Is The Vancouver Real Estate Market About To Get Destroyed?

With the government about to propose a misguided mandatory "cooling off period" for all residential sales, I discuss the BC government's plans and whether the BC real estate market is about to get destroyed.

This is your Vancouver real estate market update for March 2022 and we’re getting into it right after this.

Hey, everyone. I’m Craig Veroni with RE/MAX Masters Realty. I’m your local real estate agent here in Vancouver, BC. In today’s video, I’m going to cover what’s happened in the Vancouver real estate market through the month of February and what might be coming that could affect that market.

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So, let’s jump into it. The Real Estate Board of Greater Vancouver reports that residential home sales in the region saw an 8.1 percent decrease from the sales recorded in February 2021, and a 49.8 percent increase from the homes sold in January 2022. 

Last month’s sales were 26.9 percent above the 10-year February sales average. 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,313,400. This represents a 20.7 percent increase over February 2021 and a 4.6 percent increase compared to January 2022. 

As we prepare to enter what’s traditionally the busiest season of the year, the Metro Vancouver housing market is seeing more historically typical home sale activity and a modest uptick in home listing activity compared to last year. Despite having a higher volume of people listing their homes for sale in February, the region’s housing market remains significantly undersupplied, which has been pushing home prices to new highs month after month.

If you want to stay on top of the market, whether you’re buying or selling a home, knowledge is key and the Snap Stats market reports are a fantastic way to arm yourself with tons of knowledge on your market area.

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What’s Coming?

On Monday, February 28th the BCREA launched its white paper titled “ A Better Way Home: Strengthening Consumer Protection In Real Estate, at a press conference in downtown Vancouver, with all of BC's major news outlets in attendance, including Global, CBC, and CTV.

BCREA drafted the white paper in response to the BC government's plans to introduce a mandatory "cooling off" period, announced in November 2021, without consultation with the public or real estate sector, a problem statement or supporting rationale. CEO Darlene K. Hyde, speaking at the conference said, "A consultation in which the outcome is pre-determined is not a consultation at all." "As the provincial professional association for BC Realtors, we know that Realtors are uniquely positioned to support the government in identifying a 'better way home' for all British Columbians," said Hyde.

In April Van Ert’s article BCREA's white paper, developed with support from regional real estate boards, offers more than 30 recommendations spanning four areas: addressing housing supply issues, enhancing consumer protection in real estate transactions, evolving the real estate sector, and contributing to the creation of a world-leading regulatory structure. It incorporates findings from seven focus groups with consumers and Realtors, years of survey data, and a detailed analysis of economic and secondary literature, including the impacts of attempted housing market interventions worldwide. An analysis of economic and secondary literature and studies of such market interventions worldwide show "cooling-off periods" to be ineffectual at best.

Instead, BCREA proposes implementing a mandatory "pre-offer period" of a minimum of five business days from the date of listing during which time offers cannot be made on a property. This pre-offer period would give consumers time to do their research on a property before presenting an offer, meeting the government's stated goal of helping consumers make more informed decisions without introducing more uncertainty into real estate transactions.

This is exactly what I stated could be done in my November market update video.

The fundamental challenge of BC's housing market is the mismatch between supply and demand. That is what the government needs to address.

We need more coordinated action from stakeholders at all levels to help create an ample, diverse supply of housing options for residents in the region today and into the future.

There was also a recent interest rate hike of .25% One of several expected this year. To give you an idea of the impact this will have, if you have a variable rate mortgage at the moment, for every $100,000 borrowed your payment will only increase by $12. So, on a $500,000 mortgage that’s a $60 a month increase. If you’re a buyer, the variable rate is still a good bet because the spread between the variable rate and the fixed rate is still 1.25%. Check with your mortgage broker for more advice. If you don’t have a mortgage broker, I work with some of the best in Metro Vancouver so feel free to reach out to me for recommendations.

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