The Province

If Premier Christy Clark’s government believes that investing $703 million over the next three years is somehow going to benefit 42,000 households become homeowners, and in turn help grow the B.C. economy, I have to wonder what toxic substance members of her cabinet ingested before they came to such a decision.

Low-income families, seniors and people with disabilities have been screaming out of desperation for years to see more affordable housing projects built, while many middle-class income earners are paying exorbitant rents with very little saved up to buy homes that are so grossly expensive and over-priced that the potential benefits and gains from real estate are no longer a realistic option for anyone but the highest income earners and the super rich.

People need a clean, safe shelter to live in. For $703 million, I wonder how many homes could be built that would give both low-income and middle-class earners a mixed diverse community to live in, much like the national housing cooperative program that was cancelled in the 1980s and which was listed as the most successful housing strategy of its time.

Leslie Benisz, Vancouver

© 2017 Postmedia Network Inc.

LARRY PYNN
The Province

B.C. Assessment property valuations for 2017 are now available online. And while the red-hot Metro Vancouver real estate market has cooled in recent months, a random survey of homes currently for sale in the region suggests the assessment valuations are generally close to the mark or below today’s asking prices.

Assessment figures reflect property values as of July 1, 2016, a month before a provincial 15-per-cent tax on foreign buyers took effect Aug. 2 — with a chilling effect on the market.

In normal years, assessment figures are often considered lower than true market value. A random online sample of 10 residential properties currently for sale throughout Metro shows that is still frequently the case — with exceptions — despite the market volatility of the past year.

Dan Morrison, president of the Real Estate Board of Greater Vancouver, cautioned Monday that asking prices aren’t necessarily reflective of the real value of the property: “There could be no logical reason why a seller picks a certain asking price for their property. You can get a distorted view from one-off comparisons.”

He also noted that B.C. Assessment conducts a “mass appraisal” every year that can’t account for the fact that “every house and neighbourhood is different.” He added that “everybody thought the selling prices would be coming down a lot, but they haven’t” after the foreign-buyers tax, especially in the townhouse and condo market.

Even among detached single-family homes, “there hasn’t been that big price drop that everyone anticipated.”

Currently, about 12 per cent of listed homes are sold monthly — the tipping point before it becomes a buyer’s market, Morrison said. “We’re just on the border, so we haven’t seen the pressure on prices yet.”

Tom Davidoff at the Sauder School of Business at the University of B.C., also observed that in some markets prices continued to appreciate past July 1. Sellers also tend to be slow in adjusting list prices to market conditions. “Since prices have been falling, transaction prices may be closer to these assessments.”

Finally — “and this is conjecture” — B.C. Assessment “may shade assessments somewhat below their best guess of value to avoid conflict,” he added.

A three-bedroom, three-bath, 2,494-square-foot home is selling for $4.18 million at 2134 West 53rd Ave. in Vancouver. B.C. Assessment places the value at $3.48 million.

A two-bedroom, three-bath, 1,656-sq.-ft. condo at 301-1985 Alberni St. in the West End is selling for $2.5 million, but has an assessed value of $2.19 million.

A four-bedroom, four-bath, 1,716-sq.-ft. home at 1890 Grant St. near Commercial Drive is selling for $1.59 million, but is assessed at $2.27 million.

A six-bedroom, three-bath, 2,483-sq.-ft. home at 5638 Rupert St. is selling for $1.59 million, but is valued by B.C. Assessment only marginally higher at $1.61 million.

In North Vancouver, a five-bedroom, two-bath, 1,914-sq.-ft. home selling for $1.96 million at 236 West Balmoral Rd. is valued slightly less by B.C. Assessment at $1.86 million.

Meanwhile, assessments of B.C.’s most-expensive homes kept increasingly at a dramatic pace.

The sprawling Kitsilano home of Lululemon founder Chip Wilson topped last year’s most-expensive properties. The latest figures show the home at 3085 Point Grey Rd. has increased in value to $75.8 million, up from $63.8 million last year.

© 2017 Postmedia Network Inc.

Concern federal policy changes will stifle housing market

GARRY MARR
The Vancouver Sun

The head of the Canadian Home Builders’ Association doesn’t come out and say it, but he seems a little concerned that government might be trying to derail the real estate industry.

“You know ,2016 was a really good year,” said Bob Finnigan, president of the Ottawa-based group whose members include 8,500 companies that span the homebuilding industry from contractors to financiers. “We had a bunch of new challenges brought in and we’ll see how we handle those in 2017.”

One immediate challenge is dealing with an anti-dumping tariff on drywall from the U.S. The industry says that is driving up prices that will have to be passed on to consumers, but hopes the tariff will be overturned following a decision by the Canadian International Trade Tribunal that is expected on Jan. 4.

A bigger issue is the new mortgage rules that have forced consumers with loans backed by Ottawa to qualify based on a posted five-year closed fixed mortgage rate of 4.64 per cent instead of the actual rate, which is now as low as 2.3 per cent for a five-year fixed rate closed mortgage. The higher rate forces consumers to prove they could handle a much larger monthly mortgage payment, which is squeezing many first-time buyers out of the market.

The one-size-fits-all policy does not sit well with many in the Canadian real estate industry including Finnigan, who wonders how a policy aimed at slowing down the market in Toronto will play in softer markets such as the East Coast.

The Calgary Real Estate Board voiced the same concerns in December with its chief economist saying “stringent conditions for borrowers” were stifling any housing recovery in the oilpatch.

On top of that, there are hints of a larger down payment requirement coming in 2017. Evan Siddall, chief executive of Canada Mortgage and Housing Corp., seemed to muse about the possibility in a speech to the Bank of England in the fall.

“Politicians are tempted to help first-time homebuyers enter the market, but low down payments may be part of the problem adding to affordability pressures and macro-economic vulnerabilities,” Siddall said in his speech, which was posted to the Crown corporation’s website.

The statement didn’t go unnoticed by Finnigan and the industry, which is already grappling with a rule change brought in by the federal Liberals in February that pushes down payments up to 10 per cent, from five per cent, for the portion of a home between $500,000 and $1 million. The government doesn’t backstop loans for homes worth more than $1 million.

“I don’t know if they are going to increase down payments. You sit in meetings and say, ‘This would be a bad thing to do,’ and they come out and do it,” Finnigan said. “I think you have to start looking at individual markets.”

He said the down-payment rule targets more expensive markets such as Toronto where a $500,000 threshold actually has an impact, but the mortgage rule changes were more haphazard.

“The first one was done with a paintbrush and the second one with a roller,” he said.

It’s not all negative for homebuilders. The new year will begin with a couple of boosts for firsttime buyers that could help them enter expensive markets such as Toronto and Vancouver.

In British Columbia, a new grant matches the down payment amount for first-time buyers — up to $37,500, or five per cent of a home’s purchase price. And Ontario is doubling the maximum land transfer tax refund for eligible first-time homebuyers to $4,000.

Of course, the government giveth and it taketh away.

Finnigan said it’s still unclear what impact the B.C. government’s 15 per cent foreigner property transfer tax will have on overseas buyers. “It’s only been a few weeks, we don’t know if those people will move to Toronto or Seattle,” he said.

The Building Industry and Land Development Association said in December the average new detached home price had reached $1,230,961.

“The single family home is almost a thing of the past,” Finnigan said.

© 2017 Postmedia Network Inc

Housing advocate worries about Home Owner Grant eligibility

John Kurucz
Vancouver Courier

A pair of single-family homes in Vancouver have higher assessed values than a pristine, 780-acre island off of Victoria.  

That’s just one sobering statistic included in a report issued Jan. 3 by the B.C. Assessment Authority that points to 40 per cent increases for some properties across the city.

Examples provided by the assessment authority point to individual cases, rather than city-wide changes.

That said, examples show that a 33-foot, single-family lot on both the East and West Sides experienced a 41 per cent increase: on the West Side the jump went from $1.94 million to $2.74 million, while the East side lot ballooned from $947,300 to $1,338,900.

Some individual strata assessments illustrate increases in the 20 to 25 per cent range: the West Side numbers rise to $827,000 from $662,000, and the East Side values jump to $486,000 from $405,000.

“The area that those single-family dwellings have increased 30 to 50 per cent really extends right from Squamish clean through to Abbotsford and Chilliwack,” said Jason Grant, regional assessor for B.C. Assessment.

The numbers contained in the report reflect assessed values as of July 1, 2016, when the market was at a peak. A property’s physical condition is assessed as of Oct. 31, 2016.

Assessments are based on a number of factors: property size, age, quality, view and location. Changes in assessment can vary wildly from property to property, but that’s not to suggest a sudden shift in assessment automatically translates to a property tax hike.

“Your taxes are more affected by how your assessment changes compared to the average change in your community,” Grant said.

The elephant in the room is how these assessment changes will affect Home Owner Grants. The threshold to receive those grants, which helps homeowners lower their property taxes, is $1.2 million.

“The Home Owner Grant is going to be a huge wildcard,” said Justin Fung, spokesperson for the housing advocacy group known as HALT (Housing Action for Local Taxpayers). “You have people who have been in homes that were affordable before and now they may not be. It’s a double whammy. There will be working-class folks who are hit pretty hard with that increase and the additional taxes.”

Nine of the 10 priciest properties in the province are all on Vancouver’s West Side, namely in Kitsilano, Point Grey and Shaughnessy. The property at 3085 Point Grey Rd., reportedly owned by Lululemon founder Chip Wilson, topped the list at $75.8 million. The property was assessed at $63.87 million last year.

The home listed in the number two spot, located on Belmont Avenue in Kits, has an assessed value of $69.2 million.

The James Island property located north of Victoria, which ranked third on the list, came in at $53.2 million. Media reports from 2012 and 2014 suggested that the second-largest, privately owned Gulf Island was on the market for a cool $75 million. The Sotheby’s listing to sell the island is no longer online, and it’s unclear if the property is still for sale.

Those wanting to appeal their assessment must do so by Jan. 31. Assessment authority stats suggest one to two per cent of property owners go that route annually. A review panel hears those appeals between Feb. 1 and March 15 and decisions are then mailed out in April.

“Even with the large increases we saw last year, that number [of appeals] didn’t change very much and was well within that one to two per cent — we’re not expecting that to change this year,” Grant said. Homeowners can expect to receive their assessment notices in the mail this week.  

[email protected]

Jamie Wiebe
other

 

Winter is supposed to be a buyer’s market, right? Fewer buyers = way less competition. After all, you have no problem trekking through the snow to find the perfect home. Let the others wait until spring. Right?

But winter home-buying assumptions can cost you. Just because the market moves slower doesn’t mean there aren’t pitfalls lying beneath the powder. Keep in mind these six common mistakes—otherwise you might just lose out on your dream space. And that would lead to a very long winter indeed.

1. Landing yourself in holiday debt

Your kiddos are clamoring for a few Hatchimals, your wonderful husband deserves the Google Pixel, and Mom and Dad desperately need a new set of artisanal kitchen knives. But don’t rack up new debt buying everyone gifts.

“Even if your credit is in good standing, suddenly racking up a ton of holiday shopping debt will change your debt-to-income ratio and potentially negate your pre-approval,” says Alicia Brison, a real estate agent in Sacramento, CA.

Budget for your generous splurges ahead of time. Or you know what? Tell your family they’re getting the best gift of all: a new home.

2. Failing to use your imagination

Yes, the property looks a bit … drab. But don’t all homes seem sad in winter, especially if they’re not charmingly covered in snow? Don’t dismiss a property because of bare tree limbs and dead grass. Imagine what the home could be in all its springtime glory.

Pretend the trees are blooming and the rose bushes are covered in color. That’s the mental picture you should use to make your decision.

3. Ignoring possible closing date delays

Don’t assume everything will go as planned. This will go wrong, trust us. Does the plumbing need updating? Is the wiring a little funky? These delay-causing problems are always annoying, but in winter they can create a full-on migraine. This goes double for custom or new-build homes.

“While many trades will work through the winter, there are certain processes that cannot be completed during heavy snowfall or dramatically low temperatures,” says Luke Sahlani, the lead project manager and director of Sensus Design & Build. “This can be frustrating and particularly problematic if the home buyers’ closing date on their current home is coming up quickly.”

Build in some buffer time for your new home’s closing—or just a little snow might crash your move-in day hopes.

4. Lacking flexibility

House hunting always requires a certain level of spontaneity—you have to be ready to pounce as soon as you hear a place fitting all your criteria is on the market. But when the weather’s against you, make sure to loosen your schedule even more.

Flexibility “is even more critical during the winter season,” Brison says. “Weather can cause unexpected delays, and buyers need to be willing to plan viewings during the busy holidays.”

Yes, you’re excited for cousin Humbert’s one-of-a-kind pumpkin pie, but if 2 p.m. the day after Christmas is the only time you can check out your dream abode, you might have to skip a second serving.

5. Assuming you’ll automatically score a sweet deal

In the winter (generally speaking), home prices are lower. Sellers are motivated. The competition’s bundled up inside, warming their hands by the fire. Bidding wars are a vestige of the summer months. Now’s a great time to buy, right?

Unfortunately, the math doesn’t necessarily work in your favor.

“A lot of buyers assume they can get a better deal in winter because [fewer] people are competing,” Brison says. “That’s not usually the case. Inventory is lower, so the number of people who are competing is similar.”

No, prices may not rocket to the sky-high levels seen when the weather is warm. But if you expect to score a bargain-basement home deal, you might be disappointed.

6. Lowballing your offer

If you don’t get a discount on a home during the winter months, maybe you think you can create your own discount with a lowball offer. Sellers listing their homes in the winter must be desperate to sell, the theory goes.

Think again.

“Not only can a lowball offer be off-putting to the seller, but sometimes they can be so offended, they will be closed to a counteroffer,” says Denise Supplee, the director of operations at SparkRental.com.

Work with your Realtor® to craft a competitive offer that isn’t offensive. Nothing is worse than losing the home you love to another buyer because you prioritized the deal over finding a place that perfectly fits your family.

©1995-2016 National Association of REALTORS^® and Move, Inc.