Tuesday, July 24, 2018

Burnaby council the first to use new legislation aimed at developers

The City of Burnaby says it will be the first in British Columbia to take advantage of the province's new rental zoning laws.
The city says in a news release that it will begin implementation of a rental zoning bylaw aimed at maintaining rental stock at affordable rates.
On Monday, Burnaby council passed a motion asking city staff to implement the bylaw requiring developers to replace all rental suites if an apartment is renovated or rebuilt.
The bylaw requires the replacement units to be in the same neighbourhood, rented at affordable rates and be made available to current tenants.
Legislation passed in May by the provincial government allows municipalities to zone undeveloped property for rental housing and set out a specific number of rental units in a development.
Burnaby Mayor Derek Corrigan says the city has been calling for municipal authority over rental zoning for almost 30 years.
``We were optimistic when the new legislation came in about six weeks ago that allows us the tools to require older market rental buildings be replaced as part of any redevelopment,'' he says.
In the past, Corrigan says cities could only attempt to negotiate density in exchange for small numbers of rental suites, but the new legislation gives municipalities the authority to require replacement of rental suites.

Monday, July 23, 2018

Will BC’s new strata short-term rental fines help boost Vancouver’s vacancy rate?

In an effort to curb British Columbia’s housing affordability crisis, the provincial government has introduced higher fines for strata short-term rentals. And, according to one realtor the fines could help renters grappling with the City of Vancouver’s severely-low vacancy rate.
Last week, the BC government announced that, as of November 30th, strata corporations can impose a fine of up to $1,000 a day to owners and residents who don’t comply with a strata bylaw that limits or bans short-term rentals.
According to a press release, the BC government decided to increase the allowable fine as the previous penalty of $200 a week was not a “sufficient deterrent.”
Vancouver-based realtor Steve Saretsky says this could be welcome news for Vancouver renters who are struggling to find housing in a market with a vacancy rate of less than one per cent.
“[I] think at a time when our market’s really starting to slow down here, this is just another thing that’s probably going to free up some more rental supply and maybe take away a little bit more of the investor demand,” Saretsky tells Livabl.
Strata housing often refers to multi-unit developments, but can also include duplexes, townhouses and single-family homes which belong to a strata corporation. Stratas are self-governed and made up of all the strata owners.
The fine hike comes shortly after the City of Vancouver partnered with global home-sharing website, Airbnb, in April to allow Vancouverites to use their primary residences as short-term rentals, as long as they obtain a business licence.
Although the immediate impact of higher fines for strata short-term rentals is unknown, Saretsky says the new rules could cause demand in the City of Vancouver’s condo market to drop further.
“I don’t think it’s going to have a significant impact, but I think you’re adding on another demand-side policy at a time when the condo market is already really slowing down. I think any sort of little changes here and there are all going to add up,” says Saretsky.
In June, the city’s condo sales plummeted to a five-year low with a total of 475 units, according to the Real Estate Board of Greater Vancouver (REBGV).
As for rental prices, Saretsky notes that the new policy could also help keep prices stable in the coming months.
“Recent data and discussion with property managers suggest that rents have sort of topped out here over the last couple of months, so maybe this will sort of keep rent prices in check in the city.”
Kerrisa Wilson

Thursday, July 19, 2018

Airbnb renters could face fines of $1000 a day in BC rule change

British Columbia is taking action to curb the reduction of available rental homes caused by owners opting for the surging short-term rental market.
The popularity of services including Airbnb has been blamed for tightening availability of rental homes and the government has now announced a change to its Strata Property Regulation.
It will mean that strata corporations will be supported in enforcing short-term rental bylaws.
Currently strata corporations can restrict or ban short-term rentals and impose fines of a maximum $200 a week. With the high returns available from these rentals, that is not a strong deterrent.
But the new rules will hike fines to a hefty $1000 per day – 35 times the current limit!
“We’ve all heard the stories of renters losing their homes when units are pulled out of the rental market to be used as short-term rentals. With this change, we can ensure there is long-term rental stock for people and families who need them,” said Selina Robinson, Minister of Municipal Affairs and Housing. “As part of our 30-point plan to improve housing affordability in B.C., we are supporting strata corporations to both deal with the noise and security issues that can sometimes come with short-term rentals, and also preserve rentals for the long term.”
The change will take effect on Nov. 30, 2018, in order to allow short-term rental hosts time to adjust bookings and comply with a strata’s short-term rental bylaws.
“The new regulations will help define short-term commercial use as a different function than rentals, and provides some very real consequences for the violators,” said Tony Gioventu, executive director, Condominium Home Owners Association of B.C. “For those strata corporations who prohibit short-term use, this is a valuable amendment. It will require strata corporations to amend their bylaws at a general meeting to permit the higher penalties, which in turn will provide the strata with a great opportunity to make sure the strata’s bylaw complies with provincial legislation.”

Wednesday, July 18, 2018

Greater Vancouver’s pre-sale market expected to shift from “hyperactive” to balanced in 2018

Greater Vancouver’s pre-sale market was off to a strong start in 2018 but sales are expected to ease for the rest of the year, due to housing policy changes and escalating home prices.
In the first six months of the year, 81 new multi-family projects and 7,753 units came to the market across Greater Vancouver and the Fraser Valley, according to MLA Advisory’s 2018 Mid-Year Market Review, released Wednesday
Although the pre-sale market remains active and strong, MLA says the pace of residential sales is experiencing a slowdown.
[W]e’ve come off of an incredibly, incredibly strong market where in 2017, all the homes that were being released were being being consumed within the month of being released,” Cameron McNeill, Executive Director of MLA Canada tells Livabl.
“Now we’re seeing a movement towards a slightly more balanced and more normalized situation,” he adds.
The Vancouver-based real estate marketing company used internal data to compile its mid-year report.
In January, Greater Vancouver and Fraser Valley’s pre-sale market had a very high absorption rate of 94 per cent for new units entering the marketplace. However, six months later, the absorption rate dropped to 48.9 per cent in June.
McNeill says this downward trend in absorptions indicates a shift from hyperactive levels over the past two years to more normalized market conditions.
He attributes the slowdown to stricter mortgage regulations introduced in January, along with rising interest rates and the impact of new BC housing policies.
“I believe that it’s less about the government intervention as it is about people’s perception. And therefore there’s short-term uncertainty that the consumer has, they’re waiting and watching,” says McNeill.
MLA defines normalized pre-sale activity as projects experiencing 50 to 60 per cent sales absorptions within the first six to nine months and sell-out periods of 12 to 24 months.
Although the pre-sale market in Greater Vancouver and the Fraser Valley is expected to see slower activity in the second half of the year, McNeill says sales are still relatively strong.
“MLA predicts that we’re going to level off to a balanced market where projects take anywhere from three to 12 months to sell out versus selling out in a matter of weeks,” he says.
From July to December 2018, MLA is forecasting 67 project launches and over 7,700 new homes to be released in the market.
North Vancouver is slated to be the most active market during the rest of 2018 as approximately 11 projects and nearly 1,500 homes are scheduled to be released.

Sunday, July 15, 2018

BC housing markets return to balanced territory thanks to softer demand

As a result of the stricter mortgage regulations that rolled out nationwide six months ago, housing demand in British Columbia continued to soften in June, pushing most markets into balanced territory.
Last month, a total of 7,884 homes changed hands across the province — a 32.5 per cent decrease from 11,672 units sold a year ago, according to the latest data from the British Columbia Real Estate Association (BCREA), published Friday.
“What we’re seeing in the market right now is almost purely the impact of new mortgage rules,” Brendon Ogmundson, BCREA deputy chief economist, tells Livabl.
On January 1, the Office of the Superintendent of Financial Institutions (OSFI) implemented a new stress test for uninsured mortgages, to ensure buyers can withstand rising interest rates. Since the new policy came into effect, it has been linked to a slowdown in activity both across BC and the country.
In June, declining sales persisted in BC’s priciest housing region, Greater Vancouver, which had 2,467 home sales last month, down roughly 38 per cent from 3,953 homes sold in June 2017.
As demand continues to decline, Ogmundson says that most of BC’s housing markets are returning to balanced territory.
“What we’re seeing in the market is that the level of listings is up a little, so supply is starting to accumulate but from historically low standards, while demand is off a fair amount. And therefore, markets are somewhat balanced on a supply and demand basis.”
Last month, there were a total of 35,932 homes listed for sale across the province, up 21 per cent from a year ago.
As most markets are sitting in balanced territory, there was less upward pressure on prices last month. In June, the average price of a home in BC was $716,326 — a 1.3 per cent decline from the same time last year.
In Greater Vancouver, the average price of a home hit $1,068,559 in June, up 1.4 per cent from a year ago.
Looking ahead, Ogmundson says the impact of the stress test should start to fade away, allowing BC housing markets to recover over the next six to 12 months. The economist forecasts that sales will pick up across the province in the coming months and prices will continue to experience moderate growth.

Sunday, July 8, 2018

Metro Vancouver price drops unlikely to help housing affordability, real estate experts say

While there may be more signs of cooling in Metro Vancouver's housing market, experts say significant relief is unlikely for shoppers at the market's lower end.
Sales are well below the 10-year average, according to figures released this morning by the Real Estate Board of Greater Vancouver, and the price of a detached home actually dropped marginally last month in half of the areas tracked.
Some of the biggest price drops have been in the most expensive neighbourhoods, including the West Side of Vancouver and West Vancouver, which have shown four per cent decreases in prices over the past six months.
That's not surprising to Cameron Muir, chief economist for the B.C. Real Estate Association, who says the top of the market is always the most volatile part.
Along with new taxes on foreign buyers, speculators and empty homes, for a detached home costing more than $3 million owners will also pay both the new school tax and the extra property transfer tax if they sell, Muir notes — and all that is cooling sales in the upper price range.
But he says the effect of those taxes will be limited since "only three per cent of homes sell for over $3 million."

Price drop not trickling down

While overall prices are pretty flat across the market, Muir cautions that anyone looking for significant price relief at the lower end is likely to be disappointed.
That's because the unintended consequences of other factors designed to cool the market are actually continuing to push up prices at the lower end.
In fact, while sales of apartments dropped 29 per cent over the last year, the benchmark price has continued to go up over 20 per cent over the same period.
Phil Moore, the president of the Real Estate Board of Greater Vancouver, agrees the new mortgage stress test and rising interest rates are driving up prices at the lower end, where supply remains limited.
He says an average couple making $120,000 annually is limited by the new rules to prices of up to $750,000 — and that's driving up competition for apartments and townhomes.
"First time buyers are so frustrated," Moore says.

Demand forecast to outpace supply

Even with a record 42,000 homes under construction across the region, immigration and changing demographics will mean demand will continue to out strip supply.
"The selection of homes for sale in Metro Vancouver has risen to the highest levels we've seen in the last two years, yet supply is still below our long-term historical averages," says Moore.
Muir agrees that demographics will continue to put pressure on the market's affordable end.
"Underpinning the market we have the millennials, the baby boomers' children which are a huge demographic cohort, now entering their house-forming years. So, they are going to help underpin demand over the next several years, particularly in big cities where young people tend to flock."
If there are any bargains to be had, they will likely be limited to the higher end of the market, says Moore.
However, taking history as a guide, Muir forecasts the negative impact of the new taxes is only likely to last three to four months before prices start to tick up again.
CBC News