MARIE & KIM TAVERNA

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The below letter from President J. Darcy McLeod was sent to our media contacts this afternoon.

Will more taxes solve housing affordability challenges? History says no and so do we.

The rising cost of homes in our region is well-documented. Metro Vancouver home prices have increased nearly 80 per cent since 2005. Detached home prices have increased over 100 per cent.

We worry about how our children can afford a home and how the most vulnerable among us can find basic shelter. These concerns have led to public debate about possible solutions.

One suggestion is for government to introduce new taxes. Some believe government should tax non-Canadian investors who buy properties. Mayor Robertson believes there should be a "luxury housing" tax on the sale of the most expensive homes in Vancouver.

We believe more taxes won’t help. Taxes bring unintended consequences. There’s little to no evidence that a luxury or foreign buyer tax would make homes more affordable. 

History tells us that taxes like this fail to have the desired impact and succeed in permanently adding to government coffers.

In 1987, the provincial government implemented what was advertised as a “wealth tax”. It was supposed to apply to the sale of the most expensive five per cent of homes sold in BC. It's been 28 years since that tax was introduced and the thresholds have never been adjusted for inflation. 
           
Today, that tax is known as the Property Transfer Tax (PTT). It’s applied to 95 per cent of all residential property sales in the province. This tax makes housing less affordable. 

The home is where many people’s financial net worth resides. It's one of the last major assets that residents can sell and not pay a tax on the revenue. A little mentioned fact is that we already have tax disincentives for foreign owners. If a foreign home owner wants to sell a property in Canada, they are unable to receive a capital gains exemption.

The picture of affordability and home ownership is changing in Metro Vancouver. Our region's affordability challenges are complicated and, unfortunately, there isn't a single action that can solve them. Economists will tell you that offshore investment is a factor in today’s market. To what extent, no one has the data to know. 

What we do know is that local conditions have a much more significant impact. We live in one of the most beautiful, progressive and prosperous areas of the world. There are more people who want to live here than there are homes available. This causes prices to rise. 

The natural solution would be to create more supply, but we're constrained by mountains to the north, an ocean to the west, and a border to the south. 

Despite the headlines, the majority of home sales in Metro Vancouver are not $1-million and beyond. Based on our Multiple Listing Service (MLS) statistics, nearly 70 per cent of all sales in the region last year were below $800,000. 

The price of condominiums today ranges between $200,000 and $600,000 depending on size and location. Townhomes range between $300,000 and $800,000 in the region.

Detached homes in the City of Vancouver are at the high-end of our market. Recent activity has pushed homes on the Vancouver Westside above $2.5 million. 
           
It’s a different story in neighbouring communities. The benchmark price of a detached home in Maple Ridge today is $499,100; in Ladner the benchmark price is $713,200; in Coquitlam the benchmark price is $845,400.

Affordability challenges exist. But there are also more options and aspects to the story than is typically discussed in the media. Certainly more than the mayor is putting forward.

Sincerely, 

J. Darcy McLeod
President of the Real Estate Board of Greater Vancouver

 

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Buyers Seize Opportunities in Flourishing Recreational Property Market

2015 Recreational Property Report from Royal LePage shows stronger demand nationwide

Toronto, ON, June 4, 2015 – For the second consecutive year, the recreational property market got off to a slow start in 2015, as harsh weather delayed sales activity in most regions until well into the spring buying season. Brokerages and agents that specialize in cottage, cabin or chalet properties are now experiencing a rush of activity as buyers make up for lost time, according to the 2015 Royal LePage Recreational Property Report released today. Unlike 2014, when the extended winter dampened total sales volumes, increased activity levels in mid to late spring 2015 show that buyers had merely delayed purchase decisions this year versus putting them off entirely. The exception to this is in Alberta, some border areas of eastern B.C. that cater to Albertans, and in Newfoundland, where a depressed energy sector has reduced activity levels and put downward pressure on prices.

The Royal LePage Recreational Property Report compiles information from a cross-Canada survey of brokers and agents who specialize in the recreational real estate market. Advisors across the country are reporting a surge of interest from buyers who have already absorbed a good deal of the available inventory, including many listings that sat unsold last year. In spite of another long winter, buyers have come out in droves in late spring, encouraged by asking prices that have remained relatively flat, year over year. However, brokers warn that prices could begin to climb again as new inventory has not kept up with sales volumes.

“The dream of recreational property ownership is very much alive and well across the country,” observed Phil Soper, president and chief executive of Royal LePage. “Dominated primarily by buyers in their 40s and 50s with families, these are people who are seeking to re-create the idyllic weekends and summers of their youth. Looking ahead, many see their current weekend getaway as a future full-time residence, both as a base for ‘work from home’ arrangements as they become empty-nesters, and onward into retirement.”

“Today’s low interest rate environment has supported discretionary, aspirational purchases in a number of sectors,” continued Soper. “Our agents that serve the urban luxury home market have been extremely busy this year. Further, adult Canadians have accumulated considerable wealth. They are buying luxury automobiles and products like expensive smartwatches in record numbers. While a cottage is clearly a non-essential purchase, in many ways it’s less selfish, as the benefits of a country get-away accrue to the entire family.”

“In a roundabout way, the fall in oil prices is supporting the recreational property market this year,” concluded Soper. “Cheaper gasoline makes the prospect of a weekend commute to the lake a more affordable proposition. And cheap oil means a lower Canadian dollar, which has more people looking at Muskoka, Tremblant and the B.C. interior and fewer casting covetous glances at Florida and Arizona. We are even seeing money making its way north, particularly in British Columbia, Alberta and Atlantic Canada, as the strong U.S. currency has increased American buying power.”

The 2015 report shows that all property types have experienced a strong start to the recreational property buying season. Consistent with previous years, the demand for waterfront properties continues to produce the greatest price appreciation. Experienced agents are quick to point out that waterfront is finite and there is only so much property to go around.

While each community has its own unique characteristics, the brokers and agents who specialize in the sector agree fully on one important factor when searching for a recreational property: the need to do your homework before purchasing. From understanding shorelines to septic systems, owning a cottage is a different proposition to that of a city property. Each region has its own regulations that cover renovations; your ability to rent the property to others; and environmental obligations. While banks will provide financing to purchase a second residence, the requirements and loan terms will be different. It is highly recommended that buyers take their time to assess what is most important to them, from commute times to sun exposure to affordability. To do all this, it is essential to engage an agent that specializes in the local recreational property market who can walk buyers through the complex process.

The Royal LePage Recreational Property Report is an annual market analysis of recreational property prices, trends and activity in select leisure markets across the country and the full report can be found here.

2015 Recreational Property Report

2015 Recreational Property Report Price Summary

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It continues to be a competitive spring market for Metro Vancouver* home buyers. This competition continues to put upward pressure on home prices, particularly in the detached home market.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver reached 4,056 on the Multiple Listing Service® (MLS®) in May 2015. This represents a 23.4 per cent increase compared to the 3,286 sales recorded in May 2014, and a decrease of 2.9 per cent compared to the 4,179 sales in April 2015.


Last month’s sales were 16.7 per cent above the 10-year sales average for the month.


“We continue to see strong competition for homes that are priced right for today’s market,” Darcy McLeod, REBGV president said. “It’s important to remember that real estate is hyper local, particularly in a seller’s market. This means that conditions and prices vary depending on property type, neighbourhood, and other factors."


New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,641 in May. This represents a 5 per cent decrease compared to the 5,936 new listings reported in May 2014.


The total number of properties currently listed for sale on the region’s MLS® is 12,336, a 23.2 per cent decline compared to May 2014 and a 0.8 per cent decline compared to April 2015.


“While the supply of homes for sale remains below what’s typical for this time of year, our region continues to offer a diverse selection of housing options at different price points,” McLeod said. “This diversity within the housing stock is part of what’s driving today’s home sale activity.”


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $684,400. This represents a 9.4 per cent increase compared to May 2014.


The sales-to-active-listings ratio in May was 32.9 per cent. This is the highest that this ratio has been in Metro Vancouver since June 2007.


Sales of detached properties in May 2015 reached 1,723, an increase of 18.6 per cent from the 1,453 detached sales recorded in May 2014, and a 42.2 per cent increase from the 1,212 units sold in May 2013. The benchmark price for a detached property in Metro Vancouver increased 14.1 per cent from May 2014 to $1,104,900.


Sales of apartment properties reached 1,600 in May 2015, an increase of 24.4 per cent compared to the 1,286 sales in May 2014, and an increase of 40.8 per cent compared to the 1,136 sales in May 2013. The benchmark price of an apartment property increased 4.6 per cent from May 2014 to $396,900.


Attached property sales in May 2015 totalled 733, an increase of 34 per cent compared to the 547 sales in May 2014, and a 37.3 per cent increase from the 534 attached properties sold in May 2013. The benchmark price of an attached unit increased 6.4 per cent between May 2014 and 2015 to $501,000.


*Note:  Areas covered by Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, New Westminster, Pitt Meadows, Maple Ridge, and South Delta.

 

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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.