. This trend is not going away and must be addressed at the federal level now. From an investor standpoint, short-term rentals make sense, but in the context of liveability and neighbourhood dynamism, they pose many challenges for Canadians who looking for a place to call “home.” Governments need to consider regulation to ensure both stakeholders are well taken care of, and that the issues of both parties are addressed appropriately and effectively.

MORGAGE STRESS TEST

Homebuyers deserve an opportunity to climb the property ladder as much as previous generations, but the mortgage stress test in its current form is an obstacle in what has become a far-fetched dream. I am 100 per cent supportive of responsible debt levels and policies to ensure that goal, but let’s be realistic. Even with the recent modifications to the mortgage stress test, it still isn’t solving the affordability crisis in our country. Quite simply, the circumstances under which the stress test was first introduced are no longer a reality. As we look toward October’s election, it’s crucial to consider how government intervention might help or hinder Canada’s housing market. At the very least, Canada’s next government needs to reassess the stress test.

Every party has made plans and promises in the great housing debate. Will it be enough?

Justin Trudeau’s Liberals1

On the Mortgage Stress Test:

• Undertake a review of escalating home prices in high-priced markets – like Vancouver and Toronto – to determine whether speculation is driving up the cost of housing.
• Increased the amount first-time buyers can withdraw from their RRSP’s to $35,000 from $25,000 in budget 2019
• Earmarked $1.25 billion over the next three years for First-Time Homebuyers’ Incentive (which launched September 2, 2019)6
• On September 12, 2019, promised an expansion of the First-Time Home Buyer Incentive (FTHBI) program to cover home values up to $789,000 in hot markets of Toronto, Vancouver and Victoria if elected.7
• Up to $40,000 in interest-free loans for renovations to improve energy efficiency of homes. Grants of up to $5,000 to those buying zero-emissions new homes.
• Addressing house-price inflation with a one-per-cent annual vacancy and speculation tax on homes held by non-residents or non-Canadians.

On Short-Term rentals:

• Increase the new residential rental property rebate on the GST to 100 per cent, eliminating all GST on new capital investments in affordable rental housing.

On the Housing Shortage:

• Provide $125 million per year in tax incentives to increase and substantially renovate the supply of rental housing across Canada.
• As part of a new, 10-year investment of nearly $20 billion in social infrastructure, prioritize significant new investment in affordable housing and seniors’ facilities.

Andrew Sheer’s Conservatives

On the Mortgage Stress Test:

• Promised to scrap the tests on mortgage switches and consider additional measures that will improve housing affordability.2
• Criticized the Liberals’ Carbon Tax, claiming that it will further erode affordability/cost of living, pushing the dream of home ownership even farther.3

On the Housing Shortage:

• Will help get new homes built across Canada, addressing housing shortages and affordability issues by cutting red tape, shortening timelines and bringing down costs. 3

Jagmeet Singh’s NDPs

On the Mortgage Stress Test:

• Double the homebuyer’s tax credit to $1,500 for first-time buyers.
• Re-introduce 30-year terms to Canada Mortgage and Housing Corporation (CMHC) insured mortgages for first-time homebuyers.

On Short-Term rentals:

• Remove GST/HST on the construction of new rental units.

On the Housing Shortage:

• Create 500,000 units of quality, affordable housing in the next 10 years.

Elizabeth May’s Green Party

On the Housing Shortage:

• New developments will have a minimum of 20 per cent affordable homes.
• Push for innovative solutions such as “tiny homes,” laneway housing, co-housing and secondary suites.
• Invest an additional $200 million over projected increases in the 2018 budget in funding for shelters, social, co-op and supportive housing.

Real estate continues to be one of the safest and most reliable financial investments for Canadians. As real estate professionals, it’s our duty to help potential homebuyers navigate this tricky landscape and support them in determining their best options. We urge governments to develop a national housing strategy that addresses all issues relating to affordability, or risk pushing the Canadian dream of home ownership that much farther away for all.

Sources:
1 Our plan for affordable housing, liberal.ca
2 Conservative leader vows to end stress test on mortgage switches, whichmortgage.ca
3 Scheer says we are in a cost-of-living crunch, stcatharinesstandard.ca
4 2019 federal election platform guide: Where parties stand on everything, macleans.ca
5 Our platform, gpo.ca
6 2019 federal election platform tracker: Where the major parties stand so far, bnnbloomberg.ca
7 Trudeau Liberals promise to expand first-time homebuyers program if elected, globalnews.ca

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September 2019 - Fraser Valley Housing Market Statistics

Property sales in Fraser Valley have recovered bringing market into balance

For the third straight month, home sales in the Fraser Valley surpassed 2018  levels bringing the market back in line with long-term averages. The Fraser Valley Real Estate Board processed 1,343 sales of all property types  on its Multiple Listing Service® (MLS®) in September, a 3.5 per cent increase  compared to sales in August 2019, and a 29.8 per cent increase compared to the  1,035 sales in September of last year. Darin Germyn, President of the Board, says, "The market's return to balance is  good news for both buyers and sellers, however it's important to put the 30 per   cent year-over-year increase in sales into context. September's sales went from amongst the worst in 10 years to just above our 10-year average."   "Home prices are still dropping compared to a year ago, but on a month-to-month  basis, prices are moderating because supply is shrinking. Our incoming supply of  new listings has dropped consistently for the last four months pushing our total  inventory in the Fraser Valley to the lowest it's been since April, which has had an  impact on prices."   There were 7,946 active listings available in the Fraser Valley at the end of   September, an increase of 3.9 per cent compared to September of last year and   a decrease of 1.2 per cent compared to August 2019. The Board received  2,769 new listings in September, a 17.5 per cent increase compared to August  2019's intake of 2,357 new listings and a 6 per cent decrease compared to  September of last year.   Germyn adds, "Financing is still a challenge for many clients, but fortunately in  a balanced market like this, REALTORS® have the time to work with clients and  advise them of the best strategies for them, whether they are buying or selling." MLS® HPI Benchmark Price Activity Single Family Detached: At $950,000, the Benchmark price for a single-family detached home in the Fraser Valley decreased 0.4 per cent compared to August 2019 and decreased 3.9 per cent compared to September 2018. Townhomes: At $520,000 the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley decreased 0.3 per cent compared to August 2019 and decreased 4.8 per cent compared to September 2018. Apartments: At $405,500, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.9 per cent compared to August 2019 and decreased 7.6 per cent compared to September 2018. For the Fraser Valley region, the average number of days to sell an apartment  in September was 41, and 37 for townhomes. Single family detached homes  remained on the market for an average of 46 days before selling. For the FULL Statistics Package click HERE Know someone moving ANYWHERE in the WORLD? Call us today--We know the BEST agents everywhere!!

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What You Should Know about the Fall Real Estate Market

What You Should Know about the Fall Real Estate Market

As Canadians prepare for the busy fall real estate market ahead, the decision on whether to buy or sell a home this year will be mired in more than the typical uncertainties that come with a transaction of this magnitude. Housing affordability, interest rates and the mortgage stress test were big newsmakers in 2018 and 2019, and will continue to make headlines for at least another six weeks, with the looming federal election on October 21, and lots of housing issues and policies up for debate between now and then.

So, what can consumers expect from fall real estate? Those seeking a long-range forecast will have to wait at least until election day and likely well beyond, to see what party takes power, which policies they move ahead with and how these changes play out in real time. Uncertainties aside, here’s what we do know:

Canadian homebuyers seem to be getting used to the new mortgage rules, and there have been some important changes at the federal level that are expected to impact homebuyers and in turn, home sellers:

• The mortgage stress test qualification bar was recently lowered from 5.34 to 5.19 per cent, increasing purchasing power – albeit only slightly.
• The First Time Home Buyer Incentive (FTHBI) took effect on September 2, whereby eligible first-timers can get a shared-equity government loan to help with the down payment.
• The Home Buyers’ Plan (HBP) withdrawal limit was increased from $25,000 to $35,000, toward the purchase of a first home.
• Rumours of interest rate drops are circulating. The Bank of Canada’s interest rate announcements are a trending topic worth watching every six weeks.

Beyond these factors, fall real estate does experience some seasonal effects. For home sellers, the yet-favourable weather draws crowds to open houses, and many homebuyers experience FOMO (fear of missing out) at the prospect that their days are numbered before the typical winter lull in listings. This often results in increased activity.

However, this habitual seasonality is at the mercy of market conditions, which will have a greater effect on the upcoming fall real estate market than solely the time of year. Is it a buyer’s market or a seller’s market? Demand will be the biggest factor in the buyer’s and seller’s bottom line.

Homebuyers and sellers need to remember that all housing markets are local, and it’s more important than ever to tap into the ground-level expertise of a professional real estate agent, who can best advise you on market trends, and counsel you on the timing of the transaction, and the price.

Buying or selling a home is probably the biggest transaction you’ll make in your lifetime. Don’t leave anything to chance. RE/MAX is the most widely recognized real estate brand in the world, and for more than 20 years it has been the leading real estate organization in Canada. By receiving the best training, administrative and marketing support for the RE/MAX network, brokers and agents can focus on what matters most: real estate.

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Fraser Valley housing market continues to stabilize...

Fraser Valley housing market continues to stabilize as sales pick up compared to last year

For the second month in a row, home sales in the Fraser Valley surpassed 2018  levels bringing the market closer to historical norms. The Fraser Valley Real  Estate Board processed 1,297 sales of all property types on its Multiple Listing  Service® (MLS®) in August, an 11 per cent decrease compared to sales in July  2019, and a 12.3 per cent increase compared to the 1,155 sales in August of last  year. Darin Germyn, President of the Board, observed, "Compared to last year, this  August has been quite robust. All property types are selling and we're seeing  a resurgence in the single-family detached market. Across North Delta, Surrey   and Langley, sales are up over 25 per cent."   "It's great to see. We're returning to a normal, steady market. Our sales, new  listings and number of active listings in August were all slightly below the  10-year average."   There were 8,040 active listings available in the Fraser Valley at the end of   August, an increase of 9.6 per cent compared to August of last year and a   decrease of 3.6 per cent compared to July 2019. The Board received 2,357  new listings in August, a 15.7 per cent decrease compared to July 2019's  intake of 2,797 new listings and an 8.5 per cent decrease compared to  August of last year.   Germyn adds, "Inventory has stopped growing as demand has picked up, which  is why we're also seeing prices moderate. Last month, prices of typical homes  in the Fraser Valley were on par with prices from six months ago." HPI® Benchmark Price Activity Single Family Detached: At $954,100, the Benchmark price for a single-family detached home in the Fraser Valley decreased 0.3 per cent compared to July 2019 and decreased 5.4 per cent compared to August 2018. Townhomes: At $521,400, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.1 per cent compared to July 2019 and decreased 4.9 per cent compared to August 2018. Apartments: At $409,200, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.1 per cent compared to July 2019 and decreased 7.7 per cent compared to August 2018. For the Fraser Valley region, the average number of days to sell an apartment in August was 45, and 36 for townhomes. Single family detached homes remained on the market for an average of 44 days before selling. For the FULL latest Statistics Package click HERE Visit our web site for more great information, and to  view our Team Listings www.gelderman.ca Know someone moving ANYWHERE in the WORLD? Call us today--We know the BEST agents everywhere!! Serving Abbotsford, Chilliwack, Mission, Langley, Surrey and the WORLD! Office Phone: 604-743-7653

Should You Buy Real Estate in Vancouver?

Should You Buy Real Estate in Vancouver?

Vancouver is located in the balmy Lower Mainland of British Columbia. It has the highest population for the province, but even at 600,000 people, that is still far less than most major urban centres. As a coastal seaport city, it has warmer year-round temperatures than the rest of Canada as well as stunning land, sea, and mountain views that are hard to find anywhere else.

All of this makes it ideally situated for those who want an urban life close to outdoor activities. So, should you buy real estate in Vancouver?

Livability

Vancouver ranks high when it comes to livability. Many of the preferred neighbourhoods such as the West End, Kerrisdale, and Main offer excellent amenities like retail and restaurants. They are also close to parks and have excellent walkability ratings. If you don’t want to walk, there is also easy access to public transit.

When buying a home, Vancouver ranks high for the following livability factors:

• Transit
• Green space and parks
• Schools
• Biking and walkability

It ranks medium for:

• Employment opportunities
• Shopping
• Economic development
• Medical care

Of course, it is ranked low for housing affordability, but that is no surprise.

The Market

Buying a single-family house in the City of Vancouver market is unreachable for most people, according to MoneySense. However, if the average detached house price of $1.7 million is within your budget, now could be an excellent time to buy as price drops are happening.

MoneySense reported home sales dropped to a 20-year low in April 2019, according to the Real Estate Board of Greater Vancouver (REBGV). A slowdown in sales and an increase in inventory is seeing real estate housing prices for detached homes at the lowest since 2016. When you compare the home prices in East and West Vancouver, the benchmark for a detached house in the east is down 12.1% at $1,357,200, while the west is down 13.4% but still sits at a whopping $2,948,400. This translates into a decrease between $177,000 to almost $500,000 from 2018.

However, according to Vancouver Courier, the benchmark price in June for all property types combined finally slipped below the $1 million to $998,700, a 9.6% decrease from June 2018. This is the first time since May 2017 that the price has been below $1 million.

Condos in Vancouver

Vancouver Courier also reported that condo sales in Metro Vancouver are seeing an acute decline, with total condo sales in June at 941 units. That marks a 24.1% decrease from 2018. As well, the benchmark price for a Metro Vancouver condo is 8.9% lower from June of last year and 1.4% lower than May 2019. The average condo price is currently sitting at $654,700.

The Millennial Element

Millennials make up the largest home-buying population. With this in mind, many sellers are trying to target millennials with their marketing approach. In Vancouver, things can get pretty competitive, so having a selling strategy can be helpful.

For millennials, these condo prices certainly work out in their favour. Since millennials are the most dominant demographic in Vancouver, if you are in this age group, you might look to the condo market for your first home.

Condos tend to offer a more tech-friendly and environmentally conscious option as well. Some of the things that might attract millennials to Vancouver condos would include:

• Green, energy-efficient homes: The green home is a must for a generation who is very concerned about the climate crisis. Condos offer a reduced ecological footprint in hand with improved insulation, efficient lighting, and updated plumbing systems.
• Smart, connected homes: Smart homes are becoming more common in condos, including light controls, home security systems, and smart thermostats.
• Entertaining spaces: Open, usable spaces are ideal for entertaining, not to mention a stunning waterfront view. This, of course, can up the price tag.
• The neighbourhood: Vancouver areas can be closer to work, green spaces, and parks.

All of these reasons, along with decreasing prices, point at condos as a more realistic option for first-time buyers in the Vancouver housing market regardless of age.

Best Vancouver Areas

The best places to live in Vancouver, include hidden gems Main, Mount Pleasant, Downtown Vancouver West, as well as Renfrew-Collingwood. They offer great neighbourhoods, a stable supply of housing inventory, and affordable prices.

According to MoneySense, the three hottest neighbourhoods in Vancouver are:

1. Marpole

This area offers the best value much because it is still transitioning. So, you can still get in on the ground floor while the neighbourhood gentrifies. It could take another five years or so before it has the amenities you expect, but its potential alone makes the area a good choice for buyers. Although there are better areas, you’ll pay 25% less for the average-priced home compared to most Vancouver West areas. In the past five years alone, properties have soared in value by 116%.

2. Kitsilano

If you are set on living in Vancouver West, Kitsilano is another option. You’ll be looking at a much higher price tag with a 2018 average price of $2,615,000. However, you get what you pay for: a far better sense of community than Marpole in hand with diversity for shopping and dining, an easy commute, and good walkability. It is also close to the beach and offers mature trees and well-maintained gardens.

3. Knight

This South Vancouver area flanks Knight Street from 16th Street in the north and either 49th or 54th Street in the south. Homes here are more affordable at $1.6 million. It is diverse with culture and in mid-gentrification. However, if you are not a fan of the box-like houses built between the mid-60s to mid-80s, you may not be happy here. There will be the odd custom-build or townhome available, but for the most part, you’re looking at the “Vancouver Special” as the most common find.

These homes tend to need some love, which can offset the price. The area does offer an easy commute to downtown Vancouver. It might be a DIYers dream, or you can add renos into the math to get a more realistic look at the true price. As a bonus, there are growing amenities, including a relatively new community centre to meet the needs of this family-oriented area.

Vancouver is a pricey area, but buyers will always have their sights set on it. Condos and the less-developed communities could offer opportunities for some buyers to get their foot in the door of the Vancouver real estate market. A real estate agent can help you navigate the market to find the best bet for your budget.

Buying or selling a home is likely the largest and most important transaction you’ll ever make. That’s why so many trust RE/MAX: the most widely recognized real estate brand in the world. For more than 20 years, RE/MAX has been the leading real estate organization in Canada. By providing the best training, administrative and marketing support, brokers and agents are free to focus on what they do best: sell real estate.

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