info@oneflatfee.ca 604-725-1000 Value of properties sold as of Apr 15, 2024: $1.4 Billion +

Author: Anand Bora

BC Housing And The Expected Market Change In 2023

BC Housing And The Expected Market Change In 2023

The COVID pandemic has had an interesting affect on the real estate market in British Columbia over the past couple of years. And while real estate sales peaked in many areas of the province in 2021/2022, most areas are now seeing the flip side of this trend with prices dropping and inventory staying on the market for longer periods.

BC Housing And The Expected Market Change In 2023

With 2023 Now Underway, What Can British Columbians Expect?

According to the British Columbia Real Estate Association (BCREA), residents of the province can expect 2023 to bring lower prices across the board, but the dip is expected to be relatively short-lived, with the market rebounding somewhat in 2024. The main reasons for the price dip in 2023 are due largely to the slowing economy and increasing mortgage rates.

Greater Vancouver will experience the lowest decline in the number of homes being sold and BCREA anticipates a reduction of approximately 4.3%. Prices are expected to drop by about 7.2% with the average home price falling to around $1.18 million.

According to Robert Hogue, assistant chief economist at RBC, activity in the Lower Mainland and Victoria appears to be levelling off.

“Recent declines have slowed quite considerably, and we’re probably not that far off from the bottom. But that being said, the level of activity, even in B.C., is historically low right now. Things are quiet,” he said.

Over the course of the next several months, home prices are expected to drop further. Affordability, however, also remains an issue which will hold the level of activity down and restrict gains for sellers.

As the tide turns and the number of sales starts to increase, the recovery is expected to be subdued. Huge jumps in prices are not expected and we won’t see the frenzy that was experienced in 2021/2022. Higher interest rates, after years of historical lows, will also keep activity in check.

While 2023 may not be a banner year for sales across the Province, BCREA anticipates 2024 will bring a healthier economy and with it, lower mortgage rates. Combined with the expected high level of immigration, all of these factors should assist in the recovery of the market and stimulate home sales once again.

If you’re considering buying or selling your home, contact the team at One Flat Fee to see how we can assist. We’re happy to offer guidance and expertise at the right time to conduct your real estate transaction. Reach out today!

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JANUARY 2023 MARKET UPDATE

January 2023 Market Update

The real estate market is generally always evolving. In Vancouver and other major centres in Canada, the market has remained strong throughout the pandemic, however, prices have been softening and sales are taking a little longer than during the peak times in 2021/2022.

JANUARY 2023 MARKET UPDATE

Sales

According to the Real Estate Board of Greater Vancouver (REBGV), January 2023 saw 1,022 home sales, more than a 50% decline from January 2022. When comparing January 2023 to December 2022, sales declined by just over 21% from 1,295 units sold in December.

Listings

The Multiple Listing Service ® (MLS®) in Metro Vancouver saw 3,297 new listings in January 2023, whereas January 2022 saw 4,170 homes listed for sale. While this represents a 20.9% drop, it reflects a significant increase against December 2022, which saw only 1,206 new listings.

Prices

According to the British Columbia Real Estate Association (BCREA), 3,047 residential units were recorded sold in January 2023 across the Province. Year over year, this represents a decrease of 50.3%. In greater Vancouver, the average price fell 8.4%, year over year, to $1,167,134.

Interest Rates

The Bank of Canada interest rate has undergone eight (8) increases over the past year, however, indications are that further increases may be suspended if the economy continues to warrant this policy.

The Bank of Canada rate increased from a low of 0.25% in March 2022 (and many months prior) to 4.5% in January 2023. With this, comes higher prime rates, as well as higher variable and adjustable mortgage rates.

Cooling Off Period

Effective January 1, 2023, the Government of British Columbia has enacted a new regulation allowing home buyers to back out of a real estate purchase for up to three business days after signing a contract. This cooling-off period applies only to the purchase of the residential property.

The Province believes it will provide buyers an opportunity to do their due diligence for obtaining financing or having a home inspection completed even if the buyer does not list these as “Subjects”. Now, the buyer can end the contract for any reason, within three (3) business days. If deposit funds have been paid upon acceptance of the Offer, the buyer is entitled to a refund.

Buyer beware: should you cancel a contract within the three-day cooling-off period, a Recission Fee of 0.25% is payable to the Seller. For example, if the purchaser exercises the right of rescission on a $900,000 home, they’d be required to pay the seller $2,250.

How this will affect the real estate market in Vancouver remains to be seen. For all your real estate needs, contact One Flat Fee and speak with our professional, qualified team.

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What To Look For When Reading Strata Docs

Living in a Strata titled property comes with certain rules, obligations and other ownership considerations regarding what an owner can do and what they may be required to do. If you are contemplating the purchase of a Strata unit (apartment or townhome), there are several things to look for when reviewing the documents.

Strata documents

1- Bylaws

Bylaws govern how the Strata Corporation operates and provide for how the strata corporation will be managed and administered. Bylaws are critical (and mandatory) for any Strata Corporation as they detail how the Corporation will be managed.

Bylaws also deals with how the individual strata units and common property are governed. Any Bylaw changes must be voted on by the strata lot owners before they can be implemented and most require the approval of ¾ of those owners.

Examples of Bylaws include pet restrictions, age restrictions, restrictions on the use of barbecues, what type of window coverings are acceptable or short-term rental restrictions

2- Rules And Regulations

Rules and regulations only deal with the common property or common assets of the Strata Corporation and do not address any issues relating to individual Strata Lots. For example, rules can be implemented regarding quiet times in the building, pets must be leashed in common areas, or what can be placed outside your unit on common area property. Rules can be implemented at any time by the Strata Council but must be ratified at the next Annual General Meeting in order to be effective on an ongoing basis.

3- Minutes

Typically, when considering the purchase of a Strata Unit, you should ask to review the minutes for the previous two (2) years. These minutes give you information relating to any issues raised by unit owners relating to the operation of the property overall, the financial position of the Strata Corporation and any other potential “red flags” such as ongoing lawsuits or maintenance concerns or problems. Minutes are a great way to get to know the “day to day” issues of the Strata.

4- Finances

Reviewing the financial statements and budget is important when considering the purchase of a Strata Lot. Because you’ll pay strata fees, it’s vital to understand what the Strata’s financial commitments are and how the expenses are funded. Are any large expenditures anticipated, are there any Special Levies or Assessments planned or anticipated, how much is in the Contingency Reserve Fund and how is the Depreciation Report being addressed?

Special levies or assessments can be large single contributions required by each unit owner which can be cumbersome, depending on what project the funds are allocated to. If you are on a budget, additional expenses beyond the normal strata fee requirement may be a factor in your decision so make sure you understand what those may be.

Owning a Strata Unit can be a terrific solution for those who don’t want the responsibilities of owning their own freestanding home. Outside and common area maintenance is taken care of for you and your only responsibility, for the most part, is for the inside of your own unit.

Everyone from retirees to first-time buyers and young people starting out can enjoy the benefits of living in a Strata property. For those who travel, it’s a great way to lock up and go without worry. The trade-off is the potential limitations of the Bylaws and Rules. If you can live with those, a Strata may be just right for you.

Whatever phase of life you’re in, or whatever age you are, Strata life should be carefully considered before you buy. If after reviewing all of the above items, it seems like it fits your lifestyle, give us a call at One Flat Fee and we’ll be happy to assist.

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What is a Strata?

What Is A Strata?

While this seems like a simple question, the reality is quite complex. We’ll start with a review of the basics surrounding Strata properties.

What is a Strata?

What Is It?

A STRATA PROPERTY is comprised of a group of individual lots or units, owned by different individuals, which together form part of a larger entity (the Corporation). Each Strata Lot is owned by an individual, along with a portion of the common area or other common property and assets of the Corporation.

A STRATA CORPORATION is formed when a developer registers a Strata Plan at the Land Title’s Office. The Strata Plan details the number of individual Strata Lots, or units, as well as the common property shared with each unit, in a ratio established by the Unit Entitlement of each Strata Lot.

UNIT ENTITLEMENT determines how much of the common property is owned by each Strata Lot based on the size of their unit, or other determining factors. In some Strata’s, the Unit Entitlement may be the same for every Strata Lot. Unit Entitlement is listed on the Strata Plan which should be reviewed before purchasing the Strata Lot as it can affect your financial obligations if/when a Special Assessment is levied.

Types Of Stratas

For a lot of people, Strata brings to mind an apartment style home but in reality, there are a variety of different Strata Properties as follows:

Apartments

Apartment style homes are a really common type of Strata property. Usually contained within a building with a number of other units, they all share the hallways, elevators, lobbies, and possibly parking structures. These types of buildings may have shared heating systems (boilers), plumbing, and electrical components although each unit maintains control over its own environment. Items such as roof replacement or boiler replacement are handled by the Strata Corporation and are not the responsibility of the individual Strata Lot owners, although each owner bears their portion of the cost of the replacement.

Townhomes

Townhomes are usually rowhouses or duplex-style homes but can also be freestanding single-family homes. Townhomes shares gardens, parking, and other common space but may have their own essential utility services including furnaces and hot water tanks. Roof replacement is usually the purview of the Strata Corporation to ensure consistency, with the costs borne by each Strata Lot based on the Unit Entitlement. Additionally, a lot of townhome complexes are gated, providing an extra level of security coming from the “owner only” access to the property.

Bare Land Stratas

This is just as it sounds. Generally, the Strata Corporation is responsible only for the land and the individual Strata Lot owner is responsible for the building or structures on the land. In this scenario, each Strata Lot owner maintains their home, inside and out, and pays for items such as roof replacement directly. Bare land Strata’s are far less common and harder to come by than other types of Strata’s.

Benefits

Living in a Strata property has a definite upside. The Strata Corporation takes on the repairs and maintenance of the common property and assets while the Strata Lot owner is only responsible for maintaining the inside of the Strata Unit (except in Bare Land Strata’s).

The ability to lock your door and go on vacation without worrying about who will mow the lawn or shovel the snow is an added bonus, giving the Strata Lot owner peace of mind while away.

The added bonus of the home being in a secure apartment building, or gated community, can make everyone feel safe and secure, day or night.

If you’re considering purchasing a Strata unit, contact One Flat Fee and we’ll be happy to assist with your search.

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Federal Legislation Prohibiting the Purchase of Residential Property

All About Federal Legislation Prohibiting The Purchase Of Residential Property

Commencing January 1, 2023, the Canadian Government enacted legislation which severely restricts the purchase of residential real estate by “non-Canadians” for a period of two (2) years. This legislation is known as the Prohibition on the Purchase of Residential Property By Non-Canadians. This law was designed to temper the rapidly increasing home prices, while also addressing the issue of housing supply since many homes purchased by foreign investors remain unoccupied.

Federal Legislation Prohibiting the Purchase of Residential Property

The goal of the legislation is to ensure homes are affordable for Canadians and will be repealed at the end of two years.

How Does The New Law Define A Non-Canadian?

A non-Canadian is anyone who is NOT:

  • A Canadian citizen;
  • A permanent resident of Canada; or
  • Persons registered under the Indian Act.

The Act also applies to Corporations which are not listed on a Canadian stock exchange, are privately held or are controlled by someone defined as a non-Canadian.

Are There Exceptions?

The short answer is yes. Following is a sampling of who is exempt, however, we recommend you thoroughly review the legislation and consult an attorney for further clarification.

1- Temporary Residents Studying In Canada.

There are a number of requirements to meet these criteria such as the length of time the resident has been in Canada over the past five (5) years, the course of study being undertaken, whether or not they have filed income tax returns and the cost of the home being purchased.

2- Temporary Residents Working in Canada.

Temporary residents who have a work permit or have been appropriately authorized to work in Canada may be exempt from the ban on purchasing real estate. Assuming all criteria are met, including having worked and filed income tax returns for three (3) out of four (4) preceding years, and they have not already purchased residential property while the prohibition is in effect, a temporary resident may be able to buy a home.

3- Refugees, Refugees Claimants, And Individuals Fleeing From International Crises.

Refugees who have been given protection under the Immigration and Refugee Protection Act, 2001 are exempt from the ban on purchasing residential real estate. If a refugee claimant has been referred to the Refugee Protection Division, they may be exempt. Refugee claimants fleeing an international conflict may also receive an exemption under the humanitarian public policy of the Immigration and Refugee Protection Act.

4- Non-Canadian Spouses Or Common Law Partners.

If the spouse or common-law partner of a Non-Canadian is a Canadian, they may qualify to buy residential real estate as long as the partner/spouse meets the definition of a Canadian. This means the spouse or partner is:

  • A Canadian citizen;
  • A permanent resident, or a non-Canadian not already prohibited under the Act; or
  • Persons registered under the Indian Act.

If any of the above categories apply to your situation, reach out to an experienced Realtor, or an attorney to ensure you meet the requirements of the Act before you make any purchases.

Is There Anywhere in Canada This Act Does Not Apply To?

Again, the short answer is yes. If the home is located outside of a Census Metropolitan Area or Census Agglomeration, purchasing a home is still possible for foreign buyers. A Census Metropolitan Area (CMA) or Census Agglomeration (CA) is an area that includes more than one metropolitan area, with one being at the core. In a CMA, the population has to be more than 100,000, with half of that number living in the population centre, or core. For a CA, the core population must be a minimum of 10,000.

But What Does This All Mean?

It means that while purchasing residential real estate by non-Canadians has become far more difficult, it is still possible. Speak with an experienced Real Estate Agent, and an attorney, if necessary, for clarification on your specific situation and what it means for you.

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