REBGV - First-time home buyers received welcome news in today’s provincial budget. 

The government has announced, effective February 19, 2014, under the Property Transfer Tax (PTT) First-Time Home Buyers’ Exemption program, qualifying first-time buyers can buy a home worth up to $475,000. The previous threshold was $425,000.

The partial exemption continues and will apply to homes valued between $475,000 and $500,000.

With this change, the government estimates 1,700 additional first-time buyers will annually be eligible to save up to $7,500 in PTT when they buy their home.

The government estimates this measure will cost $8 million in lost tax revenue each year.

The Real Estate Board, together with BC Real Estate Association, has actively lobbied to make home ownership more affordable for first-time home buyers. This increase in the threshold clearly signals our efforts have paid off as in past years.

In 2008, as a result of industry lobbying, the provincial government increased the threshold to $425,000 from $375,000. 

In 2005, the government increased the threshold to $325,000 from $275,000.

The PTT is calculated at a rate of one per cent on the first $200,000 and two per cent on the remaining value of the purchase price.

On February 12, the Canadian government closed a popular program which started in 1986, to lure Chinese investors to bring their millions into Canada.  What was labeled as the Immigrant Investors Program (IIP) offered visas to business people with a net worth of minimum 1.6 million (cdn) who were willing to lend $800,000 (interest free!) to the Canadian government for investment across Canada for a term of five years.

Provincially, this program directly gave the BC government access to over $400 million in funding used to help replace schools and expand hospitals.  This fund was also used to invest in local BC based businesses involved in the high-tech sector.*

Approximately 56,000 applicants, representing 7 years of VISAS,  were cancelled and the program suspended indefinitely.  In the same announcement, the Canadian government offered two new programs for applicants to apply under a new Immigrant Investor Venture Capital Fund or a business skill option - both to be launched later this year**

It is unknown if the government was directly trying to impact the housing market or if the announcement will have any impact at all.  The government exerts that despite the millions of dollars in interest free loans, the immigrants under this program held very little ties to the country and were not major contributors to the economy - via taxes.  In a press conference in Toronto, Citizenship and Immigration Minister Chris Alexander stated, "Citizenship is not a right, it is a privilege."  A position that has been maintained in Ottawa, contributing to their decision early last week.***

The local housing market has been steady for the past 12 months.  Both activity and price points have been consistent.  Luxury detached home sales, sold at or above $2.5 million, represents 28% of sales in Vancouver in 2014.  Luxury condominium/townhouse sales represents less than 1% of sale in Vancouver in 2014.  Luxury homes for all properties in Vancouver represents 10% of the local housing market.  What kind of impact do YOU think this announcement will have for Vancouver real estate.

Read more (credit):
*Vancouver Sun
**CBC News
***Chinatimes
****statistics derived from MLS Sales 2014, YTD

VANCOUVER, BC - The first month of 2014 saw home sale and listing totals outpace historical averages in the Greater Vancouver housing market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 1,760 on the Multiple Listing Service® (MLS®) in January 2014. This represents a 30.3 per cent increase compared to the 1,351 sales recorded in January 2013, and a 9.9 per cent decline compared to the 1,953 sales in December 2013.

Last month’s sales were 7.2 per cent above the 10-year sales average for the month.

“The Greater Vancouver housing market has been in a balanced market for nearly a year. This has meant steady home sale and listing activity accompanied by stable home prices,” Sandra Wyant, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,345 in January. This represents a 4.2 per cent increase compared to the 5,128 new listings reported in January 2013.

Last month’s new listing count was 17.7 per cent higher than the region’s 10-year new listing average for the month.

The total number of properties currently listed for sale on the Greater Vancouver MLS® is 12,602, a 4.9 per cent decline compared to January 2013 and a nine per cent increase compared to December 2013.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $606,800. This represents a 3.2 per cent increase compared to January 2013.

With the sales-to-active-listings ratio at 14 per cent, the region remains in balanced market territory.

“If you’re looking to sell your home in a balanced market, it’s critical that your list price is reflective of current market conditions,” Wyant said.

Sales of detached properties in January 2014 reached 728, an increase of 34.3 per cent from the 542 detached sales recorded in January 2013, and a 10.5 per cent increase from the 659 units sold in January 2012. The benchmark price for a detached property in Greater Vancouver increased 3.2 per cent from January 2013 to $929,700.

Sales of apartment properties reached 753 in January 2014, an increase of 30.7 per cent compared to the 576 sales in January 2013, and an increase of 14.6 per cent compared to the 657 sales in January 2012. The benchmark price of an apartment property increased 3.7 per cent from January 2013 to $371,500.

Attached property sales in January 2014 totalled 279, an increase of 19.7 per cent compared to the 233 sales in January 2013, and a 6.9 per cent increase from the 261 attached properties sold in January 2012. The benchmark price of an attached unit increased 1.7 per cent between January 2013 and 2014 to $457,700.