The Okanagan has been experiencing higher relative humidity over the last few months. This is an excellent resource for figuring out any moisture problems occurring in your home:
https://catalog.extension.oregonstate.edu/sites/catalog/files/project/pdf/ec1437.pdf
Only those owning property classed as residential and located in a designated taxable region in B.C. must complete a declaration for the speculation and vacancy tax.
Following are the designated taxable regions, including maps for each region. The maps are for your convenience only. Refer to the legislation for details.
Reserve lands, treaty lands and lands of self-governing Indigenous Nations are not part of the taxable regions.
Islands that are accessible only by air or water are not part of the taxable regions, except for Vancouver Island.
Some residential properties are excluded from the speculation and vacancy tax even though they are located within a taxable region. These include residential properties owned by:
- An Indigenous Nation
- Municipalities, regional districts, governments and other public bodies
- Registered charities
- Housing co-ops
- Certain not-for-profit organizations
You can also refer to the legislation for a list of exclusions.
If your residential property is excluded for one of these reasons, you only need to complete a declaration if you have received a declaration letter.
The speculation and vacancy tax has received Royal assent in the Legislature. This information is not a replacement for the law.
For 2018, the tax rate is:
- 0.5% of the property’s assessed value for all properties subject to the tax
For 2019 and subsequent years, the tax rate is:
- 2% for foreign owners and satellite families
- 0.5% for Canadian citizens or permanent residents of Canada who are not members of a satellite family
The speculation and vacancy tax applies based on ownership as of December 31 each year.
A speculation and vacancy tax year is the same as a calendar year. Tax levied on December 31 is due the following July. For example, for a property owned as of December 31, 2018, the 2018 tax rate of 0.5% applies and the tax is due on July 2, 2019.
The speculation and vacancy tax has received Royal assent in the Legislature. This information is not a replacement for the law.
BC Home Sales Show Little Change in April
Vancouver, BC ? May 14, 2018. The British Columbia Real Estate Association (BCREA) reports that a total of 8,203 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in April, a 16.8 per cent decrease from the same month last year. The average MLS® residential price in BC was $730,507, up 0.2 per cent from the previous year. Total sales dollar volume was $5.99 billion, a 16.7 per cent decline from April 2017.
?BC home sales were essentially unchanged in April compared to March, albeit up nearly 1 per cent on a seasonally adjusted basis,” said Cameron Muir, BCREA’s Chief Economist. ?The impact of more burdensome mortgage qualifications for conventional borrowers is expected to soften over the next several months as potential buyers adjust both their finances and expectations.?
The supply of homes for sale in April increased 4 per cent from the previous month. However, total active listings on the market continue to remain low from a historical perspective. Most regions of the province have begun trending toward more balance between supply and demand, causing less upward pressure on home prices.
Year-to-date, BC residential sales dollar volume was down 6.7 per cent to $19.9 billion, compared with the same period in 2017. Residential unit sales decreased 11.8 per cent to 27,135 units, while the average MLS® residential price was up 5.7 per cent to $731,661.
The Real Estate Board of Greater Vancouver says market conditions in the city are changing as sales in April fell to a 17-year low for the month.
The board says 2,579 detached properties, townhouses and condominiums sold last month in Metro Vancouver, down 27.4 per cent from April 2017 and 22.5 per cent below the 10-year average for the month.
About 18.6 per cent more properties were newly listed last month than in April last year, giving buyers more selection.
Still, prices moved up with the composite benchmark price for all properties at $1,092,000 — up 14.3 per cent from the same month last year and 0.7 per cent from March 2018.
Detached houses saw the smallest price gains, with the benchmark price at $1,605,800 — up 5.1 per cent from April 2017 and down 0.2 per cent from March 2018.
The benchmark price for an apartment rose 23.7 per cent from the same time last year to $701,000, while the townhouse benchmark rose 17.7 per cent to $854,200.
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OSFI (The Office of the Superintendent of Financial Institutions) has implemented 3 new mortgage rule changes. January 1, 2018
Qualifying rate stress test to all uninsured mortgages
Uninsured mortgage consumers must now qualify using a new minimum qualifying rate. The rate will be the greater of the five-year benchmark rate published by the Bank of Canada OR the lender contractual mortgage rate +2.0%.
How does this affect the mortgage consumer with a down payment/equityof 20% or more?
The biggest impact will be on the amount for which the home buyer/owner will be able to qualify. Previously, the home buyer/owner qualified at the contract rate offered by the lender. While the actual mortgage payment will still be paid at the contract rate, a higher calculation will be used for qualification purposes.
For example:
Do I still have the option to refinance my home?
Yes, home owners will still have the ability to refinance up to 80% of the value of their property. You will have to pass the same stress test which is the higher of the BoC five-year benchmark rate (currently 4.89%) OR the contract rate from the lender plus 2%.
Lenders will be required to enhance their loan-to-value (LTV) measurement and limits to ensure risk responsiveness
Mortgage lenders (excluding credit unions and private lenders) must establish and adhere to appropriate LTV ratio limits that are reflective of risk and updated as housing markets and the economic environment evolve. We are awaiting more details on this policy from lenders. As we have new information, we will update this document.
What does this mean?
OSFI directs lenders (excluding credit unions and private lenders) to have internal risk management protocols in higher priced markets (sometimes called “hot real estate markets” like Toronto and Vancouver). This is a continuation of a policy already in place. Many mortgage lenders have been following the principles of the policy for the last 10 to 12 months.
Restrictions will be placed on certain lending arrangements that are designed, or appear designed to avoid LTV limits
Mortgage lenders (excluding credit unions and private lenders) are prohibited from arranging with another lender: a mortgage, or a combination of a mortgage and other lending products, in any form that circumvents the institution’s maximum LTV ratio or other limits in its residential mortgage underwriting policy, or any requirements established by law. This is often referred to as “bundling” or “bundle partnership”.
What does this mean?
For example: a consumer applies for a mortgage with an 80% LTV and the lender can only approve 65%. The lender then partners with a second lender for the additional 15%. The original lender then “bundles” the 15% LTV mortgage with the original 65% mortgage to form the complete 80% LTV loan. This is no longer permitted as per OSFI.
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Market Intelligence BCREA Economics April 4, 2018
Careful What You Wish For – The Economic Fallout of Housing Price Shocks
Nearly 70 per cent of British Columbian households own their home. A relatively minor 10 per cent negative shock to home prices would extinguish $90 billion of their wealth, or $70,000 of the average homeowner’s equity. While some may see this as a paper loss, it will have a significant impact on the economy, as declining household wealth reins in consumer spending. Retail sales would suffer, with an estimated $1.8 billion in forgone revenue in the first year after the shock.
Home construction activity would fall dramatically. Home builders would cut back production 25 per cent; that’s 10,000 fewer housing starts in the first year alone. A negative price shock would markedly slow the expansion of the housing stock, creating even more critical housing supply problems down the road.
Across the economy, a negative home price shock will slow growth. Tens of thousands of jobs will be forfeited. The unemployment rate will shoot up. A 10 per cent negative price shock will slow real GDP growth to 1.5 per cent from a baseline of 2.7 per cent. That’s $3 billion in lost activity. If home prices fell 35 per cent, a level some activists are championing, the BC economy would collapse into recession. The average home owner would have lost $245,000 in equity, housing starts would fall by half, 64,000 jobs would be forfeited – sending the unemployment rate to 7.5 per cent with $4.4 billion in forgone retail sales and a colossal $8 billion loss to GDP in the first year.
This analysis does not account for the negative impact on provincial tax revenues, expanding deficits, ballooning debt and credit downgrade risks.
Think seriously about what you want when asking the government to intervene in a market system. You are playing with fire. Loss of GDP has an extremely long tail of destruction.
February 7, 2018
The value of building permits grew 27.3% (seasonally adjusted) in December from the previous month. Increases in permits for residential (+50.6) and industrial (+12.8%) projects offset decreases for institutional (‑36.3%) and commercial (‑13.5%) buildings. The value of permits rose in Vancouver (+38.9%), where most of the province’s building activity occurs, while Abbotsford-Mission (+167.1%) and Victoria (+69.2%) both saw large increases as well. Kelowna (‑31.6%) saw a decrease in the value of permits issued.
Nationally, building permits increased by 4.8% in December. There was growth in Saskatchewan (+31.5%), British Columbia (+27.3%), and Quebec (+20.6%). Conversely, the value of permits contracted in Manitoba (‑25.4%), Alberta (‑10.5%), and Atlantic Canada (‑5.4%).
Regional Building Permits
Through December of 2017, the value of building permits issued in the province’s regions climbed 17.5% (unadjusted) above the level recorded in the same period last year. Investment intentions were up in most regions ranging from 7.3% in Kootenay to 156.0% in Nechako. Planned spending rose in Mainland/Southwest (+16.8%), where increases were seen for institutional and governmental (+64.9%), industrial (+60.2%), commercial (+17.2%), and residential (+12.2%) projects. Overall permits continued to increase in North Coast (+79.6%), Thompson/Okanagan (+23.4%), and Vancouver Island/Coast (+22.3%), while the only regions to see declines were Northeast (‑30.3%) and Cariboo (‑9.8%).
Data Source: Statistics Canada (Regional data produced by BC Stats from unpublished data)
Housing starts in urban areas (areas with population of at least 10,000) in British Columbia fell by 26.1% (seasonally adjusted at annual rates) in February compared to January. The decrease was widespread with every housing type start registering declines in the month.
Across British Columbia’s census metropolitan areas, Victoria (+175.5%) was the only one in which housing starts grew in February. Kelowna saw the biggest decrease at 64.5% for the month.
Despite falling in half of the provinces, urban housing starts across Canada went up (+7.1%) in February. The increase was led by Prince Edward Island (+184.6%), Ontario (+25.8%) and Quebec (+17.2%). The increase was concentrated in apartment units (+22.8%) with all other housing types starts declining in the month. Saskatchewan (‑40.0%) registered the largest housing starts decline in February.