View the below video on Home Staging - Major Renovations

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New tax policies put pressure on Canadians to sell their secondary properties within the province

Albertans anticipated to look within their own province and to the United States for secondary properties

TORONTO, March 29, 2018 –  According to a Royal LePage advisor survey, which consolidated the views of 535 real estate professionals in British Columbia and Alberta, the implementation of new housing taxes outlined in British Columbia’s 2018 budget have the potential to significantly impact the province’s residential real estate market. While previous provincial measures have targeted foreign homebuyers, the implications of the new tax policies will be much more widespread, primarily affecting domestic homeowners located in B.C., Alberta and other parts of Canada who have made the tourist-focused region their second home.

British Columbia’s tax policies within its 2018 budget include the introduction of a speculation tax on qualifying secondary homes, an increase to the foreign buyer tax as well as an expanded list of affected regions and an increase to the property-related school taxes and land transfer taxes on homes worth over $3 million.

When asked, 85.0 per cent of advisors operating in British Columbia said that the new tax policies have hurt consumer confidence in residential real estate across the province. A further 78.0 per cent of respondents believe that home sales will decrease within the first three months of the announcement of the new policies, while the majority (57.3 per cent) stated that prices will also decrease during the same period of time.

“The expected impact of the proposed housing taxes announced in British Columbia should not be taken lightly,” said Phil Soper, President and CEO, Royal LePage. “Homeowners across the province will feel the effects as major policy changes like this are also amplified by a drop in consumer confidence.  We saw this happen in 2016 when the previous government launched a tax on foreign investors. A small number of international purchasers withdrew from the market – along with a huge cohort of domestic homebuyers.

“Canadian homebuyers from coast-to-coast were already struggling with new federal restrictions on access to mortgage financing,” continued Soper. “We expect the impact of the new government’s housing tax policies to be even more pronounced as they will force Canadians, Americans and potential buyers from elsewhere in the world out of the market.”

While 77.0 per cent of advisors stated that the provincial regulations will cause interest from international purchasers to decrease, this demographic was ranked last when respondents identified the group that was most impacted by the new policies. When asked, 44.8 per cent of advisors stated that the new housing policies most impacted residents of British Columbia, followed by 43.5 per cent who believed it was Canadians who own or are looking to buy property in British Columbia, but predominantly live in other provinces. Only 11.3 per cent of real estate professionals forecast that the policies would impact international purchasers the most.

“We expect that the new taxes will materially impact communities that rely on recreational property markets for the health of their local economy,” said Soper. “There will be some Canadians in British Columbia and across the country that will choose to sell their properties in the province as the new taxes add to the cost of homeownership.

“There are further unintended consequences from these kinds of policy changes,” Soper concluded. “If property values decline, property tax revenues decline. Local municipalities will have to deal with this added burden.”

When asked, 81.5 per cent of advisors said the new tax policies within British Columbia’s 2018 budget have already caused interest from Canadians living outside of the province to decrease, with 73.8 per cent believing that the move will lead the group to sell their property. This is predominantly led by the impending speculation tax, which 90.8 per cent of respondents believe will impact sales in the province from prospective homeowners located in other areas of Canada, like Alberta.

These sentiments were verified by advisors in Alberta, with 80.7 per cent believing that Alberta-based interest in B.C. recreational properties will decrease, and a further 75.6 per cent stating that Albertans who currently own recreational property in British Columbia would likely sell their secondary homes. Instead, it is believed that Albertans will now increasingly look within their own province (72.6 per cent) or south of the border (46.7 per cent) for secondary properties.

Survey Methodology

Royal LePage’s advisor survey was conducted online between March 14, 2018 and March 20, 2018, polling a total of 400 Royal LePage real estate advisors from British Columbia and a further 135 from Alberta. Responses were anonymously recorded and analyzed independently.

On March 26th, 2018, British Columbia announced amendments to its speculation tax. These amendments do not change the opinion of Royal LePage and its network of real estate professionals. While the size of the new taxes has been reduced modestly in one of the categories, the entire scope of the new tax regime remains in place. The results of the Royal LePage advisor survey are reflective of current expert opinion on real estate in the region.

About Royal LePage  

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of almost 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

Reprinted with permission...

Taking on a do-it-yourself (DIY) project can be a gratifying experience. A key factor in DIY project success is careful research and safe execution.

Follow these tips to stay safe:

1. Dress with your safety in mind. Serious injuries can be easily prevented with a few simple precautions. If you have long hair, tie it back. Remove jewelry and loose clothing that could get caught in machinery.
2. Wear a dust mask, respirator and safety goggles. Understand the materials you're working with and protect yourself against inhaling dust particles or fumes. Similarly, safety goggles reduce the likelihood of sustaining optical injuries.
3. When working with electricity, wear rubber-soled shoes. Rubber acts as an insulator and reduces conductivity of electricity and your chances of electrocution. However, in most cases, it is recommended that electrical repairs are best left to professionals.
4. Keep any machinery and equipment in top shape. Drill bits, cutters, and other blades that are left to dull can cause serious injuries. Dull blades can bind or kickback. Keep your blades sharp and up-to-date.

Use ladders safely. For every four feet of height, your ladder should sit at least one foot from the vertical surface upon which it is leaning. Know the height of your ladder and situate it accordingly. Never step on the top two rungs of a ladder.

It is true that a front garden, or an array of planters on a porch or balcony, will add to the appeal of your home among potential buyers. Selling a home in the spring months requires more attention to your outdoor spaces. However, there are ways to make short work of your garden chores.

Here are a few tips on how to create a low-maintenance garden to carry you through the selling season:

1. Easy container gardens. Use planted containers in a variety of shapes and sizes for a charming look in entrance ways or on a balcony. Pot your urns with a variety of tall, medium and trailing plants.
2. Incorporate perennials for easy care. Choose perennials as the backbone of your garden then add colour as needed with a selection of drought-resistant annuals.
3. Drought-tolerant plants. Choose annuals that require less watering such as zinnias and marigolds. Perennials offer the hardiest choices. Ask at your local garden centre for recommendations on drought-tolerant plants for your area.
4. Condition your soil. To promote lavish growth, add manure or compost to your soil. Testing your soil will help identify excessive sand, clay or other elements that contribute to or take away from soil acidity.

Don't forget to fertilize. 

Periodically, you'll need to feed your plants.

Fertilizing will keep them healthy, robust and promote consistent flowering.

According to the Royal LePage House Price Survey¹, Canada's residential real estate market saw strong, but slowing year-over-year price growth in the fourth quarter of 2017.

While year-over-year aggregate appreciation remained high in the Greater Toronto Area (GTA) and Greater Vancouver, two-storey and bungalow home values softened in the GTA, slightly declining on a quarter-over-quarter basis. Meanwhile, in both Greater Vancouver and the GTA, condominium prices continued to outpace all other property types, primarily due to growing affordability constraints within these markets.

The Royal LePage National House Price Composite, compiled from proprietary property data in 53 of the nation's largest real estate markets, showed that the price of a home in Canada increased 10.8 per cent year-over-year to $626,042 in the fourth quarter of 2017. When broken out by housing type, the median price of a two-storey home rose 11.1 per cent year-over-year to $741,924, and the median price of a bungalow climbed 7.1 per cent to $522,963. During the same period, the median price of a condominium appreciated faster than any other housing type studied, rising 14.3 per cent to $420,823 on a year-over-year basis.

"To prospective homeowners in our largest cities, condominiums represent the last bastion of affordability," said Phil Soper, president and CEO, Royal LePage. "This is especially true for first-time buyers whose purchasing power has been reduced by tightening mortgage regulations."

"Historically, condos have appreciated at a slower pace than detached homes, simply because supply constraints are easier to address, building upward uses much less precious land. For now, demand for those relatively affordable spots in the sky is so high that the trend has been reversed. As builders respond, new projects will come on-stream and condominium price increases will moderate somewhat. However, without hesitation, we can say Canada is now a condo nation, like other advanced economies around the world."

In line with the company's previous Market Survey Forecast, Royal LePage predicts that the price of a home in Canada will increase 4.9 per cent by the end of 2018. In the country's largest markets, Royal LePage expects home price gains in the Greater Montreal Area, Greater Toronto Area and Greater Vancouver to grow by 5.5 per cent, 6.8 per cent and 5.2 per cent, respectively. Meanwhile, by the end of 2018, appreciation in Calgary and Regina is expected to slow slightly on a yearly basis to 2.3 per cent and 0.7 per cent, while Edmonton is forecast to depreciate modestly by 1.5 per cent over the same period. Royal LePage also reported 2018 forecasts for Halifax, Ottawa and Winnipeg, where it foresees home price increases of 2.5 per cent, 3.2 per cent and 4.0 per cent, respectively, in these markets.

To view the chart with aggregated regions and markets visit royallepage.ca/houseprices

For more information see royallepage.ca/mediaroom

Largest Cohort of Millennials Changing Canadian Real Estate, Despite Constraints of Affordability and Mortgage Regulation

‘Peak Millennials’ (aged 25 to 30) to create strong wave of demand

National survey shows while the peak millennial dream to own property is very strong, challenges to homeownership vary across the country

The number of 25-30 year olds is set to grow again

According to the Royal LePage Peak Millennial Survey released, high home values in Canada’s largest urban markets and job uncertainty in other regions mean new strategies and different priorities for ‘peak millennials,[1] a term coined to describe the largest cohort of the millennial demographic and the impact of their potential purchasing power[2].

With every census metropolitan area but Fredericton and all provinces with the exception of Quebec, New Brunswick and Newfoundland adding to their population of 25-30 year olds over the past 5 years,[3] decisions made by peak millennials will be far reaching.  With peak millennials as a group now reaching their late 20s, the number of people aged 25 to 30 is projected to increase 17 per cent in 2021 compared to 2016.[4]

“Whether they choose to buy or rent, peak millennials will inevitably shape the housing market due to their sheer volume,” said Phil Soper, president and CEO, Royal LePage. “We expect demand from this demographic to put additional pressure on entry-level housing and investment properties being used to supplement the limited inventory of purpose-built rental buildings.”

Although the desire to own a home is strong among peak millennials, the challenges they face on the path to homeownership are numerous. The cross-Canada survey conducted by Leger found that 87 per cent of Canadians aged 25 to 30 believe homeownership is a good investment. Yet, while 69 per cent hope to own a home in the next five years, 57 per cent of those surveyed believe they will be able to afford one.

“Facing challenges their baby-boomer parents never encountered, peak millennials are confronted with significant obstacles that vary depending on where they live,” remarked Soper. “While finding employment in our largest urban markets, Toronto and Vancouver, is relatively easy compared to other areas of Canada, buyers face limited inventory and high home values in these regions. Where prices are more affordable, job markets can be more uncertain.”

Often renting or choosing to live at home can be part of a smart saving strategy for future home buyers. Thirty-five per cent of peak millennials surveyed already own a home, while another 50 per cent are renting and a further 14 per cent are living with their parents.

“The pent up demand for housing from millennials is enormous, with only a third of this large demographic currently owning a property and an overwhelming majority desiring to be homeowners,” added Soper.

When looking to purchase a property, 75 per cent of peak millennials surveyed would look to use their personal savings for a down payment, with 37 per cent seeking out alternative means of funding as well, like financial support from their families (25 per cent).

Though 61 per cent of peak millennial respondents across Canada would prefer to buy a detached home, only 36 per cent believe that they will realistically be able to find a property within this market segment. Consequently, many within this age range have adjusted their expectations and have become increasingly open to other property types, provided that they are move-in ready. Over half (52 per cent) of those surveyed would look to the suburbs when purchasing a property, especially when it comes time to raise a family (59 per cent), as the supply of new developments and spacious residences are more abundant in these areas. In addition, 61 per cent stated that they would be willing to move to another city or suburb where property is more affordable.

“While peak millennials are becoming increasingly inventive in their quest for homeownership, careful attention to urban planning could help to alleviate some of their constraints,” said Soper. “By focusing on vertical living, and developing larger, affordable condominiums in urban markets, supply limitations would ease, providing long-term, appealing solutions to young buyers in search of affordable property.”

In addition to high home values, peak millennials also face increasingly stringent mortgage stress test regulations, which push potential buyers to the sidelines, electing to either remain in the rental market to save up enough money for a down payment, or move to more affordable regions.

When asked, 64 per cent of peak millennials currently believe that homes in their area are unaffordable, with a significant proportion of respondents in both British Columbia (83 per cent) and Ontario (72 per cent) asserting that prices are simply too high. Of those that do not believe they will be able to own a home in the next five years, 69 per cent stated that they cannot afford a home in their region or the type of home they want, while roughly a quarter (24 per cent) are unable to qualify for a mortgage.

“Even in our two affordability-challenged provinces, millennials who are prioritizing homeownership can find affordable alternatives to our two largest housing markets according to our Royal LePage National House Price Composite,” said Soper. “In British Columbia, a home in Langley, Kelowna, or Victoria is approximately half the price of a home in Vancouver. In Ontario, cities such as Ottawa, London, and Hamilton offer an affordable alternative to Toronto.”

In total, nearly half (49 per cent) of the peak millennials surveyed believed that the federal government’s new mortgage regulations have impacted the types of property that they can afford, effectively pushing them into highly competitive, lower-priced market segments.

When looking for a home, 53 per cent of peak millennial purchasers across Canada are willing to spend up to $350,000, which would typically buy them a 2.5 bedroom, 1.5 bathroom property nationwide, with 1,272 square feet of living space.[5] Yet, with 58 per cent of respondents having a annual household income of less than $69,000, and only 34 per cent currently tracking to have a sufficient down payment of over 20 per cent to qualify for a mortgage in this price range, the actual logistics of homeownership can be quite difficult.

British Columbia

In British Columbia, high home values have left many purchasers between the ages of 25 and 30 outside of the market looking in. While 86 per cent of peak millennials studied in the province believe that homeownership is a good investment, 83 per cent stated that housing in their region is unaffordable – the highest rate in all of Canada – and the same proportion believe they will not be able to purchase a home within the next five years.

Consequently, when compared to anywhere else in Canada, peak millennials studied within this region tend to be significantly more interested in lower-priced, resilient market segments, with 42 per cent yearning to purchase a condominium or townhome.

With a budget of $350,000, purchasers in British Columbia can typically find a 2.5 bedroom, 1.5 bathroom bungalow with 1,187 sq. ft. of living space. However, in Greater Vancouver, this budget will generally net an 879 sq. ft. condominium with 2.0 bedrooms and 1.5 bathrooms.

“As home prices continue to rise in what is Canada’s most expensive housing market, affordability within the Greater Vancouver continues to be a matter of contention, particularly among the millennial cohort who are most often first-time buyers,” said Adil Dinani, real estate advisor, Royal LePage West Real Estate Services in Vancouver. “As a result, we are seeing extremely strong demand in the condominium and townhouse segments, as younger purchasers look to at the last remaining touch points of affordability in the Greater Vancouver Market.”

The tulips and daffodils are starting to make an appearance in your gardens.

The Spring Real Estate Market in Greater Vancouver is also making a quick appearance.

Here are some tips to get your home "Spring Market" ready.

These are also great tips for Buyers to pay attention to as well.

Hire a landscape crew to spend a day cleaning up the yard, re-shading and trimming trees and evergreens, turning up the garden beds after the Winter and Fall seasons.

Does the trim and front door need painting?       

Remember when these areas look tired, the Buyers assume the inside is tired as well, when they do a drive.                                                                                                                                                                      

Most Buyers do a drive by before viewing the home.

Get the gutters cleaned if they are full of debris.  An inspector may catch this during an inspection.

Have the windows cleaned.

Clean the leaves and cobwebs at your front door, give the front steps a cleanup.

Check to see if the front door needs a good cleaning and perhaps change the door knob and deadbolt.

Wash down all the sundeck, patios and railings.

Place some outdoor furniture to show how the space can be used.  Think of this area as another room.

Empty nesters and Boomers are looking at these spaces.

Do a fresh coat of paint to cover all the scuffs in high traffic areas .

While you are at it check other rooms and areas in the home that can use a little paint touch up as well.

A fresh coat of paint in the teens bedrooms with the funky colours and taking the Thomas the Train wallpaper down in the 14 year olds bedroom could be the first order of business.

Remember neutral colours with always works best.  

Add some colour in the pillows on the bed.

Make your home inviting, most Buyers want to be awed.

Create a comfort setting that makes them have that I can't wait to move in feeling.

Quite often we sound like a broken record, but telling Sellers that cleaning up, de-cluttering and hiring some help, if needed, really can put more $$$ in their pockets.

It is Spring time so please take down the Halloween decoration and Christmas lights.

You may think this will take a lot of time, but if you need help and are a little over whelmed or have a limited amount of time, by hiring the right trades you can get "Spring Market" ready in just a week time.

We have seen it done!

Downsizing has become a popular term for homeowners who find their current home is no longer the right size for them. But as we get older and our lives change, sometimes making the decision to buy a new home is about more than just the size. You may have found yourself newly divorced, or perhaps your grown children have moved out or you want to be closer to the grandkids.

Instead of downsizing, we prefer to help our clients rightsize! Choosing the right home is all about finding a home that adapts to your changing lifestyle.

Should You Rightsize? Questions to Ask Yourself

When making the decision to rightsize, it’s important that you evaluate your lifestyle by asking yourself the following questions:

Is your home equipped for your future? Whether or not you currently have any mobility or health issues, you may want to consider the possibility that this could happen in the future. Ask yourself if your home is adaptable to any changes you may see in your physical health. If you currently own a two-story home, this may mean looking for a bungalow instead.

Does your home require a lot of maintenance? As you get older, you may not want to spend hours every week keeping up with the maintenance on your older home. And if you don’t want to pay someone to do it for you, you should consider moving to a lower-maintenance option like a new build or one with less outdoor space.

Does your home have the space you need? How many bedrooms does your current home have? Is that enough for your needs, or do you require more to accommodate your children and grandchildren when they come to visit?

Does your home have all of the amenities you need? Which amenities are important to you? Do you need a two-car garage, especially if you’re downsizing to one car? Would you like a large dining room that can fit your growing family comfortably at holidays? Do you need a large kitchen if you’re doing less entertaining? Be realistic about the things you want and need.

Do you want to save money on mortgage payments? If you’re recently retired or divorced, it may be important to you to own a home that costs you less money. If you’re no longer able to afford your mortgage payments, or if you want to have more disposable money for things like travel or investments, consider making the move to a less expensive home.

Does your community or neighbourhood fit your needs? If you have grownup children, you may have chosen your neighbourhood based on the quality of its schools and proximity to outdoor recreational places for them to play. If they’ve flown the nest, re-evaluate what it is you want out of your neighbourhood.

Do you have adequate access to transportation?

Retirees often choose to sell their cars, whether it’s out of necessity to save money or if they’ve lost their license due to eyesight or other health issues. If you see this happening in your future, consider how close your home is to other modes of transportation like city buses or whether it’s within walking distance to shops and restaurants.

If you’re ready to rightsize, call Marie and Kim Taverna 

With over 45 years of combined experience in the real estate business, we can help you find the right home for your lifestyle.