Image generated by DALL-E OpenAI: City of Vancouver in the Future

Happy Monday!

2023 is the Year of the Rabbit symbolizing peace and prosperity, while 2022 was all about the three ‘i’s—inflation, interest rates, and inventory constraints. Never in history has there been a rate move like we saw on a percentage basis, with the prime rate capitulating 163% in just ten months. The Bank of Canada hiked its key policy rate seven times consecutively to 4.25%, though it seems the market hasn’t adjusted to these higher rates yet. The consensus among many economists suggests the tightening cycle may be nearing the end, and Spring 2023 will indicate whether buyers and sellers have adjusted to the high borrowing costs and participate more actively.

Downward pressure on home prices continued, dropping nine months in a row since peaking in March 2022. The Real Estate Board of Greater Vancouver reported total residential home sales in 2022 at 28,903, decreasing by 34% from the previous year—13% below the 10-year sales average. Listings on the MLS® reached 53,865, representing a 14% decrease compared to the 62,265 homes listed in 2021. In December 2022, home sales decreased by 52% year-over-year—38% below the 10-year December average. New listings were at 1,206, a 38% decrease year-over-year, and a 61% decrease month-over-month.

The sales-to-listings ratio is 18%; 12% for detached homes, 20% for townhomes, and 22% for apartments. With 88% of houses on the market not selling, waiting to list may ultimately affect how much equity you can extract. Nearly double the amount of detached listings expired on January 1st, 2023 compared to the year before. The supply problem is likely to worsen this year, as some sellers opt to rent out their homes rather than sell into a tough market.

Immigration, Refugees and Citizenship Canada (IRCC) said the country added more than 431,645 new permanent residents in 2022—the largest annual increase of residents in Canadian history, breaking the prior year’s record of around 401,000 newcomers. 2023 will have a focus on housing affordability, and the focus may shift to condominiums as they have a more attractive price point, and investors are able to achieve higher returns because of the sharp rise in rental prices and immigration.

New financial products are emerging in the form of downpayment assistance, private equity, and fractionalization as with US based company Pacaso. Co-ownership is on the rise, as Freddie Mac reported between 1994 and 2022, that purchase loans from young adult borrowers aged 25-34 had a co-borrower aged 55+ on their application. That strategy didn't bode so well for a group of 5 friends who pooled funds together as a way to get into the Vancouver housing market—investing in a new duplex in East Vancouver, only to have it go up in flames.

Stress Test

OSFI confirmed the mortgage stress test is here to stay, meaning homebuyers are subject to the minimum qualifying rate of 5.25% or your mortgage interest rate plus 2%—whichever is higher. If you already have a mortgage, you’ll need to pass the stress test if you refinance your home, switch to a new lender, or take out a HELOC.

"Sound mortgage underwriting includes a margin of safety that ensures borrowers will have the ability to make mortgage payments in the event of negative financial shocks, such as a reduction in income, an increase in mortgage interest rates or related housing expenses. In an environment characterized by rising mortgage interest rates, sustained high inflation and potential risks to borrower income, it is prudent that lenders continue to test borrowers for adverse conditions. OSFI will continue to evaluate the impact of its guidance and policy tools and is prepared to make changes at any time if conditions warrant."

Prohibition of Non-Canadian Purchasers

The purchase of residential property by non-Canadians is prohibited as of January 1st, 2023, with the following exceptions:

  • a temporary resident within the meaning of the Immigration and Refugee Protection Act who satisfies prescribed conditions;
  • a protected person within the meaning of subsection 95(2) of that Act;
  • an individual who is a non-Canadian and who purchases residential property in Canada with their spouse or common-law partner if the spouse or common law-partner is a Canadian citizen, person registered as an Indian under the Indian Act, permanent resident or person referred to in paragraph (a) or (b) (must be either living with a spouse for 12 months or filed taxes in Canada for 3 years); or
  • a person of a prescribed class of persons.

Featured Listings

Surrey homes from $399,900, with 150 homes under $549,900
The smartest homes in dynamic Surrey City Centre are coming soon. Lucent by Landa features 404 studio, one, two, and three-bedroom condos and townhomes. Smart & Security Technology by 1Valet. Featuring keyless building entry, safe parcel deliveries, amenity booking, and concierge communication. Not to mention access to over 23,800 sft of indoor & outdoor amenities.
SOCO Two by Anthem offers a collection of studio to 3 bedroom homes designed with form and function in mind. This vibrant mixed-use community in the heart of South Coquitlam offers unparalleled access to rapid transit, highway networks and multi-use bike pathways. Homes and gathering spaces have been designed with a vision to inspire connection, while retail and office throughout the community offer convenience.

Join me Saturday, January 14th from 12-2pm for the SOCO Two Grand Opening celebrating Lunar New Year and showcasing a designer display home and Coquitlam Discovery Centre. Enjoy canapés by The Lazy Gourmet, entertainment by DJ Cami, professional photography in a custom Lunar New Year setting, and a chance to win one of many exciting door prizes. Be the first to find out about the exclusive Lunar New Year promotion, which will be released during the event.

Contact me to RSVP

MLS® Listings

Detached Homes

Attached Homes

Thank you for your time today.
Contact me with any questions you may have.

Adam Naamani
REALTOR® with eXp Realty
+1 (604) 889-7943
Copyright © 2023 Adam Naamani, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.

This is not intended to induce a breach of an existing agency agreement.

Email Marketing Powered by Mailchimp