Top 4 Things To Consider When Getting A Mortgage

Top 4 Things To Consider When Getting A Mortgage

We recently had a chance to chat with Tyler Wilson at Pilot Mortgage Group all about what to consider when getting a mortgage.

At West Haven Group, we talk a lot about the search for the right property and the importance of working with an excellent real estate agent, but it is just as essential to have a solid mortgage professional. Without the right financing in place, your dream home just isn’t going to come to fruition.

For today’s article, we will be focusing on first-time homebuyers—but stay tuned for a follow-up on refinancing! Below we cover the top four things Tyler recommends when it comes to getting a mortgage for the first time.


1 – Set a realistic budget

The first step of getting into real estate is deciding what you can afford. It is crucial that you think about your own budget prior to reaching out to a mortgage professional or a real estate agent. Many people want to be told what they can afford, but no one knows you and your lifestyle as you do. Do you like to travel, eat out often, shop for all the latest trends? You need to identify what your monthly spending habits are and decide if you are willing to change these for the right property.

It is common to become fixated on the maximum amount you qualify for but this amount is not necessarily what you actually want, or are able, to spend on a monthly basis. It’s important to remember that there will be property taxes, utilities, and most likely strata fees in addition to your monthly mortgage payment.

A good mortgage professional will ask these questions upfront so it is helpful to have your answers ready to get on the same page with what your needs are.

Pictured above, Tyler and Damon from the Pilot Mortgage Group

Pictured above, Tyler and Damon from the Pilot Mortgage Group

2- Find a mortgage professional you trust

When you are looking to acquire a property, you want to find a great mortgage professional. Ideally, you want someone who focuses only on mortgages, rather than a multitude of financial areas, and someone that has access to a variety of options. A mortgage broker, such as Tyler and his colleagues at Pilot Mortgage Group, are examples of this as they focus solely on mortgages and have access, and most importantly knowledge, on a variety of different options as opposed to someone who works at a bank and therefore only has access to that one financial institution.

You should try to find this person through someone you trust—recommendations make for the best professional relationships. Make sure you do your homework as they will ultimately be responsible for securing and locking in your financing.

Tyler told us that brokers are often referred to as the Quarterback of real estate as they are in charge of dealing with the lender, realtor, and lawyer –and although we aren’t known to use sports analogies at West Haven Group, we agree that this description is accurate. Brokers are responsible for getting your property deal past the finish line…or should we say goal posts?! Either way, a lot of experience is important.


3 – Have a timeline in mind

There are two different timelines to consider—your timeline to buy a property and your life timeline.

Let’s start with your timeline to buy a property. It is important to understand the process it takes to qualify for a mortgage and then be actually approved once you’ve found the right property.

Pilot Mortgage Group offers a clear process that sets out the following steps and estimated time for each so you know exactly what to expect:

Complete Introduction Form (2 min)

  1. Provide Financial Application (10 min)
  2. Gather and Provide your supporting paperwork (20 min)
  3. Complete your Mortgage Consultation (30 min-1 hour)
  4. Receive your Certificate of Pre-Approval
  5. Choose a lender to work with (10 min)
  6. Review your approval paperwork with your Broker (15-45 min)
  7. Close your Purchase with your elected Legal Professional

You should be ready to buy within the next 120 days before you get a pre-approval as that is how long that rate will last—and you will have to requalify again if it expires.

Next up – it is also vital to know what your life plan is. Are you going to be happy to live in this property for five years or do you think you’ll want to upgrade sooner? Are you a couple with two incomes but planning to start a family soon so may have either a maternity or paternity leave coming up? What’s your risk tolerance in terms of interest rates fluctuating? A good broker will walk you through all of those questions before presenting the options that are best suited to you.


Be ready to close the deal

As discussed above, it’s important that you’re ready to ready to purchase a property within four months once you start talking to a mortgage professional—particularly when you are in a hot market like right now. You need to be fully prepared to go into multiple offer situations and you, therefore, need to have all of your financing prepared and ready to go.

There is a lot of pressure on buyers to have very short subject removal time periods (three days or less) or even go subject-free. It is crucial that you are working with an excellent realtor that you trust explicitly so you aren’t exposing yourself to unnecessary risk – and if you do decide to take some risks, that you are well educated and have done all the necessary due diligence.

Remember – just because you are preapproved does not guarantee to finance, it is dependent on the property itself and the banks’ appraisal of its worth.

Working with a fantastic real estate agent will help put you in a competitive sport, even with subjects, by being calculated in the offer.


Want to learn more?

Pilot Mortgage Group offers some incredibly helpful yet easy-to-digest videos series for First Home Buyers, Move-Up Buys, and Refinancing—so basically any type of purchase you can think of.

Having the honour of being recognized in the top 1% of realtors in Greater Vancouver, we only work with the best, and the team working at Pilot Mortgage Group truly are the best—we can’t recommend them enough. And don’t hesitate to get in touch with us to help realize your real estate goals!

Do You Pay Tax When You Sell Your House?

Do You Pay Tax When You Sell Your House?

If you are thinking about downsizing and selling your current property, you are likely wondering what taxes are associated with the upcoming sale. We are here to answer all of your questions—but first, make sure you’ve covered all your bases with our handy Home Sellers Checklist, and don’t hesitate to reach out to West Haven Group for all of your listing needs.

Now, let’s focus on the question at hand – do you have to pay tax when you sell your house? This isn’t a simple yes or no answer but we will help break it down.


Let’s start with the concept of Capital Gains

As we outlined in our blog, Capital Gains in Vancouver- How to Reduce Your Taxable Income, a common misconception of capital gains is that it is a tax in and of itself. However, there is no ‘capital gains tax.’ In its most simple form, you incur a ‘capital gain’ when you sell your property, for more than you purchased it for. Conversely, if you sell your property for less, you would incur a capital loss and can use that loss to offset other capital gains or carry it forward to offset capital gains in future years.

So, when do you have to pay tax and how much is it?

Since the capital gain is a form of personal income, you are required to pay tax on it…sometimes.

Whether you have to pay tax on this comes down to your use of the property. Has this property been your principal residence for every year that you’ve owned it? If so, then you are exempt from paying taxes on any gain from the sale. However, it is crucial that you still report the sale of your property on your income tax and benefit return in order for the CRA to recognize the principal residence exemption.

If your property was not your principal residence for the entirety of ownership, then you have to report the part of the capital gain for these years. This is why it is important to talk to an accountant and a real estate agent if you are considering buying another property to make sure you have a smart plan in place for your properties to protect yourself and your investments.

If it is an investment property, a rental, or a vacation home then you likely can expect to pay capital gains upon selling if you make a profit—although there are fees and deductions that will affect the gain itself, such as costs associated with buying and selling.

In terms of the actual amount, in Canada, you typically have to include 50% of the capital gains as income on your tax return. Keep in mind though that there are differences based on the provincial and national tax rates, as well as your personal tax bracket due to the taxable portion of your capital gain being added to your annual income—this is not a stand-alone payment.


Other types of tax

For this particular article, we’ve focused purely on the taxes you may have to pay upon selling your home but keep in mind that there are other taxes when it comes to property ownership including:

  • Property Transfer Tax: When you purchase or gain an interest in a property, you have to pay the transfer tax based on the market value of the property at the date of registration unless you qualify for an exemption.

  • Annual property taxes: Annual property taxes are paid for each property you own to fund services in your area.

  • Withholding Taxes: If you are a non-resident selling property in Canada, your lawyer is required to hold in trust 25% of the gross proceeds of the sale for your share of the property, until the issuance of the Certificate of Compliance by the CRA.

If you want to learn more – check out another article from our capital gains series, How Do I Report Capital Gains in BC?

We are here to help

While West Haven Group is a team of real estate specialists, please keep in mind we are not tax professionals. For more in-depth details on this, we recommend reading the Government of Canada’s Disposing of your principal residence article and also seeking advice from an accountant.  Please reach out to discuss your property needs, we can’t wait to connect. 

Urban YVR Feature – A Conversation With Jon Stovell, President of Reliance Properties on Vancouver’s Bright Future

Urban YVR Feature – A Conversation With Jon Stovell, President of Reliance Properties on Vancouver’s Bright Future

In collaboration with urbanYVR, Shawn Brown sat down with the president of Reliance Properties, Jon Stovell, to get a clear perspective on the future of Vancouver’s commercial and residential real estate.

Reliance properties is invested in our city and has a long-term vision for Vancouver which explains much of their work owning and renting out commercial and residential buildings.

“I think it’s going to be a revolutionary time in Vancouver, and I think you’re going to see a lot of rezonings coming forward”

See a sample from the interview here.

Access the full interview and recap in the link below.

Vancouver First-Time Home Buyer Process: A Step-By-Step Guide

Vancouver First-Time Home Buyer Process: A Step-By-Step Guide

At a glance, the home buying process can feel like a daunting or challenging experience, especially for a first-timer. The West Haven Group is here to simplify the process and provide you with a step-by-step guide for becoming a homeowner!

In the video below, Alec Abbott breaks down the 9 steps to becoming a first time home buyer in Vancouver.

First Time Home Buyer Process – Getting Started 

Step 1 – Choosing Your Realtor

There is no shortage of real estate agents in Vancouver, but finding the right one is very important. You want an experienced agent who listens to you and knows how to navigate the local market. By the end, you will be working hand in hand with this person so find someone you can build a relationship with and trust.
A couple of simple ways to ensure you find the perfect agent are:

  • Ask a friend, family, or colleagues to see if they’ve worked with someone they liked and would recommend.

  • Spend some time researching and looking for reviews online. Some places to start are Google and REW.

Once you’ve narrowed it down to some potential options, we encourage you to meet and interview each agent separately to assess which Vancouver realtor you’d like to work with.

Step 2 – Choosing your mortgage broker

Similar to finding a realtor, finding the right mortgage broker will ensure you will be taken care of and will be provided with the best financial guidance and advice. One additional benefit of working with a mortgage broker versus a bank is the ability to be able to search across lenders for the best rate.

If you need mortgage broker recommendations, feel free to reach out to us and we can connect you with some local mortgage brokers we’ve worked with.

Step 3 – Analyze your wants and needs

Pinpointing what you would ideally want in your future home can seem like a daunting task. Simply start by creating a list of all your wants, needs, and non-negotiable items. As an example, include things like ideal locations, whether having a patio is a must and if having a gas stove is a ‘nice to have’.
Starting this list at the beginning of your home buying process will be very helpful for you and your agent as you start touring properties.

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First Time Home Buyer Process – Shopping Time 

Step 4 – Touring Properties

This is the most exciting part of the entire process so make sure to enjoy it and approach it with an open mind. Some will find their home after the first viewing and for others, it might take a bit longer.

With every home you view, you are getting closer to finding the right one! Lean into your realtor’s expertise, ask questions and stay positive.

Step 5 – Choosing Your Price

After you’ve found a property that you’d like to submit an offer on, your realtor will do a market analysis of sold comparable in the area and the building. After taking a few factors into consideration like renovations or days listed, you will discuss your strategy.

Step 6 – Presenting Your Offer

Depending on your personal needs and the state of the market, this step can vary. Regardless, your realtor will include clauses that will protect you and keep your best interests.

When writing an offer, it can include subjects like:

  • Subject to inspection

  • Subject to financing

  • Subject to reading the strata documents.

With every offer you make, you will also have to set a completion date and a possession date. The completion date is when the title shifts from the seller to the buyer and the possession date is when you officially get your keys and can move in.

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First Time Home Buyer Process – Closing The Deal

Step 7 – Negotiation Phase

Once your offer has been submitted, your agent will negotiate on your behalf on things like price or subjects. If your offer is accepted, you will enter into the subject removal phase. Based on your subjects and what was stipulated in your contract, this time is set to complete things like:

  • Performing an Inspection

  • Finalizing your financing

  • Reading through strata docs

On the last day of your subject removal day, you have the option to put down a 5% deposit to hold the property.

Step 8 – Post Subject Removal

Once your subjects have been removed, this is the time to start looking for a lawyer or a notary to help you with the closing of the deal. This person will handle all of the transfer of funds and any legal matters that need to take care of. Around 7 -10 days closer to the possession date, you will need to sign and complete the deal.

If you need notary or lawyer recommendations, feel free to reach out to us and we can connect you with some local mortgage brokers we’ve worked with.

Step 9 – Move To Your New Home

On possession day, you will do a walk-through with your realtor to ensure the property is clean and if you had stipulated something had to be fixed, this is your chance to double-check. Once this is all completed, you will be handed the keys, and congratulations, you are a new homeowner!

Are you ready to buy a property in Vancouver?

As complex as the home buying process may seem, you are now one step closer to the purchase of your home! As a team of top 1% realtors in Greater Vancouver, the West Haven Group is here to support you through every step of the way. Get in touch with us and we’d be happy to answer all of your questions.

Ultimate Vancouver Home Sellers Checklist

Ultimate Vancouver Home Sellers Checklist

Just as it is important to have a checklist as a home buyer the same goes for selling. Getting a property ready to show, creating an effective listing to ensure the best offers possible, coordinating with your new purchase, all the way through to completing can seem like a daunting task but it doesn’t have to be. West Haven Group is here to help guide you through the steps needed to successfully sell your home and obtain the maximum return on investment.

Below we outline a Home Sellers Checklist with the top five things to keep in mind as you get ready to sell your property.


Vancouver Home Sellers Checklist #1: Find a listing agent 

The right listing agent will coordinate every detail and ensure you feel supported throughout the entire process. It is crucial to find someone you trust implicitly to have your best interests at heart.

We encourage you to meet with different agents—and don’t be afraid to ask the tough questions:

  • How long have you been an agent for?

  • What is your list-to-sale success rate?

  • What do you offer as part of this service? i.e. photography, videos, marketing material, paid and organic content

  • What are the fees associated with your services?

  • What neighbourhood do you typically work in?

  • What would your strategy be for my listing given the current market?

Vancouver Home Sellers Checklist #2: Make a post-sale plan

If you are considering selling your home then it is likely you have a new home in mind. It is important to have talked to your mortgage broker about your requirements to make this next purchase happen—do you need the proceeds of the sale for that? Are you planning to rent and then look to purchase after? What is your timeline in terms of completion and possession dates?

These are crucial details to understand prior to listing and an agent can provide guidance and create a strategy to ensure the process goes smoothly.

Vancouver Home Sellers Checklist #3: Familiarize yourself with the market 

To set realistic expectations before listing your home, it is important to be familiar with the current market and trends. These environmental influences have a huge impact on pricing, length of time listed, and number of offers.

Check out West Haven Group’s latest market update here.

Vancouver Home Sellers Checklist #4: Get your home ready to show

This step cannot be emphasized enough – the state of your home greatly affects the quality and number of offers you get.

Do all necessary repairs, refresh the walls if needed (a fresh coat of paint goes a long way), and remember to de-clutter and remove your personal items. We want people to fall in love with the home and imagine their lives there.

At West Haven Group, we help to do this through staging—home staging can net your listed property more than 15% additional profit while spending 73% less time on the market.

Vancouver Home Sellers Checklist #5: Be open-minded and get ready for the ride  

We understand that this is your home, likely your largest investment to date and it can be stressful. The right listing agent will walk you through every step of the process—but you have to trust that their recommendations are guided by knowledge and your best interests. They may need to adjust the strategy as they go to respond to market demands. For example, if the market is hot, don’t be surprised if they recommend a lower price than you were expecting as a way to get more people in the door and multiple offers, thereby driving up the end price.


Are you ready to sell your property? 

Reach out to the West Haven Group to find out more about our client-centric service and dynamic set of tools to help realize your real estate goals. We believe that integrity, professionalism, and perseverance lead a well-marketed property to sell and this belief has led us to be recognized as the top 1% of realtors in Greater Vancouver. Get in touch with us and we’d be happy to answer all your questions.

Urban YVR Feature – Impact Of Commercial Boom On Residential Real Estate

Urban YVR Feature – Impact Of Commercial Boom On Residential Real Estate

Shawn Brown sat down with CBRE commercial agent, Andre Alie Day, to learn more about downtown Vancouver’s current office tower boom. With over three million square feet of new office space under construction, it is estimated that there will be approximately 17,500 new workers Downtown.

“Assuming 50 percent decide to rent and the other 50 percent decide to purchase, that could translate to 4,375 downtown homeowners.”

See a sample from the interview here.

Access the full interview and recap in the link below.

The Future of Downtown Vancouver

The Future of Downtown Vancouver

When we faced the initial pandemic unknowns and transitioning to working from home, there was an understandable desire for many to flock to the suburbs to gain more space. Flash forward a year and many of us have acclimatized and are back working in our offices which has resulted in what some are calling the beginning of a  “U Turn” of a purchasing pattern.

Interestingly enough, we are concurrently seeing a boom like never before in commercial development with over 3.5 million square feet currently in the works. This is enough new office space for approximately 17,500 people. This tells us that there is a confident expectation for a robust demand to work, and therefore live, in Downtown Vancouver in the years to come.

Background on Downtown Vancouver 

According to the Downtown Vancouver BIA (DVBIA), the downtown peninsula is the most densely populated area in BC. It consists of two areas: The West End and Downtown. The West End (2.04 sq. km.) is known for its proximity to English Bay and Stanley Park. Downtown (3.75 sq. km.) is primarily known for its business and entertainment districts but is also home to a large number of residents who live in high-rises. It includes the neighborhoods of Yaletown, Gastown, and Coal Harbour.

The DVBIA’s most recent stats show that by the end of 2019, Downtown’s population, as well as its workforce, had both increased 10.8% since 2016. It is worth noting that Downtown’s five-year resident population growth rate remains three times greater than that of Vancouver.

Despite this continued substantial growth and a workforce outnumbering 150,000 people, office vacancies remain low at 2.6%.


Downtown development underway

Given the high demand to live Downtown and the ongoing shortage of office space, it is no surprise that commercial developers jumped on the opportunity.

As mentioned in the opening, there are 3.5 million square feet in new commercial space under development – you have likely seen the unique new Deloitte Summit office tower at 400 West Georgia Street which recently celebrated a milestone, achieving its full height of 301 ft with 24 storeys. Right across the street is “The Post”, the massive redevelopment of the city’s former central post office that will house more than one million square feet of office space. And these are just two of the many commercial developments at play.

This will lead to an approximate 12% increase in the Downtown working population. Let’s say half of those people want to limit their commute—that is an influx of 8,750 new potential buyers in the Downtown core.

Current opportunities 

Given how densely populated Downtown Vancouver is, supply will always be constrained and therefore prices will continue to climb.

New housing supply is currently made up of mostly new luxury builds and pre-sales, such as what we are seeing on Alberni, the Northeast corner of downtown, around the Viaducts area, and Robson and Smithe but these are all very expensive at around $2,000+ per square foot.

This means that realistically, most of these expected people moving to Downtown will be looking to buy resale properties.

In 2019, there were only 1,772 downtown sales under two million dollars. In short, if there are almost 9,000 new buyers expected in the near future, we are going to see a severe short supply.


Current trends in pricing and sales 

As we highlighted in our latest market update, condo sales have increased 111.7% in March compared to 2020 with 944 sales.

This desire to live in the heart of Downtown Vancouver is being revived once again by leading indicators of life going back to “normal” through increased vaccinations taking place and the expectation of upcoming easing restrictions.

The average price of a condo is $810,900, only a 1.8% increase year over year, whereas the average price of a townhouse is $1,110,200 which has seen a 6% increase. So condos, even in desirable areas like Downtown, are still accessible.

But, keep in mind, this doesn’t take into account the pent-up demand for ongoing immigration, currently on hold due to the pandemic.

So what does this mean for me? 

If you have been thinking about buying and are interested in Downtown Vancouver, now is the time to start seriously looking. Condo prices are just starting to go back up to pre-covid levels which offer a unique opportunity to get into the market—whether for a home or as an investment rental property.

Once restrictions ease with vaccination rollout expected to be completed by the end of summer, there will once again be a strong desire for housing Downtown. Then, add in these large new office spaces of major tech and finance companies bringing in even more people from across Canada and the world in the next 5+ years, coupled with the already tight supply—there will be a robust demand. Downtown Vancouver is a smart investment and now is the time to buy and we are here to help. 

The West Haven Group can help guide you in making the best property decision for you and your lifestyle. To speak with one of our industry-leading agents, reach out and connect with us!

How Do I Report Capital Gains in BC?

How Do I Report Capital Gains in BC?

In the first part of our capital gains series- Capital Gains in Vancouver- How to Reduce Your Taxable Income– we looked at what capital gains are, how they’re incurred and potential ways to mitigate or minimise the tax payable when you sell your property in Vancouver. Once you have determined whether you have incurred a taxable capital gain, it’s important to understand the process of how to actually report it to the Canada Revenue Agency.


When Do You Report a Capital Gain or Loss?

Reporting a capital gain or loss is required when you have disposed of a capital asset. For ease of understanding, we will refer to property (real estate) as that asset from here on in. You are required to report this gain in the same calendar year that you sell the property (January to December).

It’s also important to note that regardless of whether you made a gain or loss, or whether you are required to pay tax on that gain (for example, if it was not your primary residence), you must still report the sale on your income tax return.

If the property was your primary residence you will not be subject to tax on the capital gain. However, if it was a second property, 50% of the gain you make from the sale of the property is considered taxable income.

As a reminder, there is no stand-alone ‘capital gains tax.’ Rather, this figure needs to be added to your personal income for that calendar year, and you will be taxed on your overall income (including this figure), based upon your marginal tax rate for that calendar year.


How to Calculate Your Capital Gain

When it comes to calculating your capital gain on real estate, you first need to determine your adjusted cost base. This is the overall cost of the property, not just the original price you purchased it for. We strongly recommend the use of an accountant or financial professional in this step, but for the sake of example let’s say:

  • You paid $500,000 for your property

  • Plus an additional $25,000 in fees to acquire and sell it.

  • And whilst living there, spent $125,000 on renovations/permanent improvements

Your adjusted cost base would be equal to $650,000.

If you then sold the property for $750,000 your capital gain is actually $100,000, as opposed to $250,000 (based on the original purchase price alone).

Of this $100,000 only 50% is taxable. Although you need to report the transaction itself, only $50,000 would be added to your annual income for that calendar year, and you will be taxed depending on the marginal tax rate that applies to you.


How Do I Report Capital Gains Tax in British Columbia?

In B.C., capital gains or losses are reported on a Schedule 3 form. It is a self-reporting system, and once you have calculated your adjusted cost base and other expenses is really just a simple form to record the numbers. Of course, you are also required to have evidence to substantiate these figures. The submitted form must include:

  • The year of acquisition (the year you purchased the property in B.C.)

  • The proceeds of acquisition (the sale price)

  • The adjusted cost base

  • Any fees or costs associated with the sale of the property

  • The overall capital gain (or loss) resulting from the sale of your property

The Schedule 3 form for reporting capital gains (or losses) in BC

The Schedule 3 form for reporting capital gains (or losses) in BC

If you’re looking for ways to defer or minimise your capital gains, or aren’t sure if you’ve incurred a capital gain, please reach out and connect with our team. As some of the top-performing Realtor’s in Vancouver, our team is ‘on the ground’ and always adapting to the current state of the market, in order to assist our clients to acquire and profit from their property investments.

Simply reach out and connect for more information, or to see if we can help you!

Vancouver Real Estate Market Update: 2020-2021

Vancouver Real Estate Market Update: 2020-2021

With 2020 now behind us, many are wondering what the Vancouver property/real estate market will look like in the coming year. Thankfully there are a number of reports that analyse actual data (rather than sensationalised media headlines) which we will utilise for our 2021 Vancouver real estate update. Before we look at the data, however, we’d like to issue a word of caution surrounding the sensational nature of property media in general, and a reminder to always approach these ‘headlines’ with a pinch of salt.


What’s Right and Wrong With Vancouver Real Estate Forecasts?

First and foremost, it’s important to remember that property and real estate articles found in the media are often sensationalised in order to grab your attention. More often than not the media will find and exacerbate negative (or positive) or extreme examples to create marketable pieces. It is also very common to see the general media:

  • Take and highlight one aspect of a story that seems interesting, whilst ignoring other aspects that makes the story less extreme (attention-grabbing)

  • Use statistics that are overly generalised, which can often mislead buyers and sellers. These statistics can vary a lot by property type, city, neighbourhood, and sometimes even between buildings.

  • Focus on theories rather than the big fundamentals which actually affect property availability and prices. For example, immigration, unemployment levels, infrastructure etc…

The Vancouver property industry is also full of varying predictions, based on different numbers and assumptions. This often means that the media can find ‘supporting’ information to back up whatever predictions they choose to make, to reinforce their bias or attention-grabbing headlines.

Conversely, there are some quality and quantitative analyses that exist in the Vancouver real estate industry that can give you accurate forecasts and predictions, based on real data. Whilst no one has a crystal ball, these reports will:

  • Offer real/in-depth explanations based on actual figures- with notes on limitations. These tend to be longer pieces, and as such many people are not interested enough to read through them, but they are available if you know where to look.

  • Emphasise and make Vancouver property predictions around fundamental drivers such as supply and demand. Generally speaking, these reports are more reliable.

When we zoom out a little further, it’s easier to establish and predict longer-term trends by looking at the macro fundamentals such as immigration. When it comes to short term predictions and price behaviour (such as the next few months) however, the most accurate means is by way of the Sales-to-Actives ratio. That is, the percentage of active listings being absorbed by the market. This is also a version of supply and demand and can be useful for short term predictions.


How Did The Property Market Finish in 2020?

Whether it was a return of confidence, lower interest rates or pent up energy from the restrictions we saw across 2020, Vancouver’s property market finished the year in a strong position. Regardless of calls earlier in the year that an impending recession would limit movement in the property market, sales by the end of November had already exceeded those made in both 2018 and 2019.

To obtain an overall view of the market, we look at the MLS Home Price Index. This is a composite benchmark that measures the change in prices of housing features, over a given time period. When we compare the figures from the past 12 months (December 2019-December 2020), the benchmark price for all residential properties in Metro Vancouver saw a 5.4% increase. By individual property type:

  • Apartments increased by 2.6%

  • Townhomes increased by 4.9%

  • Detached homes increased by 10.2%.

Vancouver Detached Homes

As the graph below depicts, throughout 2020 we have seen a general uptrend in the benchmark price of detached homes in Metro Vancouver. Although this looks at the whole area, it’s important to note that this figure is averaged, and the median prices have varied between neighbourhoods. If you would like more information about your neighbourhood please reach out to our team.

According to the Saretsky Report and REBGV statistics, sales of detached homes in December 2020 saw their second-highest month in the past 5 years. This higher demand was compounded by dwindling inventory, and these forces have led to an average price increase of more than 10% over the year.

Vancouver Condo Market

The condo market has been impacted by a number of factors throughout 2020:

  • An increase in downtown and condo residents wishing to relocate to the suburbs where they can afford to purchase a detached property

  • A lack of international visitors or residents oftentimes purchasing investment properties

  • Various types of investors selling their condos as part of their plan to change their real estate portfolio and lifestyles related to Covid-19.

As a result, we have seen the supply of condo listings increase in Metro Vancouver. However, it’s important to note that although listings are increasing, so are sales- up 41% from December 2019- causing the overall condo inventory to drop. As you can see in the graph below, the number of condo’s available across greater Vancouver dropped significantly in the last few months of 2020, from more 6,648 listings in October to 4326 in December.

We have also seen condo inventory drop in downtown Vancouver between October and December 2020:

  • East Vancouver’s inventory reduced from 665 to 402

  • West Vancouver’s inventory reduced from 2053 to 1319.

This lowering of supply could soon be reflected by a rising price in the condo market as we enter 2021.

Potential Market Risks and Trends for the Vancouver Real Estate Market in 2021

Whilst no one can accurately predict how the market will fare across 2021, the general sentiment is clearly in favour of sellers. The annual property cycle may also see sales increase across the first half of 2021, as we approach summer and (hopefully) the end of the wave two COVID restrictions.

There are a number of considerations to take into account which could impact Vancouver’s real estate market, however, depending on your circumstances they could also be beneficial to you. These include:

  • Declining population growth across B.C. and Vancouver due to the restrictions. This can reduce the pressure on housing prices. Though, I’m sure this will quickly reverse and revert back to the rapidly expanding population pre-Covid.

  • The potential for mortgage delinquencies. However, it’s important to note that the vast majority of deferred mortgages expired in 2020, and as we’ve seen from the sales figures this has had little impact on the market to date. The government’s assistance policies seem to have worked effectively in this regard.

  • Property prices across Vancouver are near all-time-highs. This has the potential to price first time home buyers out of the market. However, a higher number of new condo buildings are expected to be completed in the coming 24 months, which may also ease some of this pressure. Additional government support may also come into play for first-time buyers/low-income earners, which can increase the availability of finance and boost sales figures.

  • Unemployment rates. This will largely be dictated by the state of the economy and COVID restrictions, particularly if they are sustained and/or reimplemented in the coming year. As it stands, the official unemployment rate in Vancouver is 7.4% of the population (up from 4.4% pre-pandemic).

  • Foreign investment dwindling due to lack of access, the newly increased Empty Homes tax rate (from 1.25% to 3%), and the 20% foreign owners tax. This should allow Canadian residents more access to the market. This being said, for a while now we have already been seeing primarily (almost solely) locals driving the market.

As we have seen in the latter half of 2020, sales of detached homes have increased across Vancouver. Presumably, this has been caused by an increase in people working from home, and a lesser need/desire to live and work in the city centre.

With a limited supply of detached homes, however, we would expect to see these prices increase, as well as a potential increase in the number of 2-3 bedroom condos available on the market as new developments catch up with the change in the market. This may also coincide with condo’s offering larger and more spacious floor plans, and home office spaces becoming a more prominent feature of new builds.

Regardless of whether you’re looking to buy or sell property in Vancouver, the best way to be informed of the state of the market is to reach out and connect with our team. As some of Vancouver’s top-performing Realtor’s, we are dedicated to achieving the results you expect and can help with each step of the property acquisition and/or sales process.

Which Buildings Allow Airbnb/VRBO in Vancouver?

Which Buildings Allow Airbnb/VRBO in Vancouver?

Almost every strata/condo building in downtown Vancouver has voted through bylaws not permitting short term rentals. Although there are strict rules surrounding the issue, there are some strata buildings which still allow for short term rentals like Airbnb and vacation rentals by owner (VRBO). You will need to apply for a license to do so, but knowing which properties allow short term rentals may factor into your investment decisions.


Does Vancouver Support Short Term Rentals?

The rise of Vancouver property in the last decade has priced a lot of residents out of the market. In order to make housing more available and affordable, a number of taxes have been implemented to try and resupply the market with unused or vacant properties. Similarly, the City of Vancouver has implemented rules and regulations surrounding short term rental properties, such as those used for Airbnb, in attempt to make housing more affordable for city residents.

A ‘short term’ rental is one that occurs for less than 30 days. Prior to April 2018, the only short term rentals available were licensed hotels and bed and breakfasts. From September 2018 however, homeowners have been able to apply for a short-term rentals business license, and use their property to supplement their income.

Whilst short term rentals are now permitted, they must:

  • Adhere to the City of Vancouver rules surrounding Airbnb/VRBO

  • Be permitted by the strata bylaws

Does My Vancouver Property Qualify for Airbnb?

The main stipulation when it comes to the short term rentals license in Vancouver is that the property must be your primary residence. That is, you live in it for at least 180 days of the year. The rental can be the entire home or a room within it, and property owners must acquire both the license and approval from their strata body to qualify. It also needs to meet the required safety standards, such as fire safety, and be considered a legal dwelling.

It’s important to note that these restrictions only apply to strata buildings. If you own a freehold property you are free to use it as you wish.

Downtown Vancouver Condo for rent.jpg

Strata Buildings That ALLOW Airbnb in Vancouver

Whilst we aim to maintain the accuracy and recency of this list of Airbnb/VRBO approved properties in Vancouver, strata rules can literally be changed at any time. The following details the most up-to-date list for buildings that allow for short-term rentals for Airbnb/VRBO, as well as which strata buildings in Vancouver allow short-term rentals for 30 days or more.

For the most up-to-date information regarding which strata buildings allow for short-term rentals in Vancouver, or if you’re looking for a buyers agent to acquire one of these properties, please reach out and connect with our team.

  • 618 and 688 Abbott Street (Also same at 58 Keefer Place as they are same development) – Firenze

  • 689 Abbott Street – Espana

  • 555 Abbott Street – Paris Place

  • 1060 Alberni Street – The Carlyle

  • 907 Beach Avenue – Coral Court

  • 890 Broughton Street – 890 Broughton

  • 1050 Burrard Street – Wall Centre

  • 1160 Burrard Street – 1160 Burrard

  • 1238 Burrard Street – Altadena

  • 1010 Chico Street – Chilco Park

  • 933, 955, & 983 E Hastings Street – Strathcona Village

  • 1228 Homer Street – Ellison

  • 1331 Homer Street – Pacific Point 2

  • 1010 Howe Street – Fortune House

  • 183 Keefer Place – Paris Place

  • 188 Keefer Place – Espana

  • 718 Main Street – Ginger

  • 1166 Melville Street – Orca Place

  • 87 and 89 Nelson Street – Arc

  • 989 Nelson Street – Electra

  • 28 Powell Street – Powell Lane

  • 933 Seymour Street – Spot

  • 1372 Seymour Street – Mark

  • 141 Water Street – Malkin Building

  • 33 West Pender Street – 33 West Pender

Strata Buildings in Vancouver That Allow Short Term Lease/Rental- Minimum 30 Day Lease

Whilst some strata buildings in Vancouver allow Airbnb/VRBO, others require a minimum 30-day lease term to be eligible for short term rental. Similar to rental properties allowing less than 30-day terms, these restrictions are dictated by individual strata regulations and can vary between buildings, or change with each meeting of the strata body. It’s also important to note that property owners are still required to adhere to the City of Vancouver rules surrounding short term rentals, including acquiring a short term rentals business license.

At the time of writing, the following properties allow for short term rentals in Vancouver, for a minimum lease length of 30 days:

  • 27 Alexander – Alexis

  • 1200 Alberni Street – The Palisades

  • 1288 Alberni Street – The Palisades

  • 1003 Burnaby Street – Milano

  • 928 Richards Street – Savoy

  • 188 Keefer Street – 188 Keefer

  • 1133 Hornby Street – Addition

We will continue to add to/maintain this list as new information becomes available. If you are aware of any other strata properties that allow Airbnb or VRBO in Vancouver or would like to notify us about incorrect/out-dated information please don’t hesitate to contact our team.

Evaluating Investment Properties in Vancouver: Cashflow and Profitability

Evaluating Investment Properties in Vancouver: Cashflow and Profitability

For first time investors, property investing can be a safe and tangible means of wealth creation. It allows you to leverage a downpayment to acquire an asset, and if you find the right property can generate both income and profit. However, there are a number of variables that need to be considered in order to determine accurate property cashflows, equity, and profitability, to decide if the investment is worth it.


Property Investing in Vancouver: Getting Started

Property investing is unique in that it allows you to leverage a smaller position (your downpayment) to acquire an asset that can be 5-6 times higher in value. For many it is an attractive, time-tested and relatively safe investment to make. However, just owning and renting a property doesn’t mean that it is generating a positive cash flow, nor that it is going to be a profitable investment on your part.

Rather, investment properties need to be evaluated on several criteria

  1. Cash flow
  2. Likelihood of appreciation
  3. Ease of renting
  4. Unit/building expenses
  5. Personal element

Your agent is the best source of information for a lot of this data and should have extensive knowledge of the state of the current market, neighbourhoods, and new developments in the area you’re interested in.


Cashflows: Positive, Neutral and Negative

Cash flow looks at the total flow of cash moving in and out of the investment. That includes any rental income, as well as deducting expenses such as strata, repayments, repairs, property taxes etc… Cash flow can be positive, neutral or negative, and can affect the overall profitability of your investment.

  • Positive cashflow: your investment is generating more from rental income than your monthly expenses and payments, generating additional income for you.

  • Neutral cashflow: the rental income is enough to cover all expenses/payments, but not to generate income

  • Negative cashflow: your payments/expenses are more than your rental income. This requires additional financial input to cover repayments.

In Vancouver, while rental rates are high, so are property prices. Positive cash flow to any significant level at the outset is impossible unless you’re putting down 35% or more (approx.). However, savvy investors love investing in Vancouver because of the number and quality of tenants, the trajectory of this world-renown city, and the historical performance of these investments.

Furthermore, a neutral cash flow will still see about 60% of each mortgage payment being paid towards your equity, which can make the property quite profitable when taken into account. Whilst positive cash flow may not be available immediately, it can become possible after principal repayments have been made, and depending on the intended term of the investment could still reap benefits long term.

What Can Affect My Cash Flows

There are a number of variables that can affect the cash flow and profitability of your property investment in Vancouver. These can affect how much rent you’ll be able to charge, your expenses, and whether there will be demand for your property and it’s location.

  • Market Variables
    -Is there a strong rental market?
    -Competition/availability in the area?
    -Standard of living
    -Proximity to amenities
    -Will a new development affect your ability to let?

  • Property Variables
    -Building expenses and maintenance costs
    Property taxes
    -Contingencies for damage/repairs

  • Financial Variables
    -Rental income
    -Purchase price

Evaluating a property investment should try to quantify and qualify as many of these factors as possible. The more informed your decision, the more likely you are to benefit from the investment.

calculating cashflows on Vancouver property investments.jpg

Calculating Profitability of Vancouver Property Investments

To figure out what sort of profit could be made from your property as a rental the main factor to consider is your downpayment amount. This would in turn give you a rough idea of how much your monthly mortgage rate would be. Along with this, you factor in things like strata fees, yearly property tax etc… to give you a base amount per month.

Right now mortgage rates are incredibly low which is a huge bonus for you as a buyer. Access to finance and lower repayments can contribute to a larger investment on your part, or reduce the burden of the investment.

Your downpayment will affect your mortgage rate and amount, but with those figures, you can calculate your monthly costs.

Monthly costs = mortgage payment (governed by downpayment size and interest rate) plus strata fees, plus annual property tax amount, divided by 12.

Once you know your monthly costs you can work with your agent to analyse market data, such as current rental prices, property prices, neighbourhoods, and individual properties and match them up to determine if your property would be

a) cash flow positive, and

b) determine if your investment would be profitable.

What About Building Equity?

A positive flow of cash is only one of the ways to turn a profit from property investment. Whilst it can make it more attractive, using the available data and your agent’s knowledge/experience, you can build a thesis as to the likelihood of value appreciation, and determine whether the equity acquired/value built is worth the upfront capital.

A good rule of thumb is to plan to hold onto a property for a minimum of 5 years. This obviously depends on many things, but ideally, you want to be in a position where you don’t have to sell at any particular time, just in case. Of course, it will also be dictated by the evolution of your personal circumstances over time.

Below is a graph of the MLS HPI pricing index. The HPI price is the board’s way of most accurately calculating true average prices. Downtown falls under the area of ‘Vancouver West’.

If we look at Vancouver West (west of Quebec Street – one block west of Main Street) apartments, we can see that over the past 10 years the HPI price increased from about $430k to about $790k. The annualised rate of return is about 6.1% based strictly on this.

However, this does not take into account the ‘leverage’ aspect of real estate investing (using 20% of purchase for an asset worth 5x as much) nor does it take into account the assured equity building each month with every mortgage payment made.

More accurately, we would need to use:

  • the initial cash investment of 20% of $430,000 ($86,000), and compare that to

  • the end equity position (790k-430k = $360k)

  • plus let’s say about $1,000 paid toward the equity component of the mortgage every month for 120 months ($120,000).

So, we start with $86,000 cash and end up with equity of $480,000. The actual annualised rate of return would be 262% in this example. If you were to sell, the profitability would be just under $400,000, before closing costs and expenses are taken into account.

Note: the formula used for annualised rate of return was [(ending value of investment/beginning value of the investment) to the exponent of (1 / 10 years)] – 1

Is Now a Good Time to Invest in Vancouver?

The property market in Vancouver over the past 10 years has been bullish. Strong demand has even seen the introduction of the City’s Vacancy (Empty Homes) tax in 2017, and the more recent provincial Speculation and Vacancy tax to try and increase supply.

More recently, 2019 saw a slower than usual Vancouver property market, until Q4 where we started to see renewed vitality. This transferred into 2020, and even with the pandemic, we have seen the Vancouver Real Estate market hold strong and continue to flourish.

In November of 2020 sales reached almost 25% above the 10-year average and we had a 3.4% increase in prices of apartments overall compared to November 2019.

Whilst we would expect property transactions in the Downtown core to stay a little slower while the world navigates COVID, we also expect vaccinations to see some normalcy return to the market, and see the return of higher demand.

Ultimately investing in real estate uses leverage to acquire a robust and tangible asset. Regardless of market forces, as the city of Vancouver continues to grow so too will the need for housing. However acquiring the right property can be the determining factor in deciding whether your property is the right investment, and a profitable one to boot.

Your agent is the best source of information when it comes to calculating cash flow, assessing the state of the market, and accounting for unknown or ill-considered variables. If you’re interested in property investing in Vancouver and would like more information, reach out and connect with us.

Property Taxes in Vancouver- Which Ones Do I Have To Pay?

Property Taxes in Vancouver- Which Ones Do I Have To Pay?

Vancouver has some of the lowest municipal property taxes in British Columbia. The actual tax rate varies year to year depending on the needs of the city, and the revenue collected is used to fund public services like schools, police, hospitals and more. However, there are also other taxes that may apply to your property, including the city’s own Vacancy (empty homes) Tax, and the more recently introduced provincial Speculation and Vacancy Tax, both of which may affect you if you don’t live in the property.

Property Taxes in Vancouver

Municipal Property Tax

Each year, property owners in Vancouver are subject to property tax, based on the fair and assessable value of their property. The rate for 2020 is $2.92568 per $1000 of taxable value. So the municipal property tax on a $600,000 property would equal $1755.

Regardless of whether you live in or lease your property, you are required to pay property taxes annually. In order to do so, you must submit a property status declaration, which will determine if you also need to pay the Empty Homes Tax.

Vancouver’s Empty Homes Tax

The Empty Homes Tax was implemented in 2017 to return vacant properties to the rental market, lest they be subject to an additional tax of 1.25% of the property’s fair and assessable value.

This tax only applies to you if you have more than one property (assuming the one you are residing in is your principal residence) and the additional properties are vacant for more than 6 months of the year. Whilst there are some circumstantial exemptions, if you are not living in the house, the Empty Homes tax may indeed apply to your property.

For an in-depth explanation of the empty homes tax in Vancouver please see Vancouver’s Empty Home Tax Explained.

The Empty Homes Tax in Vancouver


B.C. Speculation and Vacancy Tax

A third property tax- the Speculation and Vacancy tax may also apply to your property in Vancouver if the property is not your primary residence, and is vacant for more than 6 months of the year. According to the B.C. government, the Speculation and Vacancy tax is ‘designed to discourage housing speculation and people from leaving homes vacant in B.C.’s major urban centres,’ like Vancouver.

As such, all property owners in the Metro Vancouver regional district must also complete a provincial property declaration (separate from the declaration required for the Empty Homes tax).

The tax rate itself varies depending upon your residential status. From 2019 onwards, the provincial Speculation and Vacancy tax rates are:

  • 2% of the properties assessable value if you are a foreign owner or satellite family

  • 0.5% for Canadian citizens or permanent residents

Do I Have To Pay Property Taxes in Vancouver if I Don’t Live in the House?

When it comes to which taxes you have to pay, and how much they equate to, it really depends on how you use the property. Regardless of how your property is used, you or whoever is listed on the property title will be subject to the annual municipal property tax.

If the property is leased, or occupied by yourself or your close family, it will not be subject to the additional taxes. However, if your Vancouver property is not listed as your primary residence, and is vacant for 6 months of the year or more, you will also be subject to both the Empty Homes Tax and the B.C. provincial Speculation and Vacancy Tax.

As an example, if you are a Canadian citizen or permanent resident, the tax on a $600,000 property (based on the most current rates) would be:

  1. Municipal tax = $1755 (as above)
  2. Empty Homes tax (1.25% of property value) = $7500
  3. Provincial empty homes tax (0.5% of property value) = $3000

Total annual property tax = $12, 225.

Similarly, if you are not a Canadian citizen or permanent resident, your annual property taxes would be:

  1. Municipal tax = $1755
  2. Empty Homes tax (1.25% of property value) = $7500
  3. Provincial empty homes tax (2% of property value) = $12,000

Total annual property tax = $21, 255

Whilst there are some exemptions to these taxes, they will be applicable in most cases if the property is vacant and is not your primary residence. If you’re unsure whether they will apply to your property, or are interested in acquiring an additional property and want to understand the tax risks, reach out and connect with us.