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Downtown Vancouver Condo Report
November 2016

 
Happy holidays everyone! I wish you the best for the holiday season and the New Year! 

Good news for nearly everyone is that our downtown condo market has cooled off from the unparalleled spring market with prices moderating, listings increasing, and sales decreasing from a year earlier. We may not see a repeat of our spring 2016 market in our lifetimes.

Multiple offers are now less frequent and, thankfully, offers are being accepted with subjects. However, contrary to the essentially stalled house market that is overwhelmingly reported in the news, the downtown condo market remains a Sellers Market, particularly for condos valued up to $1.75m.


To best decide when you should buy and/or sell real estate, the general statistics reported in the news do not work. You need to delve deeper to understand how our market is performing based on your price point, home type, and neighbourhood as provided below.

I hope you find this information clear and useful. As always, I welcome your questions and am happy to discuss our market in relation to your home selling and/or buying goals. Feel free to call, email, text, or we can chat over a coffee.

Happy condo hunting!

Jason Hutchison, REALTOR®
cell: 604.314.7138

 
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Listings and sales by value, style, and neighbourhood

Price bands - the market segment up to $1.75m was particularly strong. This is a considerable improvement over October 2016, when the most active band only reached the $900k mark. I believe the stronger activity in November is at least partially due to people becoming accustomed to the Additional Property Transfer Tax for foreign buyers and realizing they had to act if they wanted to be in their new home prior to holidays.

Condo types - as typical, smaller condos were the most active, although last month, 2 and 3 bedroom condos gained strength over October.

Neighbourhoods - Downtown, Yaletown, and the West End all performed essentially the same. Given the prevalence of luxury and ultra-luxury condos in Coal Harbour and the market being slower over $1.75m, it is understandable that this neighbourhood was less active.

Days on market - condos that sold in October were on market for an average of 14 days, a slight increase compared to November 2015. This equates to buyers having a comfortable amount of time to consider listings.
 
 Map of the 4 neighbourhoods (PDF)
Graph of benchmark condo values

The below graph is based on data from the Home Price Index, a computer model used to determine the value of a typical condo. This is the preferred average as the model is less susceptible to outliers such as sales in our ultra-luxury condo market segment.

Condo values - given the sharp price increases in Coal Harbour and Yaletown, it is no surprise that prices have moderated the most in those two neighbourhoods. The other neighbourhoods have experienced more of a levelling off of condo values. Downtown saw a rebound of growth last month, which correlates to the greater activity up to $1.75m.
Trend in number of active and sold listings

Listings - for the first time in 4 years, November 2016 had more listings than the same month the previous year. There were 469 listings last month, slightly more than the 399 a year earlier, but dramatically lower than the peak of 1080 listings in November 2011. This increase in listings is a welcome trend so buyers, including those currently selling their home, have more choice.

Sales - following record sales earlier this year, sales have moderated through 2016. However, comparing year-to-year shows sales have dropped significantly, from 281 in November 2015 (during the record market) to the 173 sales last month.
Market characteristics and direction

Current market - it speaks to the incredible market activity earlier this year that buyers feel that our current market is in their favour despite remaining a Sellers Market. Viewing the downtown peninsula condo market as a whole, we had a 37% sales ratio, well above the approximately 22% required to signify a Sellers Market.

The peak you see in March 2016 was a staggering
124%, an unprecedented market that caused me to adjust the y axis on the graph. The rebalance in the market we are currently seeing is driven by increased listings and lowered sales but, again, it is still an active market. 

Market direction - projecting the direction of real estate markets is a challenge. While not infallible, market direction can be extrapolated based on current market activity coupled with the season. The lack of inventory (both market and rental housing), low interest rates, and a decent economy are driving our market. I believe we will have a decent December and return to a strong but more normalized market in spring 2017 as people who were waiting on the sidelines return to the marketplace.

Looking forward I do not believe the recent measures taken by government will dramatically impact our overall downtown condo market. However, the Additional Property Transfer Tax for foreign buyers may continue to dampen sales at higher price points and changes to mortgage rules may somewhat reduce demand at lower price points. I do not believe the Empty Homes Tax will impact condo values.
Mortgage corner by Pinsky Mortgages

There has been quite an uptick in mortgage rates over the past few weeks. Specifically, there has been an overhaul on how mortgage rates are provided to borrowers. This is due to new regulations which restrict lenders from "bulk-insuring" their mortgages. Learn more on my blog at my blog post, "Complexification" of Mortgage Rates

Please do not hesitate to contact us - we are available for your home financing needs.

Eitan, Paisley, and Adam
Direct: 778.990.8950     Meet our team


Pinsky Mortgages is a full service mortgage team that specializes in getting you the best rate, with the best mortgage service and solutions around, while making sure you understand the mortgage process as well as your actual mortgage. 

 Mortgage calculator (external link)
Current events

Empty Homes Tax - not to be outdone by the BC Provincial Government's Additional Property Transfer Tax of 15% for foreign buyers, last month, the City of Vancouver passed the Empty Homes Tax. The City's goal is to increase the supply of rental homes to alleviate pressure on renters due to the low vacancy rate of 0.6%. The tax will first be levied in early 2018 based on whether the property was vacant in 2017.

Basically, if you own a home not designated a primary residence that is vacant for more than 6 months of the year, you will be subject to a 1% tax of its assessed value each year. On a $1m property, the tax equates to $10,000 each year it is vacant.

There are exemptions, for instance, when the residence has sold during the year, the condo building prohibits rentals, and the home is undergoing renovations.

Feel free to contact me if you have questions or would like to know your options for avoiding the tax. We can discuss retaining the residence or renting it out versus leaving it vacant. If renting is your preferred route, I can connect you with solid rental agents who can manage the rental on your behalf.

You can also learn more about the tax on the City of Vancouver's website.

 
Featured residences 
 Search all condo listings (external link)
Jameson House
2302 838 West Hastings Street
$1,168,000
2 beds 2 full baths
917 sqft
Mondrian Townhome
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$1,100,000
2 beds 2 baths
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Freesia Penthouse
PH3 1082 Seymour Street
$1,488,900
2 bed 3 baths plus 4 patios
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Three Harbour Green Executive Residence
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$12,888,000
3 bed 4 baths plus 912 sqft patio
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Condo selling & buying system

I combined my real estate expertise and passion for systems and created the Vancouver Real Estate System, a clear, practical, and systematic guide to selling and buying condos in Vancouver.

The system encompasses your entire journey and will be tailored to suit your personal needs. The entire system has proven to benefit those new to real estate while more experienced people will just receive components designed to maintain focus and momentum. System components include:
  • professional in-person service,
  • a 109 page book outlining your entire process,
  • detailed progress emails to help keep you focused and in control,
  • First Alert emails of promising new listings as they hit the market, and
  • straightforward condo market reports.
Tom and Par are pictured celebrating their anniversary and first Christmas in their new condo!
Testimonials

"I would strongly recommend Jason to anyone looking for a new home. His knowledge of the market, his sincerity, professionalism, and positive energy is unbeatable. He really loves what he does and it shows. He found me my dream home, and even after the purchase went out of his way to deal with any issues that arose. He made the experience stress free and a lot of fun. Truly went above and beyond. A wonderful guy and incredible realtor!"
Dr. Zamil Karim
Gastroenterologist


"Jason’s market knowledge, experience, organizational and communication skills as well as his ability to match a buyer’s requirements with the perfect property, make buying and selling a home easy. I highly recommend Jason for buying and selling your home."
Gary Leonard
Accountant


"As a first time home buyer I had many questions and there were more unknowns, but I was in good hands with Jason. He listened to me and kept me focused on what I needed to do next allowing me to remain relaxed and productive. I appreciate his guideance and fun nature - I can easily recommend Jason for your next home purchase. Call him."
Anthony Hachey
Product Developer
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