Vancouver Real Estate: Should I Buy Or Sell now?
Introduction
Knowing when to buy or sell your property is a complicated issue due to numerous factors that need careful consideration, such as mortgage rates, foreign investment, urban planning and gentrification. The evaluation of these articles serve as a guide, but naturally should be taken with a grain of salt as they are blanket overviews and do not take details of a personal scenario into account. With that being said we believe that some of the important aspects of the market to consider are foreign investment, the impact of Vancouver’s culture on the market, and potential mortgage rates. These topics will be accompanied with appropriate articles that we consider to be less biased then the majority of the information available.
This Global News article written by Justin McElroy hints that listing ones property would be incredibly beneficial, as all major Canadian banks have majorly lowered their five-year term mortgage on two separate occasions since January. The lower rate of 2.79% has helped encourage Vancouver’s housing market to escalate in the last few months, as many home owners are finding that they can receive a substantial gain over their asking price that usually ranges from $100,000 to $200,000. Echoing the report from the Real Estate Board of Greater Vancouver, that houses being sold in February were 20.2% higher then the decade average for the same month. Reiterating the first line, if you are planning on selling your home then the increased profit is great incentive to do so. It is also the perfect time to buy, given the low interest rates. However, with the added incentive comes more competition – in other words, it is the right time to buy a house in Vancouver as long as you have about 5 million dollars at your disposal.
We chose this article because Global News is a respected news outlet that has reliably provided information since 1994. The article also provides relevant links that support its findings, and a news video about the issue as well.
Atrina Kouroshnia’s article on the Huffington Post advocates the purchase of a home, in conjunction with the largest down payment manageable. A down payment of less then 20% is undesirable because mortgage insurance would also need to be paid for as well. With a down payment of 20% only $1,175 a month would be necessary on a $350,000 mortgage, making the costs very comparable to renting. This creates the decision of whether your long term plans constitute the purchase of a home, or simply a temporary rent. With the lower mortgages however, now is the time to buy a house and mortgage, gaining equity, rather than continue using that money towards the ever-worsening rental fees.
We chose this article because it provides useful information that is reliable due to Atrina being a mortgage professional. The article may be slightly biased towards the purchasing of a home, but this viewpoint is supported with good reason.
This article, written by Pete McMartin, summarizes the unprecedented increase in property value diffusing across Vancouver at an ever-quickening pace. A map of assessed property value for single family homes has, in years past (last documented in 2010), shown a relatively small swath of single family houses priced 1 million or more, about 33%, mostly located on the west side of Ontario street – the “Million dollar Line” as daubed by Andy Yan, urban planner and creator of the map. In 2015, however, this line has completely disappeared – now 66% percent of single family homes are now priced I million or up. Instead of finally reaching a plateau, as seemed likely last year during a pause in the continuously climbing market, real estate has reached an all-time high and continues to rise. This shows the high level of competition in terms of demand, but also the reason one should by now; the market is increasing steadily without signs of stopping – even those that have been projected in the past have turned out to be only temporary lags – this article proposes that instead of leveling, the market will simply spread to a larger and wider geographic. Buy now!
We chose this article to illustrate the highly competitive nature of the current real estate market and the effects it has on the demographics of Vancouver. Although well researched and factual, this piece was written by Pete McMartin, an opinion columnist for the Vancouver Sun, so it is definitely not without bias – (Mr. McMartin usually supports leftist ideals). However, this DOES represent a large demographic of the population while using proven facts and figures to support its perspective.
This article shows the direct correlation with the competitive, expensive housing market seen in Metro Vancouver comes the automatic gentrification of many poorer areas – in particular the Downtown Eastside. As prices rise and areas that were once impoverished or low-income are becoming valuable, the people that inhabited those rapidly changing regions are being forced out by the soaring prices. Simultaneously, however, this gentrification marks a “revitalization, reinvestment and renewal” of these communities and their heritage. How can these factors be reconciled? The author, Brent Toderian, a city planner and urbanist, suggests “shared neighborhoods” – an integrated community with a more diverse population, revitalization without actual displacement of the lower classes. Written by a city planner and urbanist as a blog article for the Huffington Post, Toderian presents the most ideal (and most idealistic) vision of Vancouver’s ability to adjust to its own gentrification.
We chose this article because it provides a very different angle on Vancouver Real Estate than the others, bringing to light the more cultural side of Vancouver’s housing market. As this issue continues to gain prevalence and relevance across Metro Vancouver, public opinion becomes increasingly voiced, demanding systemic change and governmental intervention. While this issue does not directly pertain to real estate prices, it does affect the current and future market in highly unpredictable ways (especially if the government were, in fact, pushed into intervention). While we do suggest buying now with the current market, be wary of the outlying political and social factors, as they could induce major change to the local market very quickly albeit indirectly.
This article describes how a lot of the Chinese are investing in Vancouver real estate, but are now broadening interest from the housing market to all types of property and development. These new investments include tourism opportunities such as wineries and resorts. Even water is a burgeoning commodity – exporting as much as 200 containers to China per month. In addition, a new business powerhouse is on the rise – many young Chinese who came to Vancouver for school are now heading new, innovative types of development, such as Ben Bi, a 34-year-old who is now developing a high-end multi-home complex.
Financial post is a well known and trustworthy website. This article is very informative in terms of the changing nature and possible future of foreign investment, specifically that of Chinese businessmen. Although the upcoming shift in focus from housing to a more diversified property market may raise overall property value even more, it could have the opposite effect as foreign investment refocuses.
This article explains how the Chinese buy houses in Vancouver, often multiple, living in them part time or even not at all – this can sometimes disrupt the community of a neighbourhood, but it has also served to continually raise prices at an astounding rate, also aiding the selling of appliances, renovations, and furniture. One Chinese businesswoman, Qiqi Hong, now owns four houses costing from 1.3 million to 6 million, as well as a downtown condo for weekend use. In terms of cashing out and buying as investment, the house prices are indeed “perfect” as Qiqi Hong claims.
This article is valuable because it involves an interview with a Chinese lady by the name of Qiqi Hong who is an investor and owner of a Vancouver house, and so provides insight into one of the most influential demographics of Vancouver real estate.
Conclusion
In summation, despite the uncertainty of the market in terms of foreign investment and government intervention (or lack thereof) we suggest buying if you have the financial and personal ability to do so. With the low interest rates, now is a good time to risk mortgage in order to gain equity; this is provided you plan on long-term investment in a home. With a steady stream of foreign investment keeping demand high and prices soaring, the likelihood of bubble-effect or even a plateau seems, for the immediate future, unlikely, as seen in the studies and projections made in past years. Although there is always a chance of devastating events to the market (i.e. natural disasters) we are confident that the value of Vancouver property will continue to rise for the immediate future. Finally, be aware of the indirect factors that could influence your investment – with increasing gentrification and shifting demographics, the culture of your new neighborhood, not to mention that of Vancouver as a whole, could be highly changeable and transient. Buying a house, especially in Vancouver, is a difficult and costly decision; after considering the conflicting factors we highly suggest you buy rather than sell, but be sure to make an educated, personal decision.