How the 2018 Budget Affects Okanagan Real Estate

In an effort to cool housing prices in British Columbia, the current Government’s 2018 Budget has introduced numerous changes that affect our real estate market in the Okanagan.

The following tax changes are being imposed:

  1. Property Transfer Tax Changes: A buyer is charged property transfer tax when purchasing property in British Columbia (some exemptions apply). The amount of tax is based on a percentage of the fair market value of the land and improvements on the date of registration of the purchase.

Effective February 21, 2018, the property transfer tax will increase a further 2% on residential property on the portion of the fair market value greater than $3,000,000.

  1. Foreign Buyer Tax Changes: The existing 15 per cent foreign buyer tax that applied only to Metro Vancouver is being raised to 20 per cent and will apply to expanded areas.This new higher tax will also cover the Victoria and Nanaimo land districts on Vancouver Island, the Fraser Valley, Kelowna and West Kelowna.
  2. Speculation Tax Added: This tax will cover the same regions as mentioned above, and is aimed at absentee homeowners. The tax will start at 0.5 per cent of a home’s assessed value for the 2018 tax year and increase to 2.0 per cent in 2019. It appears that if the home is a principal residence, if the home is rented long term, or if the owner pays income tax in B.C. – these homeowners will be exempt. The effect on owners of vacation properties in our sunny Okanagan is not yet clear.

As reported by the Vancouver Sun: “NDP Finance Minister Carole James acknowledged her government hasn’t fully modelled the effect of the new tax measures on B.C. real estate prices or calculated the cost of increased auditing and enforcement. But the government wants housing prices to drop, she said.”

Obviously aimed at cooling the housing price mayhem in the Lower Mainland, these taxes are now spreading to include the Kelowna and West Kelowna real estate market, although at this time, does not cover the North Okanagan, South Okanagan or the Shuswap.

 

  1. For more info on Property Transfer Tax increases: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand
  2. For more info on Foreign Buyer Transfer tax: https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/additional-property-transfer-tax
  3. For more info on the Speculation Tax: http://vancouversun.com/news/local-news/b-c-budget-2018-b-c-ndp-increases-and-extends-housing-taxes-in-effort-to-rein-in-speculation

 

Vernon Real Estate Market Update for January 2018

This North Okanagan Real Estate Update covers the areas of:  Vernon, Coldstream, Falkland, Armstrong, Enderby and Lumby.

Updated Stats for Residential Homes in the North Okanagan:

Sell/Inventory Ratio:   

17.95%  (this is how much of what is currently on the market sold last month)

Days to Sell:  

84 (how many days on average it is taking to sell a home)

Avg. Sale Price:  

$591,959 (averages can be skewed by a few really high, or really low $$ sales)

Median Sale Price:  

$520,500 (the exact middle sale price of every residential property sold last month)

Waterfront Home Sales: 

2 waterfront home sold year to date (compared to 0 last year in January 2017)

North Okanagan overall statistics:

Total Units that were newly LISTED (and active on the market) during each of the past 3 months:

Nov:          236

Dec:         105

Jan:          210

Total Units SOLD (all property types including raw land and commercial) during each of the past 3 months:

Nov:      159

Dec:      122

Jan:       111

Wrap Up:

Sellers:  Sales for January were up over 30% year over year!  Quite the start to the year!  A 30% increase in sales coupled with inventory down to below 1000 units to 995, there is definitely further pressure on pricing. This increase could be due to many buyers purchasing prior to the new mortgage regulations coming into affect, and may dip a bit in February.

Some sellers think that any real estate salesperson can sell their home in this market. This may be true.  However, do you just want to sell it or do you want to sell it for the most amount of money??  Statistics show our team sells homes on average for $4,813 more then the real estate board average.  If you would like to sell for more, call us.  If you don’t, call the other guys!  If you are looking to sell, this is an excellent time, the Real Estate Gods are in your favour!

Your home may be worth more than you think! Call us Today for a complimentary evaluation of the value of your home in today’s Seller’s market. 

Buyers:  The new mortgage rules are here and rates are slightly elevated, with predictions for rates to continue their slow upward trend throughout 2018. As mentioned above, the number of properties on the market dropped to below 1000 units.  That is very tight inventory and does not make finding the perfect home easy.  You have to be on your toes.  We are always keeping our ears to the ground to come up with new listings before they even hit the market for our clients, and with 8 team members, we have a very good chance of someone locating the right home for you.  Call us today to get on our client list to be informed of those hot new listings the fastest!  Beat other buyers to those new listings!

Should I buy a home now in this seller’s market?  We think so. For our reasoning as to why,  please see our Castanet article here.  

We can help get you to the newest listings first, often before other Realtors or the public hear about them with our unique Buyer Profile System – sign up to View Thousands of Homes right here!

Please feel free to Contact Us Anytime:  Lisa, Gord, Glenn, Alex, Joanne, Greg, Avrill and Christie of the Salt Fowler Team, RE/MAX Vernon – specializing in North Okanagan and Vernon BC Real Estate.

Should I Buy Vernon Real Estate in a Seller’s Market?

Often we are asked by buyers who are entering the market for the first time whether it makes sense to purchase in a market as hot as the Okanagan has seen for a very long time.

The answer is yes, assuming you’re planning to be in the market for the long haul. In any market a plan to own for the short term, or considering a fix and flip, is a riskier one.

There are a number of factors in the market place today that still make the decision to buy a two thumbs up. These factors are as follows:

  1. Interest Rates are still historically low. Although we have experienced a few rate hikes during the past few months, interest rates are still extremely favourable.
  2. Renting is often costing more on a monthly basis. As rents creep up (maybe a little faster than creeping), even as house purchase prices increase, the math still usually works in favour of paying a mortgage versus renting.
  3. Over the long run owning real estate is always a great investment. History always seems to repeat itself. Even most of those who purchased during the last real estate boom ending in late 2008 are realizing gains if their homes are sold today. The trick is to stick it out and wait until you are in a position to sell high (or higher!).
  4. Owning is an investment in your future. If you are renting, continuing to rent is helping someone else invest in theirs.

Investing in real estate is one of the best investments you can make. If you are purchasing a home as your principal residence, it is currently one of the best tax free investments you can make. Even though prices are higher than they were a few years ago, or even last year, a long term investment in your future is always a good one.

Our recommendation is buy now – and don’t wait. You don’t want to be looking back in a year saying to yourself: “I wish I would have bought when the prices were lower last year!”

For those living in the Middle Mountain subdivision, watch your mailboxes!

For those living in the Middle Mountain subdivision, watch your mailboxes! This is going to be delivered via Canada Post direct to your home very soon. If you find your contact info is incorrect please do let us know and we are happy to update this for you.

Any questions, please don’t hesitate to contact the Salt Fowler Team at RE/MAX Vernon at 250-549-SALT (7258) or webinfo@saltfowler.com, your Kalview homes specialists! We offer FREE Market Evaluations on all Vernon Real Estate!

Just Released!!  Our Foothills Area Market Update for Winter Season is Here! 

Just Released!!  Our Foothills Area Market Update for Winter Season is Here!  Here is a preview of our Foothills folder featuring homes and lots for sale and sold in the fabulous Foothills area in Vernon BC.  This folder will be mailed out in the next 10 days!  If you are interested in selling your home and having it advertised in this popular marketing piece, please let us know!  We would be happy to feature your Foothills, Vernon Real Estate here!  Contact the Salt Fowler Team at 250-549-SALT (7258) or visit our website to view thousands of homes for sale online all in one place at www.Foothills.info.

Enjoy this sneak preview of our Predator Ridge folder

Enjoy this sneak preview of our Predator Ridge folder featuring Resale Homes in the beautiful and serene Predator Ridge community that will be sent out in the next 10 days!  If you are interested in selling your home and having it advertised in this popular marketing piece, please let us know!  We would be happy to feature your Predator Ridge home here!  Contact the Salt Fowler Team at 250-549-SALT (7258) or visit our website for more info on Predator Ridge as well as thousands of other Vernon BC homes for sale at www.PredatorHomes.com.

Just Released!!  Our Kalview Area Market Update for Winter Season is here! 

Just Released!!  Our Kalview Area Market Update for Winter Season is here!  Here is a preview of our folder featuring homes and lots for sale and sold in the popular Kalview area of Coldstream BC.  This folder will be mailed out in the next 10 days!  If you are interested in selling your home and having it advertised in this popular marketing piece, please let us know!  We would be happy to feature your Kalview, Coldstream Real Estate here!  Contact the Salt Fowler Team at 250-549-SALT (7258) or visit our website to view thousands of Vernon homes for sale online all in one place at www.KalviewHomes.com.

Just Released!  The Winter version of our Lakefront Market Update folder.

Just Released!  The Winter version of our Lakefront Market Update folder.  To arrive in all North Okanagan Lakefront owner mailboxes shortly.  If you would like to receive a hard copy of this folder, please email us at webinfo@saltfowler.com or 250-549-SALT(7258).  .

For a FREE market assessment of what your Okanagan, Kalamalka or Swan lake home may be worth, please contact us!  The Salt Fowler Team, RE/MAX Vernon, your Okanagan waterfront specialists.

Should I Purchase a Manufactured Home?

Mobile homes are usually attractive to buyers for two reasons: affordability and the ability to obtain privacy on a limited budget. But are they a good investment in your future?

The reality is, real estate prices increase because land prices increase over time. The structures that are on the land are actually depreciating: the older they get, the less they are worth. In any real estate transaction the land is what is valuable and what increases in price the longer you own it.

Considerations:

The first item to consider is whether a manufactured home is on it’s own land. If it is, then your investment is generally secured. If it is not, and is on a leased piece of land (i.e. what is termed “pad rental”) the land is not included in the sale. What you are purchasing is the structure only and the right to continue to pay the land owner pad rent.

The second item to consider is, if the manufactured home is on a leased pad, how long and how secure is the lease? It is a private lease? Is it a First Nations lease? If it is a First Nations Lease, is the lease directly with the First Nations landholder or is it with the Crown? All these considerations come into play and can make the decision making more complicated.

The third item is the age of the home. If you need financing, older manufactured homes on pads are more difficult, if not nearly impossible, to finance with a bank. Because pad rental is involved and there is no interest in land, the bank will view the financing as a chattel loan (similar to a car loan, rather than a mortgage).  The result is a higher interest rate and shorter amortization period (i.e. period of time to pay the loan off).

As you can see, the ultimate decision on whether to purchase a manufactured home is a difficult one. Always the most prudent decision is to discuss the pros and cons with your real estate professional and, if you are looking for financing, your mortgage broker or banker.