Excerpt from REM:

Canadian banks and credit unions have always nurtured a close partnership with real estate brokers who refer mortgage clients to their branches. That partnership has worked well, so there was no reason to disrupt the status quo. Ask a banker today if they intend to enter the real estate brokerage business, however, and there will be an awkward pause.

The new challenge to the traditional bank/real estate partnership is the disruption brought on by the emerging proptech companies. Most of the large Canadian banks have a U.S. presence so they are seeing how this story is playing out in the U.S., which is likely causing concern.

Insightt now predicts that in the next five years, most major banks and credit unions will own their own real estate brokerage company. Here are some of the reasons we think that will happen.

1. Precedent set:

Desjardins Group acquired DuProprio/Purplebricks for $60.5M in July 2020, which was duly noted by their competitors. That acquisition provided an opportunity to assess potential industry fall-out or other issues that might come from a bank acquisition of a real estate company.

Desjardins’ ownership of Purplebricks appears to be a “win-win” in the market and appears to be progressing favourably for all parties. Desjardins continues to show their innovative ways with a recent announcement of a majority ownership in Reno-Assistance, a company that pairs clients with reliable contractors who can execute large-scale residential or commercial renovation projects.

2. A lucrative revenue source up for grabs:

Residential real estate brokerage drives annual revenues in excess of $14.5 billion. This new and material revenue stream can be leveraged to provide customers with cash rebates, mortgage interest rate buy-downs, pay legal closing costs and other value-added solutions that benefit the end consumer.

Referral fees and cash rebates are long-standing and popular practices in the relocation management and affinity group industries. New proptech leaders such as Nobul have already tapped into this lucrative and successful practice.

In addition to this new revenue stream, bank ownership of real estate brokerage companies expands a list of servicing opportunities in the corporate, government and affinity group markets, where banks already play.

3. Access to the real estate data:

Perhaps the best reason for banks to become directly involved in the real estate industry is the access to property data available to real estate brokers. The benefits of this data to Canadian Banks include:

  • Showcasing customer real estate listings on bank websites to keep existing customers engaged and to attract new customer buyers
  • A better understanding of housing market trends and risks
  • The ability to create internal valuation models to help the bank and its customers better understand current market value

4. Canadian banks are already dabbling in real estate:

RBC Ventures is already the front- runner, launching new and exciting solutions that are challenging the status quo within the real estate industry. That includes:

  • Real Estate Search Project: RBC Ventures has partnered with OJO Labs to launch a better way to search for real estate properties. They are now in beta testing in the Greater Toronto Area. By playing a role in the house search, RBC gets early access to customers for mortgage and other concierge services required in the real estate transaction.
  • MoveSnap: RBC acquired MoveSnap, a personal moving concierge that leverages technology to help real estate clients manage address changes, transfer of services and more.
  • Smart Reno: Smart Reno connects consumers to qualified renovation professionals while supporting contractors and trades to grow their businesses.

CIBC announced a partnership with proptech start-up Properly in 2020 and all banks are actively trying to stay ahead of the curve by participating in these communities in some way, shape or form.

While most Realtors see Zillow as the biggest potential real estate industry disruptor, we see a more significant change to the real estate industry potentially coming from Canadian banks acquiring proptech real estate companies or building their own real estate brokerages.

Canadian banks and credit unions guard client relationships closely. The ability to service clients earlier in the real estate transaction, help them with their mortgage and make the remainder of the real estate process seamless are all valid reasons for banks and credit unions to own a real estate brokerage.

As proptechs continue to disrupt the real estate industry, Canadian banks are going to continue supporting these new innovators and they may even to come out of the real estate closet by acquiring one of these proptech real estate companies in the not-so-distant future.


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If you sell your home, only the portion you’ve been living in is exempt from significant federal taxation – which could disincentivize rentals.

The federal government of Canada has begun cracking down on capital gains taxes, which home owners are only exempt from on the sale of their principal residence.

Laneway homes and rental suites on a property are not exempt from capital gains tax upon the sale of the home, Western Investor editor Frank O’Brien explained to last week’s Real Estate Therapistshow on Roundhouse Radio 98.3FM.

The federal government has introduced a new rule that for the first time requires home owners to declare the sale of their principal residence in their annual income tax return, as of the 2017 tax year. As has been the case for many years, income from rental units – including laneway homes and suites on the property – must also be declared.

This new combination of information will allow the Canada Revenue Agency to see where home sellers are selling a principal residence that has been operating rental suites, leaving the portion of the home that was rented out liable for capital gains tax.

“People have been playing pretty fast and loose with the principal residence exemption on your home… It’s not just foreign buyers, it’s Canadians themselves who have been doing this for years,” said O’Brien.

“The problem now is that there has been rapid price appreciation in places like Metro Vancouver, and increasingly more homes are being allowed on individual lots [and they are required to be rented out or face Empty Homes taxation.]

“If you have a single-family home with two rental suites in the basement and a laneway house, all rented out. Only a third of the house could be said to be the principal residence and the rest is income-producing property and subject to capital gains tax.

“The bottom line is, say you sell the house and it’s worth $3 million. The government says ‘Aha, but $1 million of that property value is not exempt from capital gains.’ … The tax on $1 million, if you’re in the higher tax bracket – which you probably are in this scenario – is $238,500. If you’ve made a $200,000 capital gain, you pay $47,000.”

He added, “So now you have to start thinking, is it worth doing the rentals, because you may lose at the end, if it’s going to be subject to capital gains tax? It could remove these units from the rental pool.”

When asked if this is at odds with the City of Vancouver’s mandate to increase the numbers of basement suites and laneway homes being added to the rental pool, O’Brien agreed.

He said, “This is an indication of how the different levels of government don’t co-operate together on the housing file, with the federal government doing one thing and the province and municipalities doing something else – and the poor homeowner is just trying to follow the rules. But they’re the ones who get blindsided. It’s a great idea to have low-density rentals to help with the mortgages in the most expensive places in Canada – not so great if the homeowner is going to get nailed with huge capital gains tax. And a lot of these are older homeowners who are going to get nailed.”

Resource: http://www.rew.ca/news/selling-beware-capital-gains-tax-on-rental-suites-laneway-homes-1.21357427 

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I came up with this article and just thought to share.. Enjoy!

Decorating Ideas Inspired by 6 of the World’s Most Stylish Countries

Ready to let your design style take flight? Here are 6 recommendations I really love from around the world. 

1. Sweden: Monochrome. Graphic in Black & White

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: Sachin Mahajan and Maggi SamirSource: www.sketchuptextureclub.com

Is your living room a tad chaotic? Steal a page from Sweden's propensity for pale interiors and you'll be en route to serenity now. A tight black and white colour palette, including typographical art (very Swedish!), pulls the look together. For a relaxed vibe, leaning artwork, a low-slung sofa and a sloppy pouf rounds out the aesthetic.

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: Stephan JulliardSource: www.stephanjulliard.com

Dramatic ceilings, architectural detail, herringbone floors and an ornate mirror — usually gilded gold, but in this case white — are the ingredients for a Parisian interior (a Serge Mouille chandelier is also a staple). This Haussmannian stunner was designed by Paris-based Studio Razavi, and can be emulated much more modestly. Pick up a Beni Ourain area rug, gold mirror, Mouille-inspired fixture, add panelling and you're well on your way.

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: Kyle Smith BornSource: www.kylebornphotography.com

Do you have a good relationship with the proprietor of a plant shop? No? Well, forge one stat because you'll need an armload of hanging plants and a big fat cactus to start your journey to Palm Springs nirvana. Created as part of the One Room Challenge by Philadelphia interior designer Michelle Gage and stylist Natalie Jacob (this is her pad), this boho living room is one of our favourites. It's so inviting! We're crushing on the pink sofa, happy wallpaper, leather pouf and cross-hatched chairs. Find out more here. Note: Most of the pieces are from affordable retailers.

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: Tayor HowesSource: www.taylorhowes.co.uk

Comfort meets elegance in this lovely Victorian farmhouse in Wiltshire, England, designed by London-based interior design firm Taylor Howes. Soft mauves, wide wingbacks, a leather coffee table and sumptuous gathered drapery are key elements to the look. It feels almost wrong to use a smartphone in this room — settle down with a book, instead. We love how the designers wove in purples and blues throughout the traditional-meets-today design, seen here.

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: Hoshinoya KyotoSource: hoshinoyakyoto.jp

Japanese design is centred around tranquility, so put the tchotchkes away and follow hotel Hoshinoya Kyoto's lead. The riverside resort features perfectly preserved scenery and architecture that has been defined by silence, beauty and luxury for centuries. While your own living room may not have a view of lush greenery, you can adopt the country's decorating principles. Start with one basic rule: Kill the clutter. Next, create a monochromatic palette, add wooden elements, low seating and glass-panelled sliding screens.

Decorating Ideas Inspired by the World’s Most Stylish Countries
Photo Credit: MorosoSource: moroso.it

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CONDOS and TOWNHOMES are what’s hot!
Vancouver’s real estate market is going through reverse cycle with attached home (condos and townhomes) prices rising faster than detached homes. This is largely due to empty nesters downsizing and the affordability these homes offer to new home buyers. Across the Lower Mainland, the areas that reflect the biggest rates of increase are Coquitlam with 10.1 percent, followed by Vancouver East with 9.5 percent and Richmond with a 9 percent increase.
In its April release, the Real Estate Board of Greater Vancouver states that so far this year, sales for condos and townhomes have accounted for 68.5 percent of residential sales. This trend is up from last year which accounted for only 58.2 percent.
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We all know that it isnt easy for most millenials to buy a home these days in Metro Vancouver.  But these 4 local homeowners born in the 1980's and 1990's showed that nothing is impossible if one wants to make some signicant sacrifices to their lifestyle to attain their impossible dream.

Tej Kainth expressed her relief that she made the decision to plunge into the market, as an executive of Tourism New Westminster, she had seen the transformation of the Royal City's downtown core in the past few years, so when an opportunity in 2012 for her to buy a 2-bedroom condo unit where completion is not till 2015, she knew she had plenty of time to prepare before she moved in.  She already had a 10-percent down payment; to get to 15-percent, she borrowed from her mom and dad.  Kainth began repaying her parents in regular increments while still lives at their home. Although she made sacrifices to cover strata fees and other expenses for her New West condo by not eating out as much and having close attention to her budget, but that's offset by the joy that comes from hosting her friends at her own home.  She also walk to and from work, she rarely uses her car so it saves her money for gas and parking.

Samson Tam is one of those young Millennials homeowners with easy access to Skytrain.  At 27, he's unto his 2nd home after buying a pre-sale unit on Main Street - Science World Station.  Raised in Coquitlam, Tam moved to Ontario to earn his Engineering degree.  During his coop terms in university, he saved as much as he could with the goal of buying a home in mind.  Soon after we found a job in Toronto, he bought a small place after his parents provided a loan as a downpayment, he recalls "for the first 2 years of mortgage, it was really, really tough.  My chequing account was never over $1000".  After gaining more experience, he was hired as an engineer back here in Vancouver, his parents adviced him to get a small 660 sf unit near Science World.  His adviced to young people without liabilities to save money if they're living rent-free with their parents.  "People are blowing money on expensive dinners, partying, weekend things" Tam said.

Another Young Homeowner, 31 year old Samantha Stewart, said that she originally wanted to buy a place in downtown Vancouver but after market research, she pulled the trigger on a two bedroom resale in the Fraserhood area for under $400,000.  She noted that the extra room will come in handy if she decides to get married one day and have a child.  Stewart also acknowledged that she cant just fly away for a three-month vacation nowadays.  Like other millennials, she also received help from her family for the downpayment of her unit which has kept her monthly mortgage of $1400 which is slightly higher rate than if she rents a basement suite.

25 year old Commerce Specialist Rita Lee, is moving with her 25-year old boyfriend into their first condo this October, her parents instilled in her the importance of putting her name on the title and own a property.  They bought a small place in Gastown area, "we could have gotten a bigger place in Kingsway area but location is very important to us" says Rita.

The recent mortgage rules have upped the ante for first time home buyers.  This month, the federal government declared that anyone with a downpayment of less than 20 percent of purchase price will only obtain government-backed mortgage insurance under this condition:they must qualify at whichever is higher, their contracted rate or at the Bank of Canada's 5 year fixed rate.  Also, all homebuyers will face a "mortgage stress test" before getting qualify for a mortgage insurance.  More info to come on the New Mortgage Rule.

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Last weekend I had a chance to spend some time and have dinner with a school mate visiting for the first time here in Vancouver from the Philippines.  Besides the beautiful city, amazing views, Stanley Park, Granville Island the clean air and water that we are blessed with, she was quite surprised with the number of Filipinos living in our city.  She asked me “Emma, why is it that many of our kababayans that I meet seems so busy. They would have full time job, with a part time job on the side.  It’s actually quite exhausting listening to their daily routine”.   I told her that is the Asian immigrant work ethic.  Parents are willing to make sacrifices for the future of their children, and others being given a chance to earn a good living.  A few years back, I knew of a couple with their boy wanting to rent a whole house.  I initially questioned how they can afford it, and why rent such a big place. Both parents worked a number of jobs, took courses to enhance their.  For additional income hosted several home stay students.  Yet with all their sacrifice, creativity and team work they made it work.   They are now proud homeowners running a franchise business.

I recently found an article from BCBusiness by Felicity Stone:

In the article it explains how an ongoing research by UBC professor Daniel Hiebert based on national household survey data shows, 53 per cent of landed immigrants who arrived between 2006 and 2011 became homeowners in that period. Chinese immigrants at 73 per cent showed the highest rate of home ownership, followed by 52 per cent of South Asians, 51 per cent of South Koreans, and 44 per cent of White and Filipino immigrants.  Hiebert told BCBusiness “Most of the stories that appear in the press on immigrants are about the difficulties they’re having getting economically integrated into Canada, and yet their rapid acquisition of home ownership suggests that there’s a piece of the puzzle we’ve been missing.  Maybe things aren’t quite so easy in the labour market, but at the same time they are managing to buy houses pretty quickly so there are more things going on.”  Though the study did not include the property values, there were about 100,000 homes purchased in Metro Vancouver in his study.  

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Is it a case of supply and demand or Foreign Money that are driving unaffordability in real estate Market in Vancouver?

The BC government continue to see that the real estate industry’s rapid home price increases are due to supply and demand while 2 Vancouver-based economists specialize in real estate  say that outside capital flows are the driving forces to unaffordability right now. “These housing prices do not make sense as a live and work proposition.  They make sense as bags of cash hiding out in real estate looking for a safe return”.

The BC Budget for 2016 try to resolve and help the home ownership within reach of more people with the following added: 

-          PTT (Property Transfer Tax) exemption for buyers of new homes that are priced up to $750,000 to $800,000

-          An increase to 3% for properties more than $2M for PTT; and buyers to self-report their nationality when they register their property.

In Budget briefing documents, the province sees that the Lower Mainland has historically had high housing prices and supply constraints demand from population growth are behind the price increases.

One director of a huge Urban Development mentioned that the lack of supply was the only answer to this dizzying levels of home price increases, another UBC professor mentioned that  Vancouver's land constraints and population increases were the main factors behind price increases , another point is the lowering of the Canadian dollar and massive change in the official currency reserves in China where wealthy individuals and companies are trying to get their money out of China in response to their economic slowdown.

There is a group of academics at UBC and Simon Fraser University who developed a proposal to charge higher property tax if property owners don’t live in the property or don’t report income in Canada.  The government seems to be seriously considering the proposal.  

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Developers Eyeing Old Condominiums and Townhouses

The proposed provincial Strata Property Act allows 80% of strata owners, rather than the current unanimous vote, to dissolve the strata. Under this change, B.C.'s strata owners may find it easier to dissolve their strata corporations and sell the entire building. The new legislation has passed its first reading and is projected to come into effect by the end of the year.
Benefits to Strata Owners Sellings

Strata owners could potentially benefit from the windfall of this change as developers hone in on this development option. As older strata corporations reach the end of their "life cycle", common property components begin to fail, requiring expensive repairs. Strata owners may prefer to sell the property to developers who can put it to more profitable uses.  
"Strata members living in a low-rise building on a large property may see the opportunity to have the land redeveloped into a larger building with more units," says Darren Donnelly of Clark Wilson LLP's commercial real estate group. 
Targeted Stratas
Real estate agent Lance Coulson, who specializes in multi-family property with CBRE commercial real estate, espects developers to focus on aging and smaller low-rise condominium projects where it would be easier to get most owners to agree to sell. 
The first condominiums and townhouses in B.C. were built in the mid-1960's. Some of the older complexes found close to SkyTrain stations or on major intersections may have lower density than the current municipal zoning allows. 
However, Commercial real estate specialists anticipate a rush of applications under this new scheme if the vote is right at the 80% mark and a minority of owners oppose selling. The court would only allow the sale to proceed if the real estate broker or developer could demonstrate that the opposing owners would receive the maximum value for their units and that the project would be widely marketed.
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Canadian House Prices Rise is Third Highest in the World

The Canadian house price rise is the third highest in the developed world, after Ireland, Sweden, and Australia according to a Scotiabank report.


The report shows Canada’s 8.3% year-over-year rise in the second quarter of 2015, compared to 13.3% in Ireland and 10.1% in Sweden. Canadian real estate exceeds the typically popular markets for foreign buyers in the U.S. (5.4%) and U.K. (5.6%) due to low interest rates and the low Canadian dollar.


Increased Demand

Economist Adrienne Warren attributes this to currency exchange considerations, particularly impacting Canadian luxury real estate.


“Foreign exchange considerations are taking on a bigger role, increasing the attractiveness of properties in countries whose currencies have weakened at the expense of relatively stronger currency markets in the U.S. and the U.K.”


Warren believes this is due to a limited supply of single-family homes in Vancouver and Toronto. “People want to live closer to where jobs are and they don’t want to take on long commutes”.


Other Markets

Australia is undergoing the same affordability crisis that Vancouver is having, with the median house price over $1 million Australian dollars. Goldman Sachs estimates Sydney prices as overvalued by 20%, reminiscent of talk about a housing bubble in Vancouver and Toronto.


In Ireland, housing prices were soaring in 2007 when the financial crisis left the nation near bankruptcy, but it seems to have recovered in 2013 and has been growing since.

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Despite the shrink in Canada’s economy earlier this year, housing prices are expected to continue to rise. A Reuters survey of over 20 analysts predicted that Canadian home prices are expected to rise 5.2% this year, a higher forecast than 3.4% in June’s survey. This revision raised expectations for 2016 from 1.3 to 2.0% and for 2017 from 1.7 to 2.3%. Chief economist at HSBC, David Watt, along with the majority of analysts, predicts that home purchases will slow down due to these price increases, despite two rate reductions by the Bank of Canada this year.

Fear of Correction

The Canadian housing market remained resilient throughout the global financial crisis and US market crash. While home prices in the US are beginning to recover, Canada’s home prices seem to be unaffected. Some analysts warn of potential correction in the market, particularly in Toronto and Vancouver, once the US Federal Reserve begins to tighten policy, which will increase Canadian mortgage rates. The Bank of Canada estimates the housing market is about 30% overvalued, posing a significant risk to consumers overexposed to mortgage debt.



Although home prices are considered to have remained affordable on a national basis, the prices in Toronto and Vancouver have surpassed affordability limits of the average Canadian homebuyer, outside the condominium sector. The Bank of Canada’s rate cut in July brought its benchmark interest down to 0.50% to dull the impact of crashing oil prices, but this likely fueled further rise in house prices in urban markets. 

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Detached Houses for Under $1-million are Becoming Rare


In the first 6 months of 2015, 288 out of 2, 285 sales (12.6%) of detached houses were sold for under $1-million according to the Multiple Listing Service. In comparison, the first half of 2014 there were 543 out of 1,931 sales (28.1%) of detached houses for under $1-million.


Median Prices Compared to Last Year


The Real Estate Board of Greater Vancouver shows that the median price for detached homes in the east side has surged to $1.28-million last month—up 32.3% over July 2014. The median price for detached homes in the west side has jumped to $2.9-million—up 21.8% over last year. In Greater Vancouver, the median price for detached homes in the suburbs rose to $1.4-million—up 17.6% over last year.


HPI Benchmarks


Real estate board president Darcy McLeod attributes the sellers’ market to “strong consumer confidence, low interest rates and a reduced supply of homes for sale”. The board uses their Home Price Index (HPI) to represent the typical sale price for houses because it provides a better barometer than averages prices, which skew the picture because the most expensive properties are included. According the HPI, Vancouver’s east side reached $1.12-million—up 19.9% over last July, the west side hit $2.65-million—up 16.6%, and Great Vancouver’s detached homes reached a record high of $1.14-million last month—up 16.2% over last year.


Purchasers Must Consider a Range of Options


However, there are still lots of options in condos and townhouses or in the suburbs. In the east side there is still a range of condo and townhouse options under $1-million. There has been an increase in transaction for all types of properties. Greater Vancouver saw 3,978 sales last month—up 30% from last year. The Fraser Valley HPI rose to $621,100—up 9.3% over last year. Fraser Valley Board president Jorda Maisey states, “We have amongst the most affordable homes in the region”.

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Richmond—once a semi-rural municipality—has now become a city of over 200,000

with a global demographic unlike any other place in the world. More than 62% of

permanent residents are born outside the country, drawing documentary film crews

from Asia and Europe to uncover this unprecedented phenomenon. Geographers

call Richmond one of the most “hyper-diverse” cities on the planet, measured by

proportion of immigrants.

The 2.4 million population of Metro Vancouver has been growing by more than

30,000 each year, and 9/10 of those are immigrants. Demographers consider

Richmond an “ethnoburb” of Metro Vancouver. This is compared to 44% in

Vancouver proper, and other ethnoburbs like Burnaby (50%), Coquitlam (42%),

Surrey (41%), West Vancouver (41%), and North Vancouver (37%).

In the rest of Canada, Ontario cities come close to Richmond’s levels of foreign

residents—Toronto (46%), Markham (58%) and Richmond Hill (55%).

Compare this to other global cities with a reputation of being flooded with

foreigners, like London in the United Kingdom, which has a foreign demographic of

about 37%. Canada’s population has the second highest proportion of immigrants at

21%, after Australia’s 26%.

Based on ethnicity, Richmond’s demographics are 47% Chinese, 29% white, 8%

South Asian, 7% Filipino, 2% Japanese, and 7% other, according to the 2011 General

Household Survey.

Attractive features of Richmond

Richmond residents enjoy a more relaxed city feel than Vancouver and other cities

with less diversified demographics in Asia. Different ethnic groups coexist

harmoniously in the city’s parks, waterfronts, public schools and shopping malls.

Vancouver International Airport has become a hub within Richmond. Number 5

Road leading up to the airport is nicknamed the “Highway to Heaven” because it is

lined with enormous Christian churches, and colossal Sikh, Muslim, Hindu, and

Buddhist temples.

However, some tensions exist over language differences and skyrocketing housing

prices. Giant “McMansions” are popping up where previously smaller bungalows

took place. This is a result of the rapidly growing ethic population, and areas like the

intersection at Number 3 Road and Westminister highway form what is now called

the “Golden Triangle”. Urban geographer David Chenyuan Lai has counted more

than 50 bustling Asian-themed malls and outlets in this centre.

Richmond’s popularity among Chinese

Many factors have drawn Chinese immigrants to Richmond. Chinese-language

media have reported Richmond as having auspicious “feng-shui” energy. The

Vancouver International Airport is said to appear like a pearl in the mouth of a

dragon. Even the name “Rich-mond” has an attractive homonymic power associated

with financial success.

The airport location is convenient for the many wealthy immigrants who need to

travel regularly. As more Chinese flock to these areas, newcomers follow the

communities with similar ethno-cultural identities. Cultural geographers describe

the three diaspora communities of Chinese, south Asian and Filipino as having

reached a critical mass in Richmond.

Living in Richmond

Young residents of the ethnoburb are caught in a balancing act between protecting

their cultural identity and sharing with the mainstream culture. While the city’s

ethnic groups are expanding, some residents feel that there is very little helping

them to interconnect.

There are also concerns about the big, empty houses owned by people who spend

little time in Canada. They view Canadian real estate as a good investment due to the

low mortgage rates, but return to their homelands for work. This causes Richmond’s

sense of community to feel fractured. However, Richmond is still known as a

friendly city with some of the best restaurants in Metro Vancouver.

Immigrant Integration

Greg Halsey-Brandt, who represented Richmond as mayor, councillor or BC Liberal

cabinet minister for 23 years, thinks the demographic changes over the past three

decades have been fascinating, but “not particularly good”. “The volume of

immigration was too large over too short a time period. The host community of

Richmond and Metro Vancouver in many instances did not have time to adjust, nor

did many of the immigrants have time to adjust to us.”

Halsey-Brandt believes this influx has caused stress on the city’s cultural

relationships, jobs, traffic, education, health care and communication amongst

citizens. Nonetheless, integration is a two-way street and requires residents to

continue to work with immigrants to reshape library collection with more foreign-

language content, balance hospital staff, firehouses and police forces to reflect the

city’s ethnic makeup and engage as many residents as possible democratically.

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Seller’s Market


According to a new survey by the Bank of Montreal, British Columbians believe right now it’s a seller’s market. The survey of 2,000 Canadians showed that 45% of British Columbians think it is a good time to buy now, whereas 55% are willing to wait until next year. Of these respondents, 27% intend to buy a home within the next 2 years, compared to 22% last year.


Why Buy


Some buyers are driven by a fear of missing out on the low interest rates, which the Bank of Canada dropped to 0.75% in January, and potential increase in prices. 46% of British Columbians believe house prices will increase next year, compared to 39% of Canadians. Additionally, buyers have faith that their investment will continue to appreciate.


Record Demand


The Real Estate Board of Greater Vancouver statistics show that the buyer demand in May was the highest in 3 years. As homes are being snatched up, the prices have increased 11.5% for detached homes, 5% for townhomes, and 4% for apartments over last year. This May, the benchmark price in Greater Vancouver for a detached home was $966,500; for a townhouse was $469,100; and for an apartment was $377,500.

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Compounding Factors Continue to Drive Up Real Estate Prices


The question on everyone’s mind: When will the bubble pop?


The Bank of Canada warned on Wednesday about the risk of correction in Vancouver, Toronto and Calgary property markets. Yet, the Greater Vancouver Real Estate Board reported at the beginning of May that bidding wars are more frequent than ever. Property sales this March are the strongest seen in BC since 2007 according to the BC Real Estate Association. Property sales in the entire province jumped 37.6% over last year, and 53.2% in Greater Vancouver alone.


Contributing Causes


Low interest rates, a diminished Canadian dollar, attractively temperate BC weather, scarcity of vacancy, and fear of price hikes have driven buyers to flock into bidding wars. All types—first-time homeowners, growing families, and foreign purchasers—are buying.


There has been a 13.8% decline in listings compounded by an increased demand. On top of that, the sales dollar volume increased from last year by 57.1%, surpassing the overall rate of inflation. The average sale price for all types of homes this past March was $891,000 from $801,000 last year.


Left Out


These prices resultantly create a housing barrier affecting both low-income and middle class households. Those excluded from the local property market suspect that offshore buyers are hiking up real estate prices, making the property ladder inaccessible to the average homebuyer.

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Record Land Prices Driven by Potential Higher Density


Unprecedented Value

Land has become the dominant real estate sector in Metro Vancouver. This will likely dictate future property values and lease rates. Developers are driven by the potential of density increases, resulting in bids reaching unprecedented levels.


In November, CM Bay Properties paid $15.8 million for 15, 714 square foot old gas station site on the Cambie corridor, setting a new price-per-buildable-square-foot record at $402 according to Colliers International. CM Bay plans to develop a 12-storey condo and retail complex near the Oakridge-41st Canada line station.


Last year, the dollar volume in land exceeded $3 billion, constituting more money spent on commercial real estate in the Lower Mainland than office, buildings, shopping malls, industrial buildings, and multi-family rental property sales combined.


From 2013 to 2014, the dollar value in Greater Vancouver Area increased by 35.9% according to the Commercial Edge report. The average price per site was $4.7 million, but many were traded for much more.


Driving Factors

Other indications that developers are drawn by potential density growth is the increase in purchase of land for residential projects, representing half of all Lower Mainland land sales, up from a third in 2013. According to Colliers, developers are focusing on low-rise wood frame condominiums and townhouses.


City plans encouraging a shift towards multi-family development has spurred land speculation along Kingsway Avenue south of King Edward Avenue. This has resulted in a land price increase of an average $46 per square foot over the past year.


Avison Young principal Bal Atwal says that “underlying land values have outpaced income values on properties along or near virtually every major commercial corridor in Metro Vancouver where land is designated for higher density uses.”


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Vancouver home prices the highest in monthly gain for February


Home prices in Vancouver went up in February according to data from the Teranet-National Bank Composite House Price Index (HPI), which calculates price changes for repeated home sales. Only three out of the eleven large city markets surveyed increased month-to-month, with Vancouver at the highest across Canada (1.5%), followed by Victoria (0.5%), and Hamilton (0.3%). This resulted in a national monthly HPI increase of 0.1%.


The year-over-year figures placed Vancouver’s gain at third highest (5.7%) after Hamilton (8%) and Toronto (7.3%). The national yearly HPI increase was 4.4% in February, which is a decrease from 4.7% in January.


Decelerating Home Growth


Economic analyst at TD Economics, Admir Kolaj, stated that this is the fourth consecutive month of decelerating home price growth. He also pointed out that there is a growing regional divide between the oil producing and non-oil producing regions. The HPI decrease in Calgary (0.3%) and Edmonton (0.8%) was higher than that in Toronto (0.1%).


Kolaj predicts that home price growth will remain more favourable elsewhere in Canada due to the low Canadian dollar and lower-for-longer interest rates.

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Predicted Trend of Migration into B.C.


There may be a migration influx into Vancouver in 2015, especially due to the dip in oil prices in Alberta. In the past, there has been a net loss of residents from B.C. to Alberta and other parts of Canada, but the tides turned towards the end of 2014.


The drop in the Canadian dollar along with low interest rates will continue to attract overseas buyers. Newcomers to B.C. usually end up in Greater Vancouver or the Fraser Valley due to the affordability of the suburbs. However, the Business Council of B.C. expects that the housing market will continue to flourish in Metro Vancouver.


January Real Estate Activity


The Real Estate Board of Greater Vancouver reported there has been 8.7% increase in real estate transactions in January 2015 compared to 2014, and 14.9% increase above the 10-year average for January sales volume. In the suburb of Surrey, residential sales have increased by 10.5% over last January.


The real estate industry uses the home price index (HPI) to assess the market because it excludes the most expensive properties. The HPI benchmark in Greater Vancouver for detached homes hit a record $1.01 million this January. This is an 8.4% increase over the same month last year. New HPI records were made in January in both the west and east sides of Vancouver.


The suburbs offer more affordable options. The January HPI increased 3.5% over last year in the Fraser Valley for detached homes, and 2.5% over last year in Coquitlam for condos.

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The federal government has launched a new pilot program that started this month in aiming for fewer but richer immigrants.   The Canadian government will give permanent resident status to 50 experienced millionaire investors with high net-worth in their aim to continue economic growth and prosperity.  Under this pilot program, each investor will be required to have a net worth of $10 million and make a non-guaranteed investment of $2 million over 15 years.  The said funds will be invested in innovative Canadian -based-start-ups with high growth potential.  Applicants should prove proficiency in English or French, with post secondary education, demonstrate the net worth of at least $10 million was obtained from lawful profit-making business.  Minister James Moore mentioned that the pilot program is part of Canada's efforts to attract experienced business leaders to Canada while leveraging their business expertise and personal investments.

The previous immigrant investor program required applicants a minimum of $1.6 million to loan Canada $800,000 5 years interest free. This program revealed that the net gain to Canada averaged to only $20,000 per applicant as it was invested in a low-yield stock bonds.  A total of 36,973 investor immigrants flocked in BC from 2005-2012 under this program and two-thirds of these applicants were mainland Chinese who said they planned to live in British Columbia.

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Homes worth over $1 million have been selling at an increased rate in a year-over-year report by Sotheby’s. Growth in Vancouver (25%) and Toronto (38%) is expected to continue into 2015, whereas growth in Calgary (16%) and Montreal (21%) is expected to be balanced. Sotheby’s is closely watching Calgary and how the severe drop in oil prices will impact its luxury homes market. Calgary may experience a slow down in purchases, as seen in the tail end of 2014, because buyers are being more cautious. Despite a recent CHMC report stating low foreign ownership numbers in Vancouver and Toronto, Sotheby’s said that half of homes worth $5 million or more are owned by foreign investors. This discrepancy is because foreign purchases are transacted through Canadian subcompanies, however Sotheby’s is unable to give hard numbers. CMHC data wouldn’t capture these corporate transactions, whereas Sotheby’s familiarity in the luxury homes market places it in a better position to gauge the level of foreign ownership. Some critic mentioned concern about the stability of this market, in case these foreign owners suddenly selloff their high-value properties, causing a crash in Canada’s real estate market. However, Sotheby’s says that historically low mortgage rates and high levels of immigration continue to make Canadian real estate attractive overseas.

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Canadian housing market crash not in the cards 

Contradictory to what the central bank said that the Canadian housing market could be overvalued by as much as 10 to 30 percent, Governor Stephen Poloz said on Thursday that the Bank of Canada does not foresee any sharp rise of unemployment and mortgage rates that might trigger a major housing market correction.  Speaking in New York, Mr Poloz said that the probability of such a big drop in prices is low.  

" The risk comes when some catalyst sets off the vulnerability", he said.  " In this case it would be, let's say, a rise in unemployment, a significant rapid rise in mortgage rates, neither of which we're expecting"

He also told an Economic Club of New York business audience that he doesnt think of the Canadian housing in "Bubble" or in any "Bubbly-type" way.  He also said that a return to sustainable economic growth which Canada is estimated about two years away, would require continued financial innovation.  He pointed a need for expansion and innovation in terms of bond financing; securitization to create new high-quality, low-risk products; peer to peer lending; and public-private partnerships.

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