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by Steve Randall17 Apr 2019

The impact of the mortgage stress test continues to be shown in home sales in British Columbia.

British Columbia Real Estate Association says there were 5,707 sales through the MLS in March, down 23% year-over-year, while the average price was down 5.4% to $687,720.

“BC home sales continue to be adversely impacted by federal mortgage policy,” said BCREA Chief Economist Cameron Muir. “The erosion of affordability caused by the B20 stress test has created near recession level housing demand despite the province boasting the lowest unemployment rates in a decade.”

Total sales dollar volume was $3.9 billion, a 27.1% decline from the same month last year.

Listings increased 36.2% to 34,295 units from a year earlier and the ratio of sales to active residential listings declined from 29.4% to 16.6%.

“The sharp erosion of affordability caused by the B20 stress test is now creating pent-up demand, as many would-be home buyers are forced to wait on the sidelines,” added Muir. “Unfortunately, new home construction is slowing as well, which will likely lead to another housing supply crunch down the road.”

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by Steve Randall17 Apr 2019

The spring season is not expected to provide much relief for Canada’s challenged housing market.

RBC Economics sees a continuation of the weakened demand resulting from a cocktail of negatives for homebuyers including the mortgage stress test, interest rates, economic uncertainty, and affordability.

In a report this week, senior economist Robert Hogue says there was no break in March from the housing market slump.

Sure, there were some positives, a slight pick-up in Toronto for example with sales up 1.8%. But this barely dented the effects of a 9% drop in the previous month. And tight supply accelerated price growth after a pause.

Vancouver, Calgary, and Edmonton all saw a deepening of the slump and Vancouver sales were the weakest since the recession years.

Hogue says the impact of poor weather earlier in the year may have been limited and he says it’s likely to be a quiet spring season, especially as measures to help first-time buyers announced in the budget will not be active until later in the year.

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by Steve Randall17 Apr 2019

Students and other renters in Vancouver are able to live in luxury thanks to Vancouver’s tax on vacant homes.

Rather than pay the Empty Homes Tax, some owners of high-end homes are renting out their properties according to a report by Bloomberg, especially as sales have weakened.

With wealthy Chinese owners pulling back and home prices impacted by the mortgage stress test, a growing number of owners are turning to the rental market where the vacancy rate has been near-zero.

It’s easy to see why owners may be tempted to wait for a rebound before selling their luxury homes.

One real estate agent, Lisa Sun, told Bloomberg that things are tough. She is trying to sell a Vancouver mansion for a wealthy Chinese-Canadian owner but the listing price of $10.9 million isn’t attracting offers.

With some hopeful buyers offering as little as $6.2 million for the 8,343 square foot home with a wine cellar, home theatre, and pool, Sun is considering a reduction in the asking price to $8.3 million.

“I’ve been through only the peak, never the low,” she said, noting that she doesn’t expect a rebound for Chinese interest in the luxury market due to curbs on Chinese capital by Beijing.

A report from CBRE reveals that Asian investments in Vancouver homes fell to around $350 million in 2018, down from more than a billion in 2017 and 2016.

If Sun can’t sell, the home would attract Empty Homes Tax of $140,000 annually in extra tax.

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03/31/2019 15:14 EDT | Updated 3 hours ago


"Expect rental demand to grow rapidly in the years ahead."

File photo of a rental sign.
File photo of a rental sign.

Canada's housing crunch is like a game of whack-a-mole. Solve one problem, and another pops up somewhere else.

Runaway price growth for single-family homes is a thing of the past in Toronto and Vancouver today, thanks to rising interest rates and tougher mortgage rules. But with prices still high, buyers have turned to other options. Or really the one other option that exists: condos.

"Trouble is, this stronger demand for condos resulted in sharper price gains and affordability erosion," Royal Bank of Canada economists Craig Wright and Robert Hogue wrote in their latest affordability report, released on Thursday.

Watch: How much house can Canada's "peak millennials" afford? Story continues below.


Over the past year, RBC's affordability measure for condos worsened three times faster than it did for single-family homes. The gap between renting and owning a condo is the largest it's ever been.

To go from renting a two-bedroom apartment to owning an average condo in Toronto, you need to spend an additional $1,138 per month. In Vancouver, that premium is $1,553, while Montrealers need to spend an additional $904 per month.

RBC ECONOMICSOf 14 cities for which RBC crunched the numbers, in only two -- Saskatoon and Winnipeg -- is it cheaper to own a condo than to rent an apartment.

That gap grew very rapidly between 2015 and 2018, increasing by 140 per cent in Toronto, 119 per cent in Vancouver and 42 per cent in Montreal.

RBC ECONOMICSThe gap in costs between renting and owning has soared in many Canadians cities, but has decreased in Ottawa, Regina, Saskatoon, Winnipeg and St. John's.

"And it's not because rent is cheap or became less expensive over that interval," the RBC economists noted. "Rent increased by an average of 6.4 per cent in Vancouver, 4.4 per cent in Toronto and 7.6 per cent in Victoria in the past three years."

All of which means would-be homebuyers will likely be renters for much longer from here on in.

"Expect rental demand to grow rapidly in the years ahead," Wright and Hogue wrote.

Rental housing is not keeping up with demand. A recent study by GWL Realty Advisors estimated Toronto needs to be building 25,000 rental housing units per year to keep up with demand, but has been adding only around 14,000 rental units (condo rentals and purpose-built apartments) per year.

Vancouver needs about 12,000 rental units per year, but is seeing only about 3,400 completed per year.

It's not all bad news. Thanks to declining or flat single-family home prices, overall housing affordability improved slightly in the fourth quarter of 2018 in Toronto and Vancouver, the country's two priciest markets, RBC said.

But that "doesn't really change the big picture," the RBC report concludes — that affordability continues to be an acute problem.

Looking forward, the outlook is "somewhat" brighter, RBC said, as interest rates aren't likely to rise much further and may even fall.

"Our forecast for Canada calls for prices to remain unchanged. Current trends even point to likely declines in Vancouver and Alberta markets," Wright and Hogue wrote.

"And with the tight labour market poised to keep household income growing, the stars are aligning for more affordability relief in the period ahead."

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Number of concrete condos complete and unsold or available for presale quadruples in a year, finds quarterly report

Joannah Connolly Glacier Media Real Estate
March 7, 2019

Condo apartment building construction permits

For those looking to buy a new-build condo in Metro Vancouver, there’s good news – the number of available units has skyrocketed, according to a report released March 7.

In its quarterly State of the Market report for the Urban Development Institute, real estate research firm Urban Analytics said that the number of concrete condos that were either released for presale or completed and unsold, at the end of 2018’s fourth quarter, was quadruple that of one year prior.

There were 5,918 released and unsold new concrete condos in the region at the end of Q4 2018, which Urban Analytics said was a 134 per cent increase from the previous quarter and a 301 per cent increase compared with the same quarter in 2017.

All areas of Metro Vancouver saw a jump in inventory, but the increase was steepest in the ringed area defined as Inner Metro (which includes Burnaby, New Westminster, Richmond, West Vancouver, North Vancouver, South Delta, Tri-Cities and Squamish, but not Vancouver proper).

UDI SOM concrete condo inventory March 2019Source: Urban Development Institute's State of the Market Q4 2018 report, compiled by Urban Analytics

However, only 99 of those 5,918 condo units were complete and move-in ready (described as “standing inventory”) at the end of 2018. The report authors wrote, “When compared to the same quarter five years ago, this represents a 608-unit (86 per cent) decline in move-in ready concrete condominiums across Metro Vancouver.” This suggests that demand over the past five years has increased sufficiently to absorb presale units before they are completed, even if the absorption rate is now slowing.

The report added, “Richmond and South Delta accounted for 39 of those move-in ready units, and Burnaby and New Westminster accounted for 34 of them. Only 10 move-in ready [concrete condo] units were located in the City of Vancouver.”

UDI SOM concrete condo standing inventory March 2019Source: Urban Development Institute's State of the Market Q4 2018 report, compiled by Urban Analytics

The number of available new wood-framed condo units, which are studied separately in the report, did not climb as much as concrete condos, but they account for a much smaller share of the market.

Urban Analytics said that there were 1,013 released and unsold new wood frame condos at the end of Q4 2018. This is only a nine per cent increase from the previous quarter but a 164 per cent increase year-over-year. However, when compared with the many more units available five years ago, at the end of 2013, this is a 68 per cent decline.

UDI SOM wood condo inventory March 2019Source: Urban Development Institute's State of the Market Q4 2018 report, compiled by Urban Analytics
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City sets to take the operator to court in March

Daisy Xiong Richmond News
February 21, 2019

illegal hotel The illegal hotel at 7508 Railway Ave. is rated as “one of our best sellers in Richmond” by Booking.com.

It appears that a City of Richmond fine and warning hasn’t stopped a family “hotel” in west Richmond from opening its doors for business, illegally.

The Richmond News reported last August on a house at 7508 Railway Ave. that had been operating as a family hotel without a license. It later received a $2,000 fine from the city and was ordered to close.

However, the house, now named “Richmond 6 or 1 Bedroom House,” has been back on the travel website Booking.com, since January.

It appears to be very active — it is fully booked from now until Sunday, Feb. 24 and is rated as “one of our best sellers in Richmond” by the website.

“I accidentally found it on Booking.com...I’m here to tell you that it is more active and more professional now,” wrote a concerned resident to the News.

The house is offered as one house with five bedrooms and 10 beds, and accommodates a maximum of 17 guests per night.

The price ranges from $270 to $388 per night depending on the number of guests. Despite the house not being licensed by the city, it charges 25 per cent “taxes and charges” on top of the room rates.

“Why is the city unable to stop them?” asked the resident.

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Fourteen years after the City of Surrey released a land use plan for the area, land speculators and owners are still waiting for the payoff

Frank O'Brien Western Investor
February 20, 2019

anniedale-tyneheadThe Anniedale-Tynehead neighbourhood community plan covers about 408 hectares (1008 acres) of northeast Surrey. | City of Surrey

Fourteen years after the City of Surrey released a land use plan for 1,008 acres (408 hectares) in Port Kells south of the Trans-Canada Highway, and seven years since much of the land was designated for higher-density residential development, land speculators and owners are still waiting for the payoff.

Many of the approximately 350 owners are holding small acreages and are asking up to $2.1 million per acre in the Anniedale-Tynehead area of historic Port Kells, but sales have slowed.

Surrey’s planning department has received only one subdivision application. That was from Surrey developer BeechWestgard, which has acquired about 100 acres in the area in six parcels near 96 Avenue and Highway 15 (176 Street).

BeechWestgard has offered to front-end the cost of installing the infrastructure spine for sewer and water services to their sites, with the understanding that future developers would share in the cost. It is a bid to get development traction in what is seen as a prime residential destination in B.C.’s fastest-growing city.

Since July 2017, there have been five completed sales in Anniedale-Tynehead, covering 30 acres. All of this land is designated but not yet zoned for high-density residential under the city’s 2012 neighbourhood concept plan.

Most recent land sales in the area, however, have been “off-market” and have 12-to-18-month completions, according to a spokesman for Frontline Real Estate Services, which sold a one-acre site in the area last April for $1.8 million.

The long completions reflect the lack of servicing agreements to the site and the current slump in the Fraser Valley residential market, said Joe Varing, president of Varing Marketing Group with Homelife Glenayre Realty Co. Ltd. of Surrey, who has also been active in Port Kells.

Varing said that after a “frenzy” of activity in the past two years, the Surrey land market has slowed as residential sales plunged.

“We expect some proposed new condo developments will not go ahead,” noted Randy Heed, a land specialist with Colliers International’s Surrey office.

Varing said it might take years for any development to start in the Annieville-Tyndale zone because of approval delays at the municipal level.

This was underscored by a message from Surrey’s planning department. Ron Gill, north division manager of area planning and development for the City of Surrey, noted that council received BeechWestgard’s infrastructure application two months ago, on December 17.

“Council referred the application back to city staff for additional information regarding the potential impacts in the Anniedale-Tynehead area,” Gill said in an email response. “City staff is working on compiling the information requested by council, and will then present the application back to council for further consideration. The application requires rezoning, and as such, should council choose to proceed with the application, a public hearing would be scheduled so that council can hear comments from the public in advance of deciding on whether or not to support the application.”

Even if the city supported BeechWestgard’s application, “any subsequent redevelopment in the Anniedale-Tynehead area would require separate development application review processes, including rezoning, which would include public hearings, and be subject to city council approval on an application-by-application basis,” Gill wrote.

Heed isn’t holding his breath. He noted it took 10 years to reach the March 2018 approval of a a $1.6 billion light-rail transit (LRT) line in Surrey, a move that convinced many speculators to buy land along the proposed route. The new city council then cancelled the LRT shortly after the October 2018 municipal election and is now pushing instead for a $2.3 billion SkyTrain extension from Surrey to Langley, a process that could take another decade.

Heed is confident that Surrey Mayor Doug McCallum will eventually get the SkyTrain extension built, and he suggested political and planning decisions are simply part of the minefield land speculators face.

“That’s why it is called speculation,” he said. “Sometimes you win and sometimes you lose.”

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Detached homes in the $5 million-plus “luxury” range to see steep price drop this year, while $3 million-plus condo values will decline to a lesser degree, predicts brokerage

Joannah Connolly Glacier Media Real Estate
February 21, 2019


Metro Vancouver’s luxury detached homes will see a further median price decline of 7.1 per cent over the next year, according to a forecast issued February 21 by Royal LePage.

The national real estate brokerage’s 2019 Royal LePage Luxury Properties Report, which assesses high-end homes in five major cities across Canada, said that the sale price of the median “luxury” home in Metro Vancouver between February 1, 2018 and January 31, 2019 was $5,751,928, which is a decline of 1.7 per cent from the previous year.

The report predicted that this price would decline a further 7.1 per cent over the 12 months to January 31, 2020, to a median sale price of $5,341,936. That’s a loss of around $210,000.

Government measures to reduce overseas buyer demand and cool the housing market were seen as partly responsible for this decline. The report authors wrote, “Across Canada's five largest cities, Greater Vancouver was the only city to post a decline in median luxury home prices. The number of luxury houses trading hands declined over the past two years, a trend that initially began with the introduction of measures to cool the city's real estate market in 2016. Luxury home values have dipped but remain remarkably steady as many Vancouverites refuse to sell at what they perceive as a discount. Exasperating soft demand, Chinese nationals, an important luxury buyer demographic, have seen restrictions placed on their ability to transfer wealth to Canada.”

Brock Smeaton, sales representative, Royal LePage Sussex, said, “We have a growing number of buyers sitting on the sidelines watching prices, but they are also concerned about the unpredictability of government regulation and whether right now is the best time to buy.”

In Metro Vancouver’s luxury condo sector, Royal LePage predicted a median sale price decline of 3.7 per cent over the next year, from $2,680,064 to $2,580,115. This follows a 0.6 per cent price slide over the past year.

Royal LePage luxury home prices Feb 2019Source: 2019 Royal LePage Luxury Properties Report

“Luxury properties in Greater Vancouver are softening in price, but the lower-end luxury market is faring better than the upper end," added Smeaton. “For buyers considering the city’s most luxurious properties, it is a great time to buy in terms of price and selection.”

Despite the price declines – or perhaps because of them – Royal LePage is expecting a recovery in luxury-home market activity over the coming year. “Compared to last year, we are expecting an increase in luxury sales activity in Greater Vancouver,” said Kevin Somers, chief operating officer, Royal LePage Real Estate Services. “Price reductions and increased selection in Greater Vancouver are expected to stimulate the luxury property market.”

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Does this sound familiar? 1st residential & now commercial. I am sure the government will incorporate new rules to make it more challenging for the locals.


by Ephraim Vecina19 Feb 2019

Amid intensified construction activity, Vancouver’s industrial real estate market is steadily magnetizing foreign investors, a trend that might pose a major challenge for the domestic buyer segment.

Numbers from Colliers International indicated that nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of 2018. Almost half (45%) of this activity is in Surrey, Richmond, and Delta.

According to Avison Young, Burnaby and Coquitlam were the region’s stand-outs, with transactions involving industrial property in these locales being rapidly snapped up in a frenzy of “insatiable” demand.

“While Burnaby and Coquitlam remain highly sought after by owner-occupiers, tenants and investors, sales and leasing activity will likely slow in 2019 due to a lack of such opportunities in those markets,” Avison Young stated, as quoted by Business in Vancouver.

Read more: Canadian commercial investment to intensify this year

“With very limited new supply in the development pipeline and ongoing strong demand, vacancy in both markets – already at or near record lows – is expected to remain extraordinarily tight for the next 18 months,” the brokerage added.

This is also expected to feed into a virtuous cycle of rising rates and strong cash flow for owners, with net lease rates in Burnaby and Coquitlam hovering between $7.95 and $18 per square foot, Avison Young reported.

“We’re seeing offshore money, for the first time, coming into industrial because they understand and can see the quality of the investment,” Todd Yuen of the Beedie Development Group said. “The rents have finally caught up to the point where we can start to push the development cycle a little bit.”


Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

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If you can't trust a pastor, who can you trust? If it is too good to be true, it usually is. Contact me for a list of questions when you are choosing realtor. Don't be fooled by the flash & false promises. Have it in writing & ensure you understand the process.

HomeMarket Update

by Steve Randall20 Feb 2019

Three men including a pastor from Surrey have been given bans and financial penalties for a real estate investment fraud.

The British Columbia Securities Commission has imposed market bans and financial penalties on the men for a fraud committed against two individuals who believed they were investing in real estate in Edmonton.

They paid $450,000 in three transactions to pastor Alan Braun, his son Jerry Braun, Steven Maxwell (a.k.a. Steven Fassman), and the companies they controlled – Braun Developments (B.C.) Ltd., 8022275 Canada Inc. and 0985812 B.C. Ltd (dba TerraCorp Investment Ltd.)

The investors were told they would yield high returns for short-term investment but their money was instead used for other purposes including the personal living expenses of the fraudsters.

The panel noted that the misconduct of all three men "was exacerbated by what can only be described as the predatory nature" of their dealings with one of the two investors, whom the panel described as a "vulnerable" investor. The panel also noted that the Brauns "preyed upon a shared spirituality with the investor."

Penalties imposed
Maxwell and Alan Braun were ordered to pay $120,500 and $323,500, respectively, the amounts that they obtained from the fraud, and Jerry Braun and Braun Developments were deemed liable for approximately $157,000 of the $323,500 order made against Alan Braun.

The BCSC panel also imposed administrative penalties of $450,000 against Alan Braun, $300,000 against Maxwell and $200,000 against Jerry Braun for their misconduct.

Additionally the panel said that:

  • Alan Braun is permanently barred from acting as a company director or officer, working as a registrant or promoter, serving in a management or consultative capacity in the securities market, engaging in investor relations activities, relying on any of the Securities Act's exemptions, and trading in or buying securities or exchange contracts (other than transactions for his own account through a registered dealer);
  • Jerry Braun is barred from the same activities for at least 15 years (with certain exceptions), a prohibition that would continue until his penalties are paid; and
  • Maxwell is permanently barred from acting as a company director or officer, working as a registrant or promoter, serving in a management or consultative capacity in the securities market, engaging in investor relations activities, relying on any of the Securities Act's exemptions, and trading in or buying securities or exchange contracts.

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by Steve Randall15 Feb 2019

Most of Vancouver’s homeowners have filed their Empty Homes Tax declaration but 4,979 have yet to do so.

The City of Vancouver said this week that it’s allowing, for the second year, late declarations to be filed, although there will be a $250 bylaw ticket issued which will need to be paid or disputed before the declaration will be accepted.

Those property owners who chose not to make a declaration will have their property deemed vacant automatically and will be required to pay the tax at a rate of 1% of the property's 2018 assessed taxable value. The bylaw ticket will also need to be paid.

Those owners who are liable to pay the EHT must do so by April 12, 2019 to avoid an additional 5% surcharge. Those who haven’t paid by the end of the year will have the cost added to th

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Number of vacant properties decreased by 15 per cent between 2017 and 2018; 53 per cent back on rental market

Courier staff Vancouver Courier
February 6, 2019

empty homes taxVacant properties in Vancouver in 2018 based on the declarations to date is similar to last year, according to the City of Vancouver, with the largest concentration in the downtown area. Map courtesy City of Vancouver

The City of Vancouver is reporting that the number of Vancouver properties declared vacant in 2018 under the Empty Homes Tax fell by 15 per cent from 2017 and 53 per cent of those properties are back on the rental market.

The goal of the Empty Homes Tax, which was introduced in 2016, was to pressure homeowners to rent out homes they weren’t living in full time with the goal of improving the city’s low vacancy rate that sits at about .8 per cent. Any revenue collected by the city through the tax, which is implemented at a rate of one per cent of a property’s assessed taxable value, is being allocated to affordable housing initiatives.

Mayor Kennedy Stewart called the latest statistics on declarations “very encouraging,” in a press release the city issued Feb. 6.

“The main objective of Vancouver’s Empty Homes Tax is to influence property owners to put their empty properties on the rental market and the data shows that is happening,” he stated.

Homeowners had until Feb. 4 of this year to file their empty homes tax declarations for 2018. As of that date, 922 properties were declared vacant, compared to 1,085 declared vacant by last year’s extended deadline of March 5, 2018, translating to the 15 per cent drop.

Properties declared vacant or deemed vacant by the city if a declaration was not submitted by the deadline will be billed for one per cent of their property’s 2018 assessed taxable value. Payments are due by April 12.

During his election campaign, Stewart said he favoured tripling the Empty Homes Tax to three per cent.

In late January, he tabled a motion, which council approved, requesting city staff report back by the end of March 2019 with a plan to review and improve the fairness and effectiveness of the tax, including a possible increase to the tax rate.

Meanwhile, most property owners — 97 per cent — met this year's declaration deadline.

Beginning on Feb. 7, property owners will have the option to make a late declaration online, after they pay a $250 penalty. It’s the first time late declarations have been allowed and it's intended to help streamline the complaints process, according to the city.

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Visual representations of dollar values by which benchmark detached home and condo prices have fallen in a year

Joannah Connolly Glacier Media Real Estate
February 6, 2019

Zoocasa metro vancouver detached home prices drop cropSource: Zoocasa

Earlier this week, the Real Estate Board of Greater Vancouver issued its monthly stats report on home sales and prices, revealing that benchmark prices were sliding at an increasing rate.

Property website Zoocasa took this data one step further, and created two infographics – one for detached homes and one for condos – that show how much in dollar terms each area’s typical price has dropped over the past year.

It reveals that the vast majority of areas within the wider region saw significant benchmark price drops in the detached sector, with Vancouver West’s (West Side, Downtown West and West End) typical single-family home prices having lost more than half a million in value from a year ago.

Condo values, however, largely held their own around the region. Ten of the 21 areas examined (some of which fall within the Fraser Valley Real Estate Board) saw typical condo prices increase year over year, while 11 saw price declines. However, all the condo price changes, whether a rise or a fall, were relatively modest compared with the detached market.

Check out Zoocasa’s full infographics and price-drop rankings, below.

metro-vancouver-detached-house-price-change-zoocasaSource: Zoocasa

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by Steve Randall08 Feb 2019

Young Canadians are facing difficult financial decisions with the cost of living increasing and the cost of becoming a first-time homebuyers unaffordable for many.

That means that the high cost of a wedding – average $46,000 – may be the difference between homeownership as singles or married life as renters.

An analysis from RateSupermarket.ca found that an overwhelming 84% of respondents would rather spend their wedding fund on another major purchase with a home taking the joint top spot.

40% of respondents said they would rather spend their wedding fund on a down payment for a home; the same share would spend it on travel, 20% wished they’d invested it.

Janine White, Vice-President of Marketplaces and Strategy Development at RateSupermarket.ca says that spending thousands of dollars on an event doesn’t make the same sense to some Canadians today – at least for now.

“Shifts in real estate prices and rising interest rates are possibly pressuring more couples to get into the market sooner rather than later and deferring wedding plans,” she said. “Of course, financial goals will differ depending on the couple, but we are definitely starting to see a change in the environment, whereas in the past, a wedding was traditionally the key priority for most couples – then maybe followed by buying a home, starting a family, and retirement.”

The economics of buying a home vs. having a lavish wedding do look sensible.

For those that qualify for a mortgage with a 5% down payment, they could buy the average-priced Canadian home ($472,000) with $23,600 down.; less than half the average cost of a wedding according to the study.

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by Ephraim Vecina31 Jan 2019

Vancouver’s affordability saga continues unimpeded as the city’s single-family homes are now priced considerably above the median household income, according to a recent study by the National Bank.

The analysis uncovered that the average monthly mortgage payment for a median-price single-detached residence in the Vancouver CMA was around 101.5% of the region’s average household income.

National Bank stated that this was an unprecedented high, representing increases of 2.7% quarterly and 6.4% annually, Business in Vancouver reported.

Falling salary growth combined with recent increases in interest rates were cited by the study as the main contributors to the trend, despite the fact that the median price of Vancouver’s single-family homes during Q4 2018 went down by 0.7% quarter-over-quarter, and had only a modest 1.8% year-over-year uptick.

Condos experienced a similar cooling, with the mortgage for an average-priced unit in the Vancouver CMA accounting for 49.2% of household income during the fourth quarter, increasing by 1.3% from Q3 2018 and 6.3% year-over-year.

Read more: B.C.’s young professionals are packing up for greener pastures

A January report from Altus Group warned that there seems to be no relief in sight for would-be home buyers in Vancouver, as the market is “exhibiting the most potential for downside risk,” Altus stated.

Aside from pricing issues, growing construction and borrowing costs will likely stagger sales levels in 2019.

“A key challenge that has become more apparent as of late in Vancouver has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates,” Altus explained.


Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

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by Neil Sharma28 Jan 2019

If you’re torn between investing in either RRSPs or real estate, don’t be.

Calum Ross, a leverage wealth expert and VERICO broker with Mortgage Management Group—and author of The Real Estate Retirement Plan: An Investment and Lifestyle Solution for Canadians—says Canadians should invest in both. Ross will be discussing that and more at this year’s Investor Forum on March 2 at the International Centre in Mississauga.

“People have a tendency to think of either RRSPs or real estate investing for their retirement plan,” Ross told CREW. “The reality is that consumers need both.”

The reason is that, in addition to diminishing rates of return, a growing number of Canadians these days don’t have defined contribution plans, which still don’t even give guaranteed payouts. Consequently, they need higher amounts of forced savings.

“When you consider the vast majority of Canadians’ wealth  is tied up in their homes, the only solution to RRSP, TFSA, RESP, or investment savings catch-ups is essentially in the home equity of their property,” continued Ross. “When you consider the fact that life expectancies now are moving towards 90 years old, the probability that your registered savings account lasts a lot longer than your mortgage is very high. What we’ve been doing is engineering investment products to ensure that the rate of return exceeds the cost of borrowing.”

Ross defines retirement not as the point at which somebody stops working, but rather as the point at which they no longer need to work. If someone has enough money in their investment accounts, debts are easily repaid in full and a mortgage becomes an instrument that is acquired by design and not out of necessity.

Moreover, Ross notes that real estate investing doesn’t have the same tax deferral on capital gains that RRSPs have. He recommends using home equity appreciation as an RRSP catch-up.

Cash flow is still an important component of investing, and that means investors should seek blue-chip properties that they own directly. Of course, choosing the right property is an altogether different task.

“Picking a property depends on the current state of the economy, as well as its projected state,” said Ross. “It’s not just about the actual property today, it’s also about where the underlying economic fundamentals will be in five or 10 years, and the two biggest predictors of where a property will be are actual net migration of population inflow—because there will be housing demand—and areas with strong GDP growth.”

Toronto, for example, has strong population inflow, which is creating housing demand so strong that supply cannot maintain pace, but it’s also a geographical location wherein values have skyrocketed. Ross says that properties that cash flow positively will help meet the Canada Revenue Agency’s deductibility elements.

As for RRSPs, they offer diversified access to a number of different market options, but in tandem with real estate, investors are better shielded.

“If you put money in RRSPs and you take it out, you’re penalized, but in real estate the monthly payment has forced savings mechanisms,” he said.


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