The Vancouver Life Real Estate Podcast

This week in real estate, the landscape has been bustling with significant developments that are set to impact the Canadian market extensively over time. First off, the announcement made by David Eby regarding the sweeping rezoning legislation across the entire province has stirred things up. The legislation now permits the construction of multifamily units on any single-family lot, effectively transforming the housing prospects across British Columbia. This move comes in response to the record-high immigration figures, with the immigration minister affirming they will increase immigration to 500,000 people next year and then they will maintain that target for the next three years!In the United States, the Federal Reserve has also decided to hold its current interest rate, reflecting a similar trend seen in Canada as both economies begin to slow heading into the winter months. Furthermore, a fresh GDP update in Canada indicated stagnant economic growth despite rapid population expansion, pointing towards further economic slowdown. In fact, Q2 CND GDP reports have been revised downwards from flat, to negative. The 5-year bond yield in Canada has also witnessed a significant drop of 10% in the last week and a half, leading to expectations that fixed-rate mortgages will also soften in the coming months.Turning our attention to the October real estate statistics in Vancouver, the volume of sales has shown a very moderate increase from the previous year, yet they remain considerably below (-29.5%) the 10-year historical seasonal average. This is due largely to high mortgage rates deterring potential Buyers from the space. Meanwhile, new listings have been increasing and although overall inventory has experienced a slight dip, with the market leaning towards a balanced state, we should see continued trajectory towards a balanced and in some cases a Buyer's market. Notably, the HPI price has displayed a downward trend now for three consecutive months, while the median price has been on the rise.In terms of housing market's dynamics, the average days on the market remain steady at 12, indicating a swift turnover for well-priced properties. Despite the overall slowdown, certain high-demand properties are still generating significant levels of interest, as demonstrated by recent multiple offer scenarios we describe in the podcast. Well-maintained properties that are priced to market in a desirable neighborhood are continuing to sell and in some cases with competition.Looking ahead, it is expected that the current subdued level of activity will persist throughout the remainder of the year and will likely spill over into 2024, largely influenced by the rate hikes implemented nearly two years ago now compounded by seasonal fluctuations. Additionally, the slowing down of the US markets is projected to have a ripple effect on the Canadian economy and real estate landscape, further contributing to the prevailing market conditions as consumer sentiment remains pessimistic. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In this week's podcast, we delve into the implications of the latest interest rate announcement, rising (and in some cases surging) levels of inventory, consumer sentiment and the all-important mortgage space. The Bank of Canada's cautious tone was underscored by their acknowledgment of the mounting impacts of past rate increases on economic activity and inflation. Their statement, "the path to a soft landing is narrow," essentially underlined the precarious position we now find ourselves in, hinting at the looming potential of a recession. Recent indicators like the downward spiral of per capita GDP and plummeting retail sales, now at their lowest point in 2023, have further accentuated the need for a cautious economic approach. Surprisingly, this week marked a rare rift between policymakers. Political figures like David Eby and Doug Ford recently implored the Bank of Canada for a cessation of rate hikes, to which the Bank responded firmly by emphasizing its political independence, urging governments to consider their spending and its inflationary consequences!The BoC has indicated that inflation is not expected to normalize now until 2025. However, market speculations are already pricing in a potential rate cut in June 2024 which could see us ending 2024 at 4.25% after a series of small cuts. Meanwhile, the steady erosion of consumer and business confidence levels, sinking below historic lows, has further exacerbated economic concerns in the short run. On the real estate front, despite a surge in mortgage activities indicating a possible return to stabilization, affordability issues persist as the affordability index reached its highest point since the '90s. Moreover, burgeoning listings, coupled with the gradual rise in inventory, might signal a potential shift in the market, evoking memories of the 2015 landscape, where prices dropped sharply amid elevated inventory. Adding to the economic intricacies are the proposed amendments to the short-term rental laws in British Columbia which have sparked a heated debate; highlighting the delicate balance between regulatory control and market demands. As we analyze these intertwined factors, it is becoming clear that our economic landscape is at a critical juncture, where cautious maneuvers and decisive policy decisions will shape the trajectory of our collective financial future. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Today's recent announcement that The Bank of Canada has opted to maintain interest rates at 5% marks the fourth instance of holding rates during the ongoing rate hike cycle. The decision comes in the wake of a press release highlighting several concerns, including the weakening global economy, the surge in oil prices, ongoing geopolitical uncertainties, and persistent inflationary pressures. Today we unpack that decision with Mychal Ferreira, Bank of Montreal's number 1 mortgage broker in the country. Despite the apparent stability in rates, the Canadian economy continues to grapple with the aftermath of previous rate hikes, as evidenced by lower consumer spending and critical shifts in the housing market. Indicators suggest that the balance between supply and demand is gradually stabilizing, but the overarching concern remains the sluggish progress towards achieving price stability and the escalating risks of inflation. As a result, the door remains open for the possibility of further rate increases, emphasizing the cautious stance of policymakers.Interestingly, markets had accurately anticipated the decision to hold rates, corroborating the notion that the current cycle of rate hikes might be reaching its culmination. Observing the larger picture of 2023, the year has witnessed a modest 0.5% increase in rates, providing some semblance of cresting rates considering the year before. However, for many Canadians, this minimal respite fails to offset the substantial impacts of the staggering 475 basis point hike experienced over the past 19 months and what it will do as mortgages terms mature.With approximately 70,000 mortgages up for renewal every month and individuals increasingly resorting to lines of credit and credit cards to navigate the high rates, the strain of the elevated rates is palpable. The imminent renewal of 331 billion Canadian mortgages in 2024, originating from an era of relatively lower rates, will further underscore the real impact of the persistently high rates on households.To shed light on the current mortgage landscape, Mychal highlights the significant impact of the rate hikes on those with 5-year fixed mortgages. With an average overnight rate of 1.75% when these mortgages were initially obtained, the current 5% rate implies a substantial increase in mortgage payments and the dynamics that Banks may need to offer to keep people in their homes.There's growing sentiment that the trajectory of rates in today's marketplace are peaking for this cycle and are expected to hover around 4.5% by the end of 2024. Barring a black swan event, there's growing potential for a rate cut in the summer of 2024, followed by gradual adjustments to achieve a neutral rate over 2025.Pre-sale valuations are also an area of concern, with many builds completing today. There are those who are experiencing valuation deficits and qualification issues because they did not pursue financing options at the time of their pre-sale purchase. We touch on how to avoid this and how folks are taking possession of their new builds today, with 30yr amortization periods at a 2.5% interest rate!Contact Mychal:mychal.ferreira@bmo.com778.288.3173@mychalmortgages _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

The provincial government is creating even more restrictions around Air bnb operators with a recent announcement made by Premier David Eby and Housing Minister Ravi Kahlon regarding a proposed ban on short-term rentals in British Columbia. There are however, some exceptions for smaller municipalities and specific resort but their intent here is step up enforcement with bigger penalties and to discourage landlords and investors from removing properties from the long-term rental market. At a time when the region is grappling with soaring rental rates, predominantly impacting the condominium sector, the government is creating more restrictive policy by attacking demand, turning away long term investment and damaging the tourism sector in some of BC’s most important communities.Instead of looking at ways of boosting new supply, the proposed ban includes provisions for increased fines and the establishment of an enforcement unit. However, there will be potential challenges in enforcing the new regulations, especially if those who were utilizing Air bnb decide to create short term rentals on other platforms like Facebook Marketplace or Craigslist. Air Bnb Canada has argued that the proposed legislation could adversely affect the income of residents who currently hold Air bnb properties and reduce tourism spending in affected communities like Kelowna, Penticton and many others. Furthermore, they also believe bans like this won’t do anything to help with the overall housing crisis that the province finds itself in.Moreover, the argument as to whether the potential implications of the ban, its efficacy in addressing the housing crisis here in BC and its impact on investors and the tourism sector will actually make an impact. It feels largely like a knee jerk reaction to the loud cries of affordability in the rental market. To be seen as trying to make an immediate impact for constituents who are really grappling with the outcome of negligent public sector housing planning & legislation over the last two decades. The truth of the matter is that the policy is aimed at a small group of investors who do not have a large enough footprint in the market to make a considerable impact on the rental market. Nor were these operators the ones who created the housing shortage. Moreover, if current operators of Airbnb can’t achieve a net positive cashflow from long term renters in the absence of short-term rentals, the assets will sell to new end users - which still leaves the renter with no new inventory. Lastly, this week we touch on the current dynamics of the housing market, shedding light on the declining housing starts amid a significant influx of immigrants, resulting in a market standstill. Additionally, insights are provided on the latest inflation figures and findings from the MNP Consumer Price Index insolvency firm's quarterly survey, revealing mixed sentiments among Canadians regarding their ability to manage debt in the face of rising interest rates and a cooling economy. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

The podcast explores the decline in consumer confidence in the Real Estate market, potential recession indicators, and the impact on housing demand and immigration in Canada. It also discusses the challenges and volatility in the real estate market in Toronto and Calgary, as well as the state of the mortgage market.

In this week’s episode, we're diving into the current state of the Fall real estate market with the September Stats and it's not looking very (pumpkin)spicy. With falling prices, low sales volumes, high mortgage rates, and a significant lack of inventory to choose from, it's shaping up to be quite a challenging season for both buyers and sellers.Let’s look at the numbers - We saw a total of 1,926 sales in September, which is a 20% decrease compared to August. This marks the fourth consecutive month of declining sales, which is unusual for the Fall market - although perhaps it isn’t when you consider the circumstances. However, September still surprised us with year over year sales volume increasing by 13%, but still 26% below the 10-year seasonal average.At that pace, it’s looking more and more like there won't be a traditional 'fall' market this year, as high mortgage rates and below-average sales volumes are likely to persist throughout 2023 and into 2024.New Listings are up! In September, 5,446 properties were newly listed, showing a 28% increase year-over-year and a 5.2% rise above the 10-year seasonal average. Interestingly, monthly new listings have rarely exceeded the 6,000 mark since 2005, remaining relatively steady over 18 years despite a 600,000 increase in GVRD population.Total inventory sits at 10,647 listings and this is only the second time it has crossed the 10,000 mark in the past year, increasing by 7% month-over-month. While inventory is up by about 100 listings compared to the previous year, it remains 40% lower than pre-pandemic levels. We expect a slight climb in inventory for October and November and we should also mention that foreclosure rates account for a negligible 0.005% of the total inventory.The Sales to Active Ratio has us sitting in balanced market territory at 17.7%, this ratio is down 6.3% month-over-month and a significant 19% since the peak in May when it hit 37% - a strong Sellers market. This marks the first time the market has reached a balanced state since January, albeit for just one month.The Housing Price Index (HPI) has dropped for the second consecutive month, down 0.4% month-over-month to $1,203,300. While this reflects a 4.4% year-over-year increase, prices are only down 5% from their all-time high in April 2022, despite substantial increases in mortgage rates. Median prices have seen some fluctuations, jumping by $65,000 but recovering from a $78,500 drop the previous month to reach $965,000, which is 3.5% under the all-time high!Join us on the podcast this week and get the full story! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In this podcast episode, we delve into the pressing housing crisis in Canada, particularly focusing on British Columbia and Vancouver with the release of the much anticipated multiplex plan. There’s a number of challenges faced by local councils when it comes to enacting new by-laws for any kind of real estate but particularly when it comes to an initiative of this magnitude. With city council looking at a mid-October deadline to enact the new law, we could see real change coming soon!Recent newspaper headlines have indicated that municipalities could be ordered to build up to 60,000 new homes across ten municipalities within the next five years in BC. Although, we’re not quite sure how to order a developer to build a new home under today’s current economic climate - as such the emphasis for aggressive incentives will be required to see the projects success. Take the Housing Accelerator Fund for example, a federal policy that would grant the District of North Vancouver $9 million dollars subsidize 3,000 homes... which amounts to just $3,000 dollars per home - an amount that has been scrutinized for its perceived inadequacy.We also explore the need for both short-term and long-term housing plans that address the demand that exists within the country. We discuss the importance of housing policy reform, addressing rent controls, streamlining permitting and rezoning processes, and adjusting tax structures. Immigration policies need to be re-aligned with available housing capacity and we discuss the need for adequate incentives to not only builders but also investors and current home owners who elect to supply housing within our tight market.Lastly, we delve into and discuss the comments from local mayors and we consider the recent actions from the Minister of Finance, who announced that the annual limit for Canada Mortgage Bonds is being increased from $40 billion to up to $60 billion. This will help to unlock low-cost financing for multi-unit rental construction as will the removal of GST on the construction of rental units and no cost to rezoning thanks to the multiplex plan and the accelerator fund. All good starts.. but will it be enough or is it just a drop in the proverbial bucket? _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

On September 14th, Vancouver City Council greenlit the MultiPlex Plan, a sweeping rezoning strategy aimed at introducing more flexibility into residential development within Vancouver. This ambitious plan consolidates nine residential zones into a single R1-1 Residential Inclusive zone, affecting the majority of single family lots in the Vancouver East and Vancouver West areas. There are also some notable areas that are exempt from this and we discuss them mid way through our podcast episode.The MultiPlex plan allows for between 3 to 6 or even up to 8 units per lot, with a maximum density of 1.0 Floor Area Ratio (FAR) and a building height cap of 37.7 feet, typically limited to three stories. For example, a 4,000 sqft lot could support a 4,000 sqft building.It's estimated that approximately 65,000 lots will be affected by the sweeping zoning amendment and around 200 multiplexes could be constructed annually, potentially accommodating an additional 1,700 people when they are eventually built. With that said challenges such as infrastructure upgrades, parking solutions, and the impact on local schools & hospitals still loom. So far the City of Vancouver website has yet to provide more detailed information.Simultaneously, on September 14th, the Prime Minister unveiled the Federal GST Rental Rebate initiative, aimed at incentivizing the construction of purpose-built rental housing across Canada. This enhanced rebate, effective for projects commencing construction from September 14, 2023 onward, until December 31, 2030, increases the GST Rental Rebate from 36% to 100%. Eligibility extends to new purpose-built rental housing projects only.While the rebate serves as an incentive for rental housing construction, we question whether it’s enough to spur significant growth in the rental housing market. In order to create a more favourable landscape to take a project like this on, measures such as removing rental caps or indexing them to inflation will be required to further stimulate development.Canada's inflation rate continued to surprise to the upside for the second consecutive month in August, with the Consumer Price Index (CPI) surging to 4.0%, up from 3.3%, surpassing expectations of 3.8%. Looking ahead, it is anticipated that inflation will accelerate for one more month in September before a potential cooling trend in October. Even if inflation maintains an average monthly increase of 0.2% from this point onward, the year-end projection for 2023 points to a rate north of 4%, which is a concerning figure for the Bank of Canada.This episode has a ton of great value including more information on the record amount of immigration, historic lows for building permits and rising mortgage rates all converging at the same time! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This week is a jam packed episode that really underscores the housing crisis in Canada is hitting unprecedented levels. With projections from the Canada Mortgage and Housing Corporation (CMHC) indicating a severe shortage of up to 4 million housing units by the year 2030, this crisis is expected to have far-reaching consequences, including a staggering 89% increase in housing prices over the next 6 years, according to CMHC estimates. That puts the average home price at an eye-watering $2,295,000 by 2030. To put this into perspective, you would need to save $181,000 per year until 2030 just to offset the difference in price from today’s number.Although it may seem impossible, these projections come against the backdrop of a relatively modest 15% increase in housing prices over the past six years. However, the past four years have witnessed a more significant surge, with prices climbing by 36%, harking back to the alarming 84% increase observed from 2010 to 2016.GDP data offers insights into the country’s overall economic health and depending on how you look at it, two out of the last three quarters have seen a decline in GDP and the last quarter having contracted. This signals that the interest rate hikes imposed over the las 18 months are beginning to take effect. Household spending has hit a two-year low, and residential investment has plummeted for five consecutive quarters. While it has returned to pre-COVID levels, new home construction has dropped by 8.2%.While building permits are at 20 year lows, developers with imminent projects have moved forward. In Greater Vancouver, inventory has increased by 11% in the first two weeks of September, reaching its highest level in three years, potentially indicating a more favourable market for frustrated buyers in the short run. In terms of rate hikes, expectations have shifted significantly. Initially, there was a nearly 100% probability of a 0.25% rate hike by January 2024, but this has now dropped to around 40%. The markets now believe that Canada may have reached a rate hike peak, barring unexpected large increases in inflation reports. The fear is that a contracting GDP may lead to a recession, with the potential consequences yet to be fully understood. So much to unpack in this one! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This week we sat down with Ethan Astaneh from Nicola Wealth, an independent wealth management firm dedicated to serving the complex needs of high-net-worth individuals, families, and institutions. The firm services clients across Canada and has amassed a $14 Billion dollar portfolio - a considerable portion of which is invested in real estate. In this  episode, we discuss the Canadian residential real estate market and dive into a number of different topics from the performance of each asset class to the impacts of higher interest rates and the shortage of supply.We examine key metrics and consider each housing types position on the market. We look at condos, townhouses, and detached houses across the GVRD and discuss whether they sit in a buyers' or sellers' market. We also take a deep dive and explore the impact of rising interest rates on the market and how it has affected different housing types, including data on building permits and housing starts.We also consider current mortgage rates and the potential wave of renewals at higher rates in the next 2-3 years due to low-rate debt taken on throughout the pandemic and their impact on affordability, inflation and rental rates. Diving into Vancouver's multiplex plan, which was announced in the Spring of 2023, we discuss its purpose, the implementation phase and what it could mean for single family home owners in Vancouver.When markets shift, so does the psychology behind residential real estate. We unpack the sentiment in the market place, what buyers and sellers are considering in today’s marketplace. Finally, we end the episode by identifying key opportunities and risks over the next 6-12 months as we navigate the current market dynamics.  _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com