Well it is now 2017 and looking back it is safe to say that 2016 was arguably the wildest year in the history of real estate in Vancouver. Record price jumps, daily price increments and government regulation have been a few factors that contributed to the wild year that we just saw. Here is a month to month breakdown of how the year in Vancouver looked.
Vancouver real estate yearly review
As always January real estate news is based on looking back at the previous year. The value of Vancouver residential home prices increased by 16.9%. This recorded as the fourth highest increase in BC history. West Van was the biggest increase at 17.9 per cent. Royal Lepage predicted a 9 per cent increase going into the year.
This was the first month that we saw the lovely term “Shadow Flipping”. The Globe and Mail coined the term and people stuck to it. It refers to agents assigning contracts multiple times before completion. The government jumped on this and in the following months tackled the issue.
On February 15th the government increased the minimum down payment for all homes after $500,000. This was not taken nicely by those struggling to save up for a down payment.
The government decided to tackle the “shadow flipping” issue. They implemented provincial policy to limit the profit of assigning contracts. This came with a variety of feedback but overall a positive feeling moving forward for most in the industry.
The Spring market was very hot and March proved to be the busiest month of the year in terms of the number of sales, and the busiest month to date in Vancouver.
A home vacancy report showed that there were 10,800 vacant homes which represented less than 5 per cent of the homes in Vancouver. Gregor Robertson found this to be too many (See June).
The city of Vancouver approved it’s plan to provide 300 below market homes to eligible candidates.
A variety of media outlets came out and said that there would be a mass exodus of millennials from Vancouver if the prices continued to soar.
Christy Clark took away the Real Estate Boards ability to self regulate. This came on the heels of the shadow flipping issue. She stated that the Real Estate Board would be governed by a new superintendent.
Arguably the biggest news of the year came at the end of July when the government imposed the foreign buyer tax. This tax amounted to a 15% tax on home purchases for all non residents of Canada. The deadline was August 2nd, which caused a serious rush for those looking to close before the deadline.
This month all we heard about was the foreign buyer tax. Deals collapsed, agents scrambled for their clients and the collateral effect was felt throughout the city. The media jumped all over the news and we saw several lawsuits getting started.
Stats showed that sales were WAY down, over 63 per cent year over year, however this did not account for the sales that were pushed up to beat the August 2nd deadline.
A class-action lawsuit was launched on September 19th against the government for damages incurred by those affected by the foreign buyer tax.
Stats were much less dreary now as they were in early August.
Another shake up! The Canadian government implemented new mortgage rules for those with less than 20% down. A new stress test was mandatory for qualifying for an insured mortgage. Buyers would now need to qualify at a much higher rate (more than 2% higher). This caused more outrage from first time buyers as many were now pushed out of the market.
To make the year even more memorable, the US elected Donald Trump to be their President. The day after the election we saw 3 times the amount of searches coming from US citizens looking to relocate to Canada.
It was reported by the Urban Development Institute that new home sales had dropped at the same rate as resale sales.
A 3.9 per cent hike in Vancouver property tax was implemented with 0.5 per cent going towards combating the fentanyl issue that grew in Vancouver. Home owners are now on the hook for the new increase.
Christy Clark also came forward with a new loan program for first time buyers. The program will help first time buyers come up with their downpayment as the government will loan up to 5 per cent of the property price as an interest free loan for 5 years.