Vancouver's High End Real Estate is Red Hot with Multiple Offers

Chinese Investors continue to write way Over Asking in Multiple Offer Scenarios

Chinese Buyers continue to bid up price wars in Vancouver, primarily on high end residential detached homes. In the past 2 days, 47 sales over $1 million were recorded, 16 of which sold for over asking, some as much as $550,000, or 33% over asking price, often $500-$600,000 over tax/assessed values.

The hottest region is Vancouver West but savvy Buyers are coming over to the Northshore quickly, where comparable product is selling for half the price.

If you are in the market for a house in this price range or market, be prepared with a great Realtor who is on top of the market and willing to go the extra mile for ie door knocking or mailouts, and get your financing approved and bring an inspector to first showings as cash offers are now the norm. If you can, you may want to wait until this cools off, or look at a slower market such as West Vancouver or North Vancouver before they heat up.

The Apartment market in Vancouver and The Northshore is very strong with good product selling within a week as the supply is very low. We are not seeing the multiple offers as much, but in a busy market like this is critical to stay on top of daily new listings.

As a Seller, make sure your Realtor is on top of this surge, because if you price on last years comps, you could sell for $500,000 less than todays market is willing to pay.

If you have any questions about Vancouver Real Estate please write or call me and it would be my pleasure to help.

604.562.0532
stu@stubell.com

January 2011 Greater Vancouver Real Estate Stats

Vancouver Real Estate January Stats

Stability and regional ‘hot spots’ characterize January housing market

The Greater Vancouver housing market remained in balanced market conditions in January, although higher levels of buyer demand were seen in some of the region’s largest communities.

The number of properties listed for sale and those sold on the Multiple Listing Service® (MLS®) last month outpaced the 10-year average in both categories for January.

“There was a healthy balance between the number of home buyers and sellers in our market in January, but there’s always variation in activity from region to region,” said Jake Moldowan, president of the Real Estate Board of Greater Vancouver (REBGV). "We’re seeing strong sellers’ market conditions in areas like Richmond and the west side of Vancouver.”

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price of detached homes increased 22.6 per cent in Richmond and 12.2 per cent in Vancouver West. In comparison, detached home prices across the region increased 2.7 per cent over the same period.

“When you’re looking to buy or sell a home, it’s important to familiarize yourself with the wider trends in the market. It’s equally important to seek out knowledge of your local area so you understand current market conditions in your neighbourhood,” Moldowan said

Looking across the region, the REBGV reports that residential property sales in Greater Vancouver reached 1,819 on the MLS® in January 2011. This represents a 4.2 per cent decline compared to the 1,899 sales recorded in December 2010, a decrease of 5.4 per cent compared to the 1,923 sales in January 2010 and a 138.7 per cent increase from the 762 home sales in January 2009.

From a historical perspective, January’s 1,819 homes sales slightly surpassed the 1,790 home sale average recorded in the region over the last ten years.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,801 in January 2011. This represents a 6.7 per cent decrease compared to January 2010 when 5,147 properties were listed, and a 182 per cent increase compared to December 2010 when 1,699 homes were added to the MLS® in Greater Vancouver.

At 10,438, the total number of residential property listings on the MLS® increased 5.8 per cent in January compared to last month and increased 2.2 per cent from this time last year.

Sales of detached properties on the MLS® in January 2011 reached 793, an increase of 12.5 per cent from the 705 detached sales recorded in January 2010, and a 171.6 per cent increase from the 292 units sold in January 2009. The benchmark price for detached properties increased 2.7 per cent from January 2010 to $810,045.

Sales of apartment properties reached 713 in January 2011, a decline of 20.8 per cent compared to the 891 sales in January 2010, and an increase of 97.5 per cent compared to the 361 sales in January 2009.The benchmark price of an apartment property increased 1.4 per cent from January 2010 to $390,935.

Attached property sales in January 2011 totalled 313, a decline of 4.3 per cent compared to the 327 sales in January 2010, and a 187.2 per cent increase from the 109 attached properties sold in January 2009. The benchmark price of an attached unit increased 2.6 per cent between January 2010 and 2011 to $495,140.


If you have any questions about buying or selling Real Estate in Vancouver contact Stu Bell anytime.

HST REBATE BREAKDOWN in BC

HARMONIZED SALES TAX & HOW IT APPLIES TO RESIDENTIAL REAL ESTATE by Stu Bell

Goods and Services Tax (“G.S.T.”) for a single sales tax rate of 12%.On July 23, 2009, British Columbia announced it implemented Harmonized Sales Tax (“H.S.T.”) for B.C. effective July 1, 2010. The H.S.T. is a combination of the 7% Provincial Sales Tax (“P.S.T.”) with the 5% federal.

For consumers, goods and services (with some exceptions) is subject to the H.S.T. in the same manner as they are currently subject to GST. This applies to real estate as well.

For both used and new homes, there are some extra costs for buyers or sellers but these are for the services required to buy or sell, not on the price of the home.

Buyers of used residential real estate can expect to pay H.S.T. on items such as home inspectors, appraisals and other such services. Lawyer fees will not change as they have been forced to charge P.S.T. for years.

Sellers of used residential real estate can expect to pay H.S.T. on realtor commissions, and any other services they may use.

H.S.T. has different implications for used residential real estate and new residential real estate. There are also different rules for commercial properties, mobile homes and other types of real estate. Below is an explanation ofeach situation.

USED RESIDENTIAL REAL ESTATE

There is no H.S.T. on the price of used residential real estate, much like the current rules regarding G.S.T. There are

no extra closing costs on the purchase or sale of a used residential house, subject to the comments above.

NEW HOUSING

H.S.T. will be payable on the sale of new or substantially renovated homes, where the Contract of Purchase and

Sale was entered into after November 18, 2009 and both ownership and possession of the home is transferred after

June, 2010. H.S.T. will not be payable on sales of newly constructed or substantially renovated homes where

ownership or possession of the home is transferred before July 2010, or where the Contract of Purchase and Sale is

dated prior to November 18, 2009.

New Housing Rebate

The Provincial Government is proposing a New Housing Rebate (“the Rebate”) to ensure that purchasers of homes

priced up to $525,000 would pay no more tax, on average, than under the current P.S.T.

The Rebate is 71.43% of the provincial component of the H.S.T. paid, up to a maximum of $26,250.00.

To illustrate this, let’s assume a purchaser is purchasing a new home for $500,000.00.

The old GST tax would be $25,000, now with the 12% HST and the appropriate HST rebate the total tax is $35,000.


Note that in the above example the purchaser is paying about $10,000 more with the H.S.T.

Note also that the maximum rebate is $26,250.00 and all purchase prices will get the $26,500 HST rebate back. However, the extra tax will increase dramatically for homes over $525,000.00. Consider the following example for a home priced at $900,000.00. Total taxes with HST = $81,750 vs $45,000 before with GST.

2% more than under the current G.S.T.

The government states that while sales of new homes in B.C. are not directly subject to the P.S.T., building materials used in the construction of homes are subject to the 7% P.S.T. The total amount of P.S.T., on average, embedded in the selling price of a new home is estimated to be equal to two percent. As a result, the government claims that purchasers of homes priced up to $525,000 would pay no more tax, on average, than under the current P.S.T. This of course assumes that the price of homes drop 2% due to the elimination of P.S.T. on building supplies.

The new housing rebates would be federally administered in a manner similar to the G.S.T. rebates for new housing.Using the above example, the purchaser of a new home priced at $900,000 will pay an additional $36,750.00 with H.S.T.

Individuals would be able to file an application for the rebate directly with the Canada Revenue Agency. However, in the case of homes sold by the builder, similar to the G.S.T. new housing rebates, the builder would have the option of paying or crediting the new housing rebate to the purchaser at the time of purchase.

More clarification for you on the HST rebate. There is also a federal rebate for GST but it is only available to a maximum of 450k.

• Resale homes are exempt from the 5% GST.
• New homes are subject to the 5% GST. New home buyers can apply for a rebate of the 5% GST applicable to the purchase price to a maximum of $8,750 for homes costing less than $350,000 before GST.
• For new homes priced between $350,000 and $450,000 before GST, the GST rebate would be reduced proportionately.
• New homes priced at $450,000 or higher (before GST) would not receive a rebate.

To calculate the total taxes on a purchase you are considering open this link:


http://www.rodfriesen.com/hst-rebate-calculator.html?fmv=265000&newhome=Yes&firstbuyer=No


If you have any questions about Vancouver Real Estate please feel free to contact me anytime at 604.562.0532 or write stu@stubell.com.