There's been a lot of controversy surrounding the recent implementation of the Foreign Buyers Tax on the purchase of Vancouver Real Estate. Sellers of properties, both detached homes and condos, have expressed concern about dropping prices, while purchasers of vancouver properties are hoping it brings relief to prices. Here's a look at the facts so far
 http://bc.ctvnews.ca/mobile/infographic-what-happened-to-home-prices-after-the-foreign-buyer-tax-1.3289303

Metro Vancouver housing market off to a quieter start than last year

Home sales and listings trends are below long-term averages in the Metro Vancouver* housing market. This is due largely to reduced activity in the detached home market.

Residential property sales in the region totalled 1,523 in January 2017, a 39.5 per cent decrease from the 2,519 sales recorded in January 2016 and an 11.1 per cent decrease compared to December 2016 when 1,714 homes sold.

Last month’s sales were 10.3 per cent below our 10-year January sales average.

“From a real estate perspective, it’s a lukewarm start to the year compared to 2016,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said. “While we saw near record-breaking sales at this time last year, home buyers and sellers are more reluctant to engage so far in 2017.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,140 in January 2017. This represents a 6.8 per cent decrease compared to the 4,442 homes listed in January 2016 and a 215.5 per cent increase compared to December 2016 when 1,312 properties were listed.

The total number of homes currently listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver is 7,238, a 9.1 per cent increase compared to January 2016 (6,635) and a 14.1 per cent increase compared to December 2016 (6,345).

The sales-to-active listings ratio for January 2017 is 21 per cent. This is the lowest the ratio has been in the region since January 2015. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Conditions within the market vary depending on property type. The townhome and condominium markets are more active than the detached market at the moment,” Morrison said. “As a result, detached home prices declined about 7 per cent since peaking in July while townhome and condominium prices held steady over this period.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $896,000. This represents a 3.7 per cent decline over the past six months and a 0.2 per cent decrease compared to December 2016.

Sales of detached properties in January 2017 reached 444, a decrease of 57.6 per cent from the 1,047 detached sales recorded in January 2016. The benchmark price for detached properties is $1,474,800. This represents a 6.6 per cent decline over the last six months and a 0.6 per cent decrease compared to December 2016.

Sales of apartment properties reached 825 in January 2017, a decrease of 24.7 per cent compared to the 1,096 sales in January 2016.The benchmark price of an apartment property is $512,300. This represents a 0.3 per cent increase over the last six months and a 0.4 per cent increase compared to December 2016.

Attached property sales in January 2017 totalled 254, a decrease of 32.4 per cent compared to the 376 sales in January 2016. The benchmark price of an attached unit is $666,500. This represents a 0.4 per cent decline over the last six months and a 0.7 per cent increase compared to December 2016.

Ten Things You Should Know About The BC Home Owner Mortgage and Equity Partnership Program

1. The BC Home Owner Mortgage and Equity Partnership Program helps eligible first-time home buyers who have saved part of a downpayment and can afford a mortgage. This three-year program began accepting applications January 16, 2017 and ends March 31, 2020.
2. The program offers a downpayment loan of up to 5% of a home’s purchase price, to a maximum of $37,500, on a home with a maximum price of $750,000. The loan matches the buyer’s downpayment and is interest-free and payment-free for five years.
3. Before applying, the applicant must have a partial downpayment saved (or gifted) and must be pre-approved for a high-ratio insured first mortgage for at least 80% of the purchase price. Buyers must have qualified under all rules for a mortgage including the stress test. The combined, gross household income of all individuals on title cannot exceed $150,000.
4. The pre-approval letter can come from a mortgage broker.
5. To qualify, the home buyer(s) must meet requirements on this eligibility checklist. They must be a Canadian citizen or permanent resident for at least five years, have lived in BC for one year, be a first-time buyer who hasn’t owned an interest in a residence anywhere in the world at any time, and plan to live in the home as their principal residence for the first five years.
6. The program is delivered entirely online with a smartphone friendly interface. There’s no physical paperwork. Buyers submit their application here. They must register first. This online calculator helps determine eligibility.
7. Only the buyer can complete the application. There are liability considerations. If the buyer claims to have never owned a home anywhere in the world, and the government later discovers this is untrue, the buyer can’t say “My REALTOR® completed the application for me.” If the buyer has questions they can phone the BC Housing information line at 604-439-4727. Staff members speak multiple languages.
8. In BC, 87% of apartments, 73% of attached homes, and 19% of detached homes currently on market could qualify for this program, according to Dan Maxwell, Chief Financial Officer of BC Housing.
9. After five years, buyers repay the loan or begin monthly payments at a fixed rate equal to the Royal Bank of Canada Prime Rate plus 0.5%. This interest rate is reset at each of the 10, 15 and 20 anniversaries. Loans are due after 25 years.
10. The home buyer is responsible for all costs associated with the purchase and financing of their home, including legal costs.

The Process

1. The applicant gets pre-approval for insured first mortgage.
2. The applicant applies to BC Housing (BCH) which issues a confirmation of eligibility letter highlighting details and key dates within five business days. BCH issues a Home Buyer’s Package.
3. The applicant makes offer to purchase an eligible home, and provides BCH with copy of Contract of Purchase & Sale.
4. BCH issues Conditional Loan Approval Letter for the applicant to take to the lender to finalize first mortgage approval.
5. The applicant completes due diligence and removes subjects.
6. The applicant provides BCH with the unconditional Contract of Purchase and Sale at least 14 days before closing.
7. BCH’s lawyer sends the mortgage package and closing instructions to the applicant’s lawyer.
8. The applicant completes the home purchase with their lawyer. The BC HOME loan is secured by a second mortgage registered on title to the home on the closing date. The HOME Partnership loan funds are released following registration of second mortgage.

Source: BC Housing

Example #1 – Home purchase price $475,000, home buyer has saved $11,875

• Minimum downpayment required for an insured first mortgage - $23,750
• BC HOME Partnership loan - $11,875 (equal to home buyer’s downpayment, equal to 2.5% of purchase price)
• Total downpayment - $23,750

Example #2 – Home purchase price $750,000, home buyer has saved $52,500

• Minimum downpayment required for an insured first mortgage - $50,000
• BC HOME Partnership Loan - $37,500 (maximum 5% of purchase price)
• Total downpayment - $90,000

At 3%, this home buyer will save $5,201 in interest payments during the first 5 years of their mortgage compared to if they had purchased the home without BC HOME Partnership.

How many loans?

The government forecasts:

• 42,108 loans will be issued by 2020.
• These will have a total dollar value of $703 million.
• The average loan will be $16,685.

Information and application details