Let Me Be Your Canary in the Coal Mine..
You heard it here first, folks! Media outlets seem to be catching up to the fact that we have had 3 straight months of sales declines, signaling a slowing in the market. One of the key things I try to do with my Vancouver market updates for my clients is not simply echo the real estate boards numbers, but to get ahead of trends before they really start. When there is a very subtle but notable shift in the market I want you to know early, so when the real estate market shifts, you have already sold and are not competing with other sellers on who has the most attractive (lowest) price. That said, even with less sales the market hasn’t reached the point where prices will start to shift downward, there is still a ton of pent up demand.
The Quick Numbers
REBGV Video Update
What Is Driving The Market? Foreigners? Speculators? Realtors?
Let the scapegoating continue! This past week the provincial government stripped Realtors of self regulation and declared they would be adopting the recommendations of the recent inquiry. Now Realtors had already suggested implementing higher fines on themselves, myself included. The recommendation of a quarter of a million dollar fine is a massive increas to the previous fine limit of $10,000. I know the real estate industry seems luxurious, but I do not have 1/4 mil hanging out in my account and this will really be disruptive to plenty of ethical realtors (insurance premiums will jump substantially).
So how do we stop this? Close off our market to foreigners? I believe we should put higher limitations on rich immigrants and give more priority to refugees, and middle-low income immigrants, but this is far from the full picture! Not even close!! Especially after preliminary data shows less than 3% foreign purchasing (as a fuller picture emerges, expect this number to move up) Speculation taxes as well are not going to be effective! We need to look within the banking and mortgage rules to really affect change. Regardless of statistics showing Vancouver prices are way out of wack relative to local incomes, it is irrelevant when we basically hand out money for free with today’s interest rates! The cost to borrow is so minimal that your average Vancouverite can afford that million dollar mortgage on a regular salary, and that is scary when eventually rates will turn and they will be left trying to unload their property in a bad market. We need to dampen borrowing, and set tighter debt ratio thresholds (ratio of an individuals total debt vs total incomes) to not arbitrarily bump interest rates, but to protect buyers from themselves when they are offered free money at the same time as limiting foreign investment, and speculation. Ultimately the biggest impact will be offered by sustainable densification with a smart mix of subsidized housing, and property types (row homes, condos, micro suites, larger condos, etc.)
That was a big rant today! I am going to end off on a lighter note: I am nearing my minimum pledge of $2,500 for the ride to conquer cancer! Even if I don’t make the $2,500 in donations I have pledged to top my fundraiser to $2,500 from my own pocket if need be. Thank you to everyone that has donated already and if you haven’t yet, every bit helps me immensely! Even one coffee’s worth of money or if you forward this post to friends, family and colleagues, it means the world to me!.