Thursday, September 24, 2009

Vancouver Real Estate Forecast 2010 - Prediction about Greater Vancouver House Prices, Home Pricing w/ 12% HST, Interest Rates, Olympics, Fundamentals

Vancouver Real Estate Forecast 2010 – A Prediction About House Prices, Home Values and Housing Sales Volume

What's in store for Vancouver Real Estate in 2010? Here's a forecast on Vancouver home prices and prediction on Vancouver property values.Being an enthusiast about this subject for over a decade, there are some thoughts about a 2010 Vancouver real estate forecast. With sales volume and prices increasing through 2009, many homebuyers are wondering if average selling prices and property values will continue to increase in the latter stages of 2009 into and through 2010. Here is a prediction about the 2010 Vancouver real estate resale market as well as presale condo developments in the area.

7 Major Factors Will Affect 2010 Vancouver Housing Prices

There are many factors that affect Vancouver housing prices, but in late 2009 and into 2010, there are several very unique circumstances that will influence sales volume of all housing types in addition to property values and sales prices throughout the region. It is often hard to predict 2010 Vancouver housing prices simply because a lot can change. Some important factors the affect 2010 Vancouver housing prices now may end up not influencing the resale or presale markets, while other new factors may creep up to affect homebuyers. Here are the seven factors that will likely affect the 2010 Vancouver Housing Prices in no particular order:

1. mortgage rates (financing)
2. BC Harmonized Sales Tax (12% HST on new property)
3. supply and demand in 2010 Vancouver presale real estate market
4. supply and demand in 2010 Vancouver resale real estate market
5. consumer confidence and emotions
6. Vancouver population growth and projections
7. Vancouver economic fundamentals in 2010 and beyond

A Quick Summary of Our 2010 Vancouver Real Estate Forecast Based on These Factors

A 2010 Vancouver real estate forecast based on the above factors will determine where the property market will likely head in the future. As part of our prediction for the 2010 Vancouver real estate forecast, we have put together a quick summary explaining each of the 7 factors and if they will positively of negatively influence the Vancouver real estate forecast 2010. Firstly, mortgage rates have been at all time lows for over a year. The Bank of Canada lending rate has been at 0.25% and they have promised to keep it there until at least the third quarter of 2010 barring upward pressure from inflation. Therefore, after June 2010, it is likely that the BoC lending rate will increase, thereafter the banks will also increase their prime rates, increasing the mortgage variable rates across the board. The fixed rates, which are based on the US bond market, will also likely see a spike too. As inflation starts to creep in, more investors will head towards buying US bonds, and therefore, demand will increase, increasing the borrowing fixed mortgage rates in Canada. With both fixed and variable rates in Vancouver increasing in the future, this will have a negative impact on the 2010 Vancouver real estate forecast, as cashflow and affordability will again become a bigger issue. A big effect on the 2010 Vancouver new real estate market including presales condos and pre-construction homes will be the BC Harmonized Sales Tax. A new 12% BC HST will be applied to any new construction property, which will have a huge influence on the presale 2010 Vancouver real estate forecast. With less demand for presales and pre-constuction Vancouver real estate, developers and builders of new property will feel the hit come 2010 and into 2011, as less Vancouver homebuyers and condo purchasers will pay the extra 12% hit on a new home. Demand for presale Vancouver real estate in 2010 will go down, putting upwards pressure on resales property. What this means is that many homebuyers will opt for resale listings. With more demand, the resale 2010 Vancouver real estate forecast is brighter, and will likely see a bigger price increase as demand grows for these non HST taxable homes. As the global economic crisis is becoming better managed and the end is in sight, consumer confidence in the 2010 Vancouver real estate forecast and predictions is gaining. As many Vancouver homebuyers purchase homes based on emotion, this boost in confidence will also boost the local Vancouver real estate forecast in 2010. As fall and winter 2008 was a brutal year for not only Vancouver real estate sales volume but also housing prices, 2009 will see a huge increase in both areas. As numbers are published in late 2009 and early 2010, we will likely see the above 100% increase sales volume and increase of 1 – 3% per month in Vancouver housing prices until next summer. This will have a positive impact on consumer confidence in the 2010 Vancouver real estate forecast and predictions. In addition, the Greater Vancouver population continues to grow at one of the fastest rates in Canada. This will continue and put pressure on the Vancouver property market as inventory has stalled during the past 2 years due to the global economic crisis. With many new condo projects delayed or cancelled, this has pushed back a lot of housing inventory, thereby reducing the Vancouver real estate inventory during this hot market time. Lastly, the Vancouver economic fundamentals remain strong. With new transportation routes completed, better accessibility and an influx in business and retail, the Vancouver real estate forecast 2010 is likely headed upwards. Notice that we didn’t even mention the 2010 Olympics, which we believe is a non-factor in the 2010 Vancouver real estate forecast.

Conclusion about 2010 Vancouver Home Prices

So a quick conclusion on where the Vancouver home prices are headed in late 2009 into 2010: sales volumes and home prices will see huge jumps compared to last year as 2008 was a bad year. Mortgage rates are likely headed upwards and even spiking by mid-2010. The addition of the 12% BC HST on new homes will adversely affect the presales and new Vancouver home market, causing presales 2010 Vancouver home prices to dip as demand drops. With less homebuyers in the market to purchase new homes, the resales 2010 Vancouver home prices will likely go up a lot, as more homebuyers look for completed homes. The worst of the economic crisis in Canada is over, and with job creation looming and stricter lending practises from the bank, consumer confidence in the Vancouver real estate market place will go up. Based on emotions felt from the headline news proclaiming a global recovery and above 100% gaines in sales volumes and staggering increase in housing prices, the 2010 Vancouver home prices will likely be buffered by homebuyers purchasing based on emotion. With the economic fundamentals stronger than ever and with population growth and migration into the city increasing, 2010 Vancouver home prices will go up as demand will grow. With new housing inventory stalled and increased demand, the re-balancing of the Vancouver real estate market (especially resales homes) will likely tip in the favour of homeowners by mid to late 2010.

The Other Intagibles Affecting The Vancouver House Prices 2010

There are a few other intangible factors that may or may not affect the 2010 Vancouver House Prices beginning with the 2010 Vancouver Whistler Winter Olympics. The hot market in 2009 started back in April and has continued through into October, but none of the price increases or staggering jump in sales volume had to do with the 2010 Olympics. On the contrary, the fundamentals behind the 2009 Vancouve house prices include 2 factors: record low mortgage rates and affordability which go hand in hand. These 2 factors will likely drive the 2010 Vancouver house prices upwards in the first half of the year. Therefore, the 2010 Olympics are a mute point. Most of the amateur investors who had flipped property or renovated homes and flipped them afterwards no longer are in the Vancouver real estate market. The Vancouver house prices 2010 will be much more stable the the boom years between 2005 – 2007. A second intangible factors that will affect 2010 Vancouver house prices are transportation nodes. With the completion of the Canada Line SkyTrain from Richmond to YVR to downtown Vancouver, this creates many new neighbourhoods in which we will see huge growth and demand in real estate. These areas will likely see the best increases in 2010 Vancouver house prices and demand will increase with limited new supply coming onto the market.

The Future of Vancouver Real Estate In a Nutshell

So our prediction for the next year is that the Vancouver real estate forecast for 2010 continues to be bright buoyed by low interest rates and the outlook of the dreaded HST on new homes. So the combination of the two factors will likely increase Vancouver property prices in 2010 (even if the interest rates remain low, as there are always forecastings saying a mortgage rate spike is in order in 2010 through 2010) and the HST which have negatively impact the new presale Vancouver housing market. Therefore, the presale Vancouver home prices will stabilize and possibly decrease as a result of the 12% HST added on to the purchase price, which will make resale Vancouver real estate more attractive, and therefore bumping and increasing the price of the resale Vancouver home prices 2010. With that in mind, overall, the Vancouver 2010 real estate forecast is good, as property values, home prices and housing prices should increase. Housing inventory for 2010 will remain steady as many projects will again start, but will not be completed until 2011 or beyond. The 2010 Vancouver real estate forecast will see Vancouver home prices increase through the first half of 2010, and then become more steady from the presale housing market value standpoint through the latter half of 2010. For the resale Vancouver home prices in 2010, they will increase throughout the year due to pent up demand as well as the forecast of increased interest rates.

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Thursday, August 13, 2009

Comprehensive BC HST Resource Base – Information/News About the British Columbia Harmonized Sales Tax

If you are looking for a website containing all the latest information regarding the new B.C. HST Tax, you have come to the right place! The new British Columbia Harmonized Sales Tax was announced by the BC Liberal Government in late July 2009 and will be introduced on July 1st, 2010, even with 85% public opposition to the new tax burden on consumer goods and services. The new BC HST is the harmonization of the 5 per cent Federal GST and the 7 per cent Provincial PST. The B.C. HST is the fifth of its kind in Canada, following Ontario, Newfoundland/Labrador, New Brunswick and Nova Scotia. For details about the BC HST on homes, BC HST on rent, rebates, transitional rules/policies, input tax credits, exemptions, other pertinent details regarding the new Harmonized Sales Tax, please read below. In addition, we have information about the anti-HST petitions, campaigns and movements currently increasing in number and support as well as an excellent B.C. HST Price Chart showing the tax increase difference when purchasing new homes after the introduction of the new tax. Click on the following links for more comprehensive HST information:

The BC Liberal Government Announced the Introduction of the BC HST Harmonized Sales Tax in Late July 2009.

1 | The Anti-HST Movement that includes the NO BC HST Facebook Campaign, the NDP Petition and the BC Liberal Recall Campaign. How severe is the HST backlash?

2 | A great B.C. HST Price Chart showing the increase in tax payable on new homes and closing fees for new property between $100,000 to $2,000,000.

3 | The Top 10 Facts about the BC HST and how it will increase new home prices.

4 | Comprehensive list of goods and services subject to the new BC Harmonized Sales Tax including exemptions and how the BC HST interacts with other current taxes.

5 | Information about the Partial HST Rebate on new homes in BC and Greater Vancouver. BC HST Rebate updates and news.

6 | Details about the BC HST Transitional Rules (or lack there of) and how it compares to the Ontario HST transitional policies. HST Transition will take time.

7 | Is there BC HST on rent? How does the new harmonized sales tax affect Vancouver rental rates and rental housing? Will the B.C. HST increase rents?

8 | The BC HST versus the Ontario HST? What are the differences between the BC and Ontario HST taxes that are both being introduced July 2010?

Newest BC HST articles published online:

Implications of B.C. HST on new Vancouver pre-construction condos, presale homes and real estate as well as effects of HST on first time home buyers.

Will GREEN initiatives and energy efficiency upgrades suffer because of the BC HST? BuiltGREEN products and services will be severely taxed and numbers don't make sense.

The British Columbia Harmonized Sales Tax of 12% HST will come into effect on July 1st, 2010.

9 | The BC HST versus the Maritime HST in Atlantic Canada? What are the major fundamental differences between the Newfoundland, Nova Scotia and New Brunswick HST taxes compared with British Columbia’s?

10 | Reaction from the construction and homebuilding industries. How is the new BC HST going to affect BC homebuilders, new condo developments, and jobs in the real estate industry?

11 | The new BC HST will see decreased housing affordability, increased rents, a BC construction industry crash and fewer first time homebuyers.

12 | The Top 10 Benefits of the BC HST according to the announcement presentation by the BC Liberal Government in late July 2009.

Stay tuned for more updates and information about the British Columbia Harmonized Sales Tax as they are announced.

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Wednesday, August 12, 2009

The New BC HST Will See Decreased Housing Affordability, Increased Rents, A BC Construction Industry Crash and Fewer First Time Homebuyers

FOR OUR BC HST INFO CENTRE, PLEASE CLICK HERE. Info covering B.C. HST Rebates, Transitional Rules, New Home Price Increases, Anti-HST Petitions and Much More!

B.C. and Greater Vancouver Homebuyers Will See Cost of New Home Purchases and Home Ownership Skyrocket by Thousands of Dollars Thanks to the New British Columbia HST Tax

According to artiles published from the Vancouver Sun and Province newspapers, British Columbians are in for a crisis following the B.C. Government’s announcement of the harmonization of the PST and GST taxes into the single 12% HST tax. What some British Columbians don’t understand quite yet, is why the government failed to notify the public and taxpayers earlier regarding their plans for the B.C. Harmonized Sales Tax and even then, why they didn’t seek input from taxpayers, various industries including the construction and home building industries in addition to other organizations and businesses. One thing is for certain: B.C. and Greater Vancouver homebuyers are the BIGGEST LOSERS under the controversial B.C. HST or harmonized sales tax. Starting July 1, 2010, the Harmonized Sales Tax of British Columbia will come into effect, and both new and resale Vancouver and BC home purchasers will be out of tens of thousands of dollars when purchasing their biggest single asset in their lifetime.

Most British Columbians view the new BC HST as a government tax grab that is unfounded and breaks the BC Liberal Governments' election promise to lower taxes.

Also, visit our updated BC HST Price Chart that shows the increased cost of purchasing a new home in Vancouver and British Columbia after the July 1st, 2010 HST implementation.

The Most Expensive Real Estate Markets in Canada Will Become More Unaffordable

B.C. real estate is the most expensive in all of Canada. And when you factor in the property markets in the Okanagan, Vancouver Island/Victoria and Greater Vancouver/Lower Mainland are the hottest and most expensive in the country, British Columbia homebuyers will suffer the most from this harmonized sales tax of 12% HST. BC residents will end up paying taxes on land, the house and other professional services in any B.C. and Greater Vancouver real estate transactio through the controversial BC HST tax implementation in 2010. Firstly, the 12% Harmonized Sales Tax will be applied to any new B.C. home or property. Compared to the current GST/PST system, new home buyers in Greater Vancouver and British Columbia only need to pay the 5% GST on any new real estate purchase (and even then, they get a significant rebate up to $450,000 purchase price) and PST is NOT applied to any new home purchase in the province. Under the new system with the new BC HST Harmonized Sales Tax on real estate, new homes will have the extra 7% (equivalent to the BC PST of 7%) applied to every new property transaction. BC already has one of the highest Property Transfer Taxes in the entire country too, with some partial PTT exemptions only for first time homebuyers and only up to a certain price point. Currently, the Property Transfer Tax in BC is calculated as 1% on the first $200,000 and 2% on the remaining amount, which can add a significant amount (thousands) to any new or resale BC or Vancouver home purchase. It has been calculated that a new home costing $800,000 in BC will be subject to the 12% HST tax with the maximum partial HST rebate at only $20,000. The difference between total purchase price of the new home in BC (not including increase costs in closing fees) is approximately $56,000.

The HST Input Tax Credit and What It Means to B.C. Home Builders

The new BC Harmonized Sales Tax system will have profound effects on the construction and BC home building industries, allowing homebuilders and developers to pass on the PST for building materials (about 2% in total) which can now be embedded into the price of a new British Columbia or Greater Vancouver home on the market. Again, the biggest losers are the BC and Vancouver homebuyers who will have to shell out this different as most homebuilders will be looking out for their bottom line and saving the 2% wherever possible. Under the new BC HST input tax credit regulations, home builders in Vancouver and the province can claim money back as an HST input tax credit, that would reduce their tax bill by about $8,000 if they pass this cost onto the end homebuyer of the new home. This is most likely the fact of life that new BC homebuyers have to face if they want to buy, design, construct or invest in a new property starting July 1st, 2010. Compared to the Fraser Valley real estate market, a new detached home in that region goes for an average of $506,000 resulting in an added $15,500 in taxes due to the B.C. Harmonized Sales Tax, and that is even after the HST rebate maximum.

The B.C. Harmonized Sales Tax has growing opposition with many anti-HST petitions, campaigns and movements gaining momentum.

The HST Will Influence Other Transaction Services

Other profound influences of the British Columbia Harmonized Sales Tax on other real estate transaction services, goods, and fees include realtor’s commissions that will cost a lot more and will rise from the 5% GST only to the 12% HST. The average real estate agent commission on a $800,000 home in B.C. is roughly $40,000, so the increase in 7% in taxes will add thousands to this fee for BC home sellers. In addition, if you take into account other real estate professional fees such as a notary public, legal fees, surveyor, appraiser or home inspector, all of which are subject to the 12% Harmonized Sales Tax in BC, this will certainly add hundreds more dollars onto your cash out in any BC real estate transaction, whether it is a new property or a resale property. Other transaction services affected by the B.C. 12% HST include such things as residual costs that include renovations, maintenance, green energy retrofits etc which are all subject to the twelve per cent harmonized sales tax come July 2010. Many home builders and renovators have already expressed their anger towards this new B.C. HST and say that they will build flat out until July 1, 2010. After this date, analysts predict a significant drop in sales of new B.C. and Greater Vancouver homes and according to the Greater Vancouver Home Builders’ Association, the introduction of the BC Harmonized Sales Tax will become a huge barrier to affordability in the housing markets in B.C. The higher costs of housing will have a profound influence on the middle class who are on the verge of upgrading their homes for their families or first time homebuyers who seek home ownership. The multi-millionaires will pay the tax, and will not really care, as they have the money. Some analysts also say that the $400,000 threshold for the BC HST rebate is way too low, especially in the Lower Mainland and Greater Vancouver real estate markets. The more realistic HST threshold should be around $750,000. The B.C. Real Estate Association even goes ahead and indicates that the BC Government should actually phase out the Property Transfer Tax (PTT) to help affordability in real estate. With the outlook that interest rates are certainly rising later in the year into 2010, the B.C. housing market is due for a fallout once the BC Harmonized Sales Tax takes into effect. Some analysts also predict that the new BC housing market will peak sometime in May or June 2010 as new homebuyers seeking new homes in B.C. and Greater Vancouver will likely make their purchase before the 12% HST tax burden hits in July … and with the BC Government and Bank of Canada likely to keep their promise at keeping their prime lending rate at 0.25% (and the major banks keeping their prime rates at 2.25%) until June 30, 2010, there really will be a rush in new home construction and purchases during that time period. Basically, the new B.C. HST is a tax that will be passed through the businesses to the consumers, so in the end, British Columbia homebuyers will be the hardest hit.

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