The Real Estate Market is Still HOT!
At least in the townhome and condo market.
Real Estate Board of Greater Vancouver’s President Morrison said in the newest stats report that: “While home sales are not happening at the pace we experienced last year, home seller supply is still struggling to keep up with today’s demand. This is why we’ve seen little downward pressure on home prices, particularly in the condominium and townhome markets.”
See the full report here:
Low supply continues to limit Metro Vancouver home buyers
From the graph above, we can see that due to the lack of inventory compared to the sales volume, the price kept going up (at least in the townhouse and condominium markets).
The new BC Home Partnership program and the new Property Transfer Tax exemption amount will likely encourage more first time home buyers to enter the real estate markets and drive up the demand for entry level condos and townhomes even more.
The BC Government announced it will be increasing the first time home buyer property tax exemption to $500,000, saving first-time buyers up to $8,000 in property transfer tax on the purchase of their first home.
In addition, the Government is investing in housing supply and affordability by:
- Supporting the creation of nearly 5,300 units of affordable and supportive housing.
- Rental assistance programs for low-income families and seniors support over 33,000 households each year.
- BC HOME Partnership program will provide over $700 million in mortgage down payment assistance loans to an estimated 42,000 first-time home buyers over the next three years.
- Increasing the threshold for the first time homebuyers’ exemption from property transfer tax to $500,000 from $475,000.
The BC Government is trying help first-time home buyers get into the red hot real estate market but has not yet address the housing supply situation.
Finance Minister Mike de Jong said “We can’t just focus on getting more people into the market, on its own, without adding to supply, that’s just going to drive prices higher.”
It is taking a long time to get building approvals and the cities have a long backlog of proposed housing units. Currently, there are 69,500 application pending a zoning, rezoning or combined application.
Bob de Wit, CEO of the Greater Vancouver Homebuilders Association, said 69,500 is a “big number” in an area with an average of 20,000 housing starts a year.
In addition, the Government wants developers to pay for municipal amenities like community centres, parks, and skytrain stations but Vancouver Councillor Geoff Meggs said it “sounds like a complex new way for Victoria to impose the entire cost of transportation investments on municipalities.
Anne McMullin, the president of the Urban Development Institute warned that “In pricinple, it makes sense that new development should contribute to the cost of new transportation needs — but costs always get passed along.”