Archive for June, 2014

Changes to B.C.’s Property Transfer Tax would help home buyers

Tuesday, June 10th, 2014

If you’ve bought a home in Metro Vancouver in recent years, you’ve probably felt the sting of the Property Transfer Tax. But the B.C. Chamber of Commerce thinks it has a solution to ease some of that tax pain and it involves shifting the tax burden from British Columbians to deep-pocketed foreign investors.

Currently, home buyers pay one per cent on the first $200,000 of a home’s sale price and two per cent on the rest.

The Chamber wants to shift the tax burden, with a new proposal that would have B.C. residents pay one per cent of the entire purchase price and foreign investors pay two per cent.

“It basically says if you are not a resident of B.C. and Canada and you are a property owner, you will pay more in effect than those who are residents of British Columbia,” said John Winter, B.C. Chamber of Commerce CEO.

Under the new proposal, the Chamber says the B.C. government would still collect the same amount of money, close to $1 billion a year.

However, the B.C. Finance Minister is not buying it. Mike de Jong says the province wants and needs foreign investment.

“I think that’s the best way to chase people away,” said de Jong, “People have choices, and we can decide in British Columbia to welcome the world, to welcome investment and the jobs it creates, or we can chase people away. I know which strategy I prefer.”

B.C.’s property transfer tax is the highest home tax in Canada, brought in by former premier Bill Vander Zalm when the average price of a home in Vancouver was just under $150,000.

The B.C. Chamber of Commerce is not the only organization trying to force changes to the 27-year-old tax. The Real Estate Board of Greater Vancouver wants to see the PTT threshold raised from $200,000 to a more realistic $525,000.

“I’d like to see British Columbians have a fairer tax, one that’s based on not what the conditions were in 1987 but the conditions of today,” said Ray Harris, president of the REBGV.

The chief economist for the B.C. Real Estate Association also has some ideas on how to make the PTT fairer. Cameron Muir suggests indexing the tax to some sort of inflationary measure, so British Columbians don’t have to pay more and more as prices rise.

The B.C government has recently changed the PTT threshold to ease the burden for first time home buyers and the Finance Minister has told CTV News, he’s now looking at finding additional relief for all buyers.

“Probably the thresholds are the more effective and realistic way to do that and we’re looking at that now as part of the budgeting process for next year,” said de Jong.

Still, the Clark government is hoping to deliver another balanced budget and reducing the PTT would mean reducing the cash flow into general revenues.

Source: Lynda Steele and Sandra Hermiston, CTV Vancouver

It’s a seller’s market in Greater Vancouver for the first time in 3 years

Wednesday, June 4th, 2014

A gauge closely monitored by the real estate sector, called the sales-to-active-listings ratio, reached 20.4 per cent last month – the first time since June, 2011 that Greater Vancouver’s housing market has crossed into seller’s territory.

The industry deems it a balanced market when the ratio ranges from 15 per cent to 20 per cent. It is considered a buyer’s market below 15 per cent and a seller’s market above 20 per cent.

The number of properties changing hands is edging up while active listings are slipping, the Real Estate Board of Greater Vancouver said Tuesday.

Residential housing sales rose to 3,286 in May, up 14 per cent from 2,882 resale properties that sold a year earlier. Despite the rebound, the latest monthly sales still lagged the 10-year average of 3,514 for May. There were a total of 16,072 active listings last month, down 6.7 per cent from May, 2013.

Some housing watchers have said Ottawa’s shutdown of the federal immigrant investor program in February might erode sales volume, especially for high-end properties. But so far, the impact has been muted, said Shaadi Faris, vice-president at Vancouver-based Intergulf Development Group.

“The perception about people who have no connection to B.C. arriving to flood the market with investment properties is overblown,” he said in an interview. “The immigrant investor program being removed didn’t have as large a ripple as some might have thought.”

Greater Vancouver’s average price for single-family detached homes sold last month was $1,218,772, up 4.2 per cent from a year earlier.

Mr. Faris said that as prices for detached houses continue their march upward, prospective first-time buyers are increasingly looking for townhouses and condos in the suburbs.

Intergulf oversees the Grand Central condo project in Coquitlam, where the developer completed the first high-rise in 2009 and the second in 2012. A third tower, the highest at 37 storeys, is set for completion later this year.

“Three or four years ago, there were a lot of new projects that came on. There was an oversupply in Coquitlam, and it took time to get through that inventory,” Mr. Faris said.

Coquitlam condo prices have dipped 4.1 per cent since May, 2011, but have risen 3 per cent in the past year. The Evergreen SkyTrain line, scheduled to open in the summer of 2016, will have a stop near the Coquitlam Centre shopping mall. “Evergreen isn’t pie in the sky any more,” Mr. Faris said.

Combined index prices, which strip out the most expensive resale properties on the Multiple Listing Service, climbed 4.3 per cent year-over-year to $624,000 last month for Greater Vancouver’s detached homes, condos and townhouses. The index price for detached homes in May was $966,500, up 5.4 per cent over the past 12 months. The townhouse index price gained 3.1 per cent to $469,100, while the condo index price rose 3.2 per cent to $377,500.

Ray Harris, president of the Real Estate Board of Greater Vancouver, said statistics on existing homes sold show that demand is strong. The region’s housing market is the most active it has been since the spring of 2011, he said.

For detached properties, three neighbourhoods made the million-dollar club in May’s home price index: Vancouver’s West Side saw its price index increase 7.8 per cent over the past year to $2,229,800, West Vancouver’s gained 8.1 per cent to $2,009,200 while Burnaby South’s advanced 4.7 per cent to $1,007,400.

In the Fraser Valley, total residential, commercial and retail sales last month climbed to 1,633, up 18.4 per cent from May, 2013. Last month’s index price for detached homes in Fraser Valley, which includes the sprawling suburb of Surrey, rose 3.1 per cent to $566,400.

Source: Brent Jang, The Globe and Mail

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