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"You have reason to be a little bit nervous because there's certainly a tide of anti-development sentiment that's building in the market today," Ferreira told about 800 members of the real estate and development community at UDI presentation.


Shifting political winds could exacerbate an already-softening Metro Vancouver housing market buffeted by recent government policies and higher borrowing costs, said an industry analyst at the Urban Development Institute’s annual real estate industry outlook on Tuesday.


Michael Ferreira, principal of Urban Analytics, warned that a number of Metro Vancouver municipalities could take on an anti-development slant after the Oct. 20 election.


“You have reason to be a little bit nervous because there’s certainly a tide of anti-development sentiment that’s building in the market today,” Ferreira told about 800 members of the real estate and development community at the UDI presentation.


“I think a lot of the candidates are looking to take advantage of that and are catering to populist rhetoric.”


Across Metro Vancouver, housing affordability and density are key issues for many municipalities, with some candidates and parties critical of densification and some calling for a “pause” on development, which, argued Ferreira, would be misguided.


“Just when we are getting to the point of seeing more supply come on the market and potentially put downward pressure on pricing, that’s when some of the candidates are suggesting they’re going to cut back.”


Other candidates and parties have also expressed commitments to create more affordable and market rental housing as a solution to the housing crisis.


Ferreira said an infusion of rental housing would have an immediate impact on price. But he warned that campaign promises of a rent freeze or tying rent increases to a unit, instead of a tenant, could make some projects in the pipeline “unviable.”


He was also critical of the NDP’s provincial task force which recommends tying annual increases to inflation.


“It may win political points in the short term,” he said of the NDP’s plan, but will result in lower rental supply and make developers less inclined to build.


Ferreira said there was a sense of frustration among rental developers. Many projects were bogged down by a slow approval process, with one developer estimating it’ll take five years to complete a rental project, while some projects get scrapped or put on hold because the city demanded such unfavourable terms the developer couldn’t make the project work, he said.


“They feel like the city is just not interested in facilitating new rental development even though we have sub-one per cent vacancy rate throughout the region.”


Ferreira, who crunches data on new condos, highlighted some bright spots for the industry.


The pre-sale market remains healthy, with large projects such as Gilmore Place in Burnaby, Linea in Surrey and smaller projects along the Cambie Corridor and at UBC reporting strong demand.


These projects were done by local, experienced developers who know their market and priced their products right, Ferreira said, noting that Onni priced units at The Gilmore’s first tower at just under $1,000 per square foot, less than the $1,100 per square foot price of a nearby project that had launched earlier.


The re-sale market, however, is a different story.


The Real Estate Board of Greater Vancouver reported 1,595 sales in September, a 43 per cent drop compared to the same month last year. Sales-to-listings ratio have also dropped, particularly for condos and townhouses, which are now in a balanced market. So far, this hasn’t translated to price drops.


“We haven’t seen a lot of actual declines in prices,” Ferreira said. “But we’ve seen some softening in the form of incentives being offered to buyers” such as decorating allowances worth between $30,000 to $60,000, reduced deposit requirements, or in the case of one Langley condo project, an offer to pay the buyer’s first year’s mortgage.


“If we continue to see softening in demand and increase in supply, we are going to see a drop in buyer urgency and likely start to see more softening in prices,” said Ferreira.


“But I don’t anticipate a huge drop in prices, not a massive correction that we’ve seen in the past.”


 Cheryl Chan Updated: October 17, 2018


https://vancouversun.com/business/real-estate/urban-development-institute-hosts-annual-event-on-real-estate-industry-outlook





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Tax ranges from 0.5% on secondary homes left vacant by B.C. residents, to 2% on foreign-owned properties

CBC News · Posted: Oct 16, 2018 1:10 PM PT | Last Updated: October 16


B.C.'s finance minister has introduced legislation to move ahead with a controversial speculation tax on vacant or underutilized properties.


The bill ends months of speculation about how the province planned to use the new levy to help deal with runaway housing prices in some B.C. communities, outlining a range of tax rates from 0.5 to two per cent and a number of exemptions.


If the legislation is passed, the new tax will apply to all properties in designated regions of B.C. These include most parts of Metro Vancouver and the Capital Regional District (excluding the Gulf Islands), along with Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo and Lantzville.


Homeowners who live at their properties — or rent them out — will receive an exemption by filing an annual declaration form.


    Higher taxes no solution to Vancouver's real estate crunch, says study



For the remaining properties, a tax rate of 0.5 per cent of the assessed value will apply for 2018.


In 2019 and subsequent years, B.C. residents with vacant or underutilized properties will continue to pay that rate, while Canadian citizens or permanent residents who are not B.C. residents will start paying one per cent.

Foreign homeowners will pay more


Foreign homeowners or "satellite families" who make 50 per cent of their income outside B.C. will pay two per cent on all properties, unless they rent them out.


The goal is to prevent housing speculation and help turn vacant properties into rentals, said Carole James, B.C.'s finance minister.


    B.C. municipalities ask for power to opt out of speculation tax, finance minister says no


"As a government, we have a responsibility to act, to make sure that people can afford a home in the communities where they live and work," she said. "The speculation and vacancy tax is a critical piece if we want to moderate our overheated housing market."


Some opposed mayors in regions where the tax is set to apply had called on the finance minister to allow an opt-out clause, but James declined.


"When you face a major provincial crisis, it is the responsibility of the provincial government to act, not to let municipalities pick and choose about whether they want to address affordable housing," James said.

'NDP arrogance and hypocrisy'


However, the opposition Liberals say the tax punishes people in B.C. who want to have a retirement home and it will do little to improve housing affordability.


    Opinion

    Layers of B.C. taxes and fees add up to 26% 'tariff' on new home costs


"This is the height of NDP arrogance and hypocrisy," said Liberal leader Andrew Wilkinson.


"Our goal is to defeat this bill because it is a phony tax. It accomplishes nothing except to grab revenue for the NDP."


Green Leader Andrew Weaver, who has been critical of the tax in the past, said he's still reviewing the fine print to determine if his concerns have been addressed, and any changes that may be necessary.


"I still have concerns that Canadians are not being treated equally and that there is an insufficient role for local governments in determining what happens in their communities," Weaver said in a statement.

Exemptions


The legislation also includes a number of exemptions for what the province calls special circumstances, including major home renovations and divorces.


Properties that are under development or renovation are also exempt — something that will keep the tax from discouraging more housing to come online, James said.


It's estimated that more than 99 per cent of people in B.C. won't pay the tax, James said.


https://www.cbc.ca/news/canada/british-columbia/speculation-tax-tabled-by-bc-government

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KELOWNA, B.C. – October 2, 2018. Despite slower sales activity of 585 residential sales in September compared to 709 the previous month and 740 last year, average price across the region of Revelstoke to Peachland inched up 5% over August and 8% over last September, reports the Okanagan Mainline Real Estate Board (OMREB).


“We’re seeing a shift across the region with all signs, save average price, pointing to a market continuing to transition from a sellers’ market to one that would favour buyers and sellers more equally,” comments OMREB President Marv Beer.


“While average price, at $534,943, crept past both the previous month’s pricing and this time last year, houses are sitting on the market for longer so it’s likely only a matter of time before we start to see downward pressure on price,” says Beer. Beer was quick to note that average price can swing from month to month, depending on the mix of higher and lower-priced homes that sell in that timeframe.


Other indicators of a normalizing market include an increase in the time it takes to sell homes, with 90 average days on market for September, compared to 78 last month and 78 last year. Rising housing inventory is another signal, now 29% higher than a year ago with more supply slated to come on-stream within the next year or two.


“More supply means buyers have more choice and, as a result, tend to become more discerning. This can ultimately can affect price, however real estate markets are never quite that simple, as other factors are also at play,” says Beer.


Already checked by higher interest rates, the market may react to predictions of more hikes, now more likely with the US Federal Reserve’s most recent rate increase and the Bank of Canada’s pledge that rates will rise in October. Government policy changes, such the proposed speculation tax slated to be voted on in October can also have a dampening effect. Conversely, the market is bolstered by strong provincial economic fundamentals such as low unemployment and demographics that include millennials ready to purchase their first home.


Looking at buyers of homes in the region, the latest results from home sales closing in August reveals a strong showing of first-time buyers at 16%, although two-parent families with children topped the list at 30% of buyers. Those buying for revenue or investment purposes were 14%. Typical for the region, the largest buyer group, at 56%, comprised those who already live in the area, with the next largest groups being those from the Lower Mainland/Vancouver Island at 21% and those from Alberta at 12%. Foreign buyers were just 1%.


Beer notes that buyer profiles for the region have remained consistent over the eight years of data collection. “While the BC government would have us believe that speculation by foreign buyers and those from other provinces is making homes here less affordable, the reality is that at 84%, the vast majority of buyers in this area are BC residents, and that figure changes only slightly year over year” says Beer adding “Clearly, the solution to greater affordability lies elsewhere.


OMREB serves three diverse markets within the region: the Central Okanagan Zone (Peachland to Lake Country), the North Zone (Predator Ridge to Enderby) and the Shuswap- Revelstoke Zone (Salmon Arm to Revelstoke). For detailed statistics, by zone, visit www.omreb.com.


Media Release


OMREB is a member-governed not-for-profit association representing more than 1300 REALTORS® and 89 real estate offices within the southern interior region of British Columbia (Peachland to Revelstoke). The Board is dedicated to providing leadership and support to its members in their pursuit of professional excellence.


DISCLAIMER: Monthly Sales statistics are based on the sales reported by real estate offices on or before the last day of the month. Sales not reported by month end and collapsed sales are reflected in the subsequent month’s statistics.


All OMREB listings are published in the MLS® Real Estate Review and MLS® Commercial Review magazines available at all real estate offices and various locations in the Central Okanagan, North Okanagan, the Shuswap and Revelstoke areas. For comprehensive Board-wide statistical information, please visit our local public site: www.omreb.com

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