Well, winter has officially arrived & the festive season is upon us. Hopefully, it will be spent with loved ones accompanied by plenty of cheer, rest & relaxation, & a healthy recharging of our batteries in anticipation of the New Year.
I felt it would be prudent to mention some critical information which may directly or indirectly affect you in various ways.
Here is what is happening.
1. The New Year brings us another upcoming change to mortgage lending guidelines taking effect January 1st, 2018. This is the much referred to "Stress Test". It is nothing new for those purchasing in the past with less than 20% down. But for those WITH a 20% or GREATER down payment, it may result in a reduction of approx. 20% or more in borrowing power ie someone who can qualify for $1,000,000 today may only qualify for $800,000 on January 1st, 2018 or later. It will be interesting to see how this will affect the market as there has been plenty of activity under the one million dollar price cap. You can read more here: https://globalnews.ca/news/389742/new-mortgage-rules-2018-canada-guide/
2. Vancouver's Empty Homes or Vacancy Tax. Every owner of residential property must submit a declaration prior to February 2nd, 2018. If your home was vacant for more than six months in the past calendar year, you may be subject to a tax of 1% of the property's assessed taxable value. An interesting story which arose out of this, fell into what seemingly was a grey area. It involves an owner of a vacant lot in Kerrisdale which never had a structure on it. It appears that the City is insisting that the owner either pays the tax or builds a home on it. Fair enough, but if a property is not meeting its said potential, then it stands to reason that the next logical step in the process is to tax every property with a detached home that does not have a laneway home on it. Anyway, there are exceptions to the tax such as if your property transferred title in the year (either bought or sold). You can read more here:
3. The Superintendent of Real Estate is implementing new rules which will come into effect on March 15th, 2018. The vast majority will mainly revolve around disclosure & agency issues. The latter will prohibit dual agency in almost all cases except some in remote areas of the province. Dual agency, or "double ending" as it is oftentimes referred to, is the act of one agent representing both the buyer & the seller in the same transaction. Steps such as these have prompted me for years to state that it will eventually lead to a much different real estate landscape. One in which Brokerage A will only be able to represent buyers while Brokerage B will only represent sellers. For example, as an owner of a company, if I wished my firm to service both buyers & sellers, I would have to set up two separate offices: one TRG Realty office specifically for buyers & a second TRG Realty office strictly for sellers. Realtors would then have to choose whom they would want to exclusively work with: buyers or sellers? This is obviously looking to the future but I have witnessed the complexion of this industry change considerably over the course of a career spanning nearly 30 years yet always with an eye to evolving in order to adapt & continually help my clients succeed.
On August 2nd, 2016, Metro Vancouver's Foreign Home Buyer Tax abruptly came into effect. I'm not aware of any definitive stats that are available to indicate this taxes entire effect on the local market over the past 16 months. Nevertheless, there have been whispers within real estate circles & elsewhere that the 15% tax MAY increase & possibly be doubled to thirty per cent. Let me add that there is nothing "concrete" to substantiate this. Therefore, please take it with large bags of salt.