Vancouver Real Estate Trends: The Reason Behind the Housing Shift
As a townhouse realtor, Ariane Benjamin, like so many industry professionals, has vigilantly tracked real estate trends related to townhouses in Vancouver since the start of 2018.
Vancouver’s record breaking real estate prices and rapidly inflating market has dominated public discussion for years. And in the wake of decreasing affordability, it was a pivotal topic for many candidates during the recent municipal election.
To date, interventions like the Foreign Buyer’s Tax and Empty Homes Tax temporarily slowed activity, but did little in the long run to increase housing affordability.
According to the Real Estate Board of Greater Vancouver, sales have been falling since the start of the year. In fact, a report released in July showed a 30% decline in sales year over year.
And while prices have started to follow suit, this has been most noticeable among the luxury homes typically priced $2 million plus. To date, only marginal price changes have been observed in more affordable properties, like condos and townhouses in Vancouver.
For many, Federal interventions seem to the driving force behind the reversal, specifically the B20 Stress Test. Enacted as a measure to ensure that rising bank rates don’t leave Canadians susceptible to bankruptcy,tThe B20 Stress Test, enacted on Jan 1st, 2018, increases the qualification rate for home buyers seeking mortgages from federally regulated lenders.
Home buyers must now qualify at a minimum rate equal to the greater of:
- their contractual mortgage rate plus two per cent; or
- the Bank of Canada’s five-year benchmark rate.
The B20 Stress Test erodes buying power by almost 20 percent. Since then, BC’s housing market has changed drastically, along with those in Alberta and Ontario. But in reality, what looks like a tailspin is simply market conditions returning to balance. Now, home buyers seldom have to contend with multiple offers. Whether it’s detached properties or townhouses in Vancouver, there’s greater choice and more room for negotiation.
The long-term impact of the Mortgage Stress Test and other initiatives enacted by all three levels of Canadian Government remains to be seen. For now, the cooling market presents new opportunities to Canadians, whether it’s acquiring a first-time home or upgrading to a more significant property.
As an experienced townhouse realtor in Vancouver, Ariane Benjamin has been tracking and studying townhouse sales and neighbourhood trends for over 15 years. Her one-on-one approach to buying and selling emphasises a customer-first attitude and allows her to deliver results and value.
Call (604) 779-1500 to discuss buying or selling a townhouse.