Interest, Fees Increase Amount Owed for Property Tax Deferment

If your clients are deferring their property taxes, interest rates and fees will increase the amount they owe.

Who is eligible to defer property taxes

Regular program

Seniors age 55+.
A surviving spouse of any age.
Persons with disabilities.

Families with Children program

Parents, step-parents or anyone financially supporting a child.

Financial Hardship program

This program was only available in 2009 and 2010 (some older clients may still use this program)

Interest charged

Interest is charged on the tax deferment loan from the date the property tax is due or the date your client applies to defer their taxes, whichever is later.

The interest rate charged depends on the tax deferment program. The interest rates are:

set every April 1 and October 1 and arn’t changed outside of these dates;
calculated on the 23rd of each month; and
not compounded.

As inventory increases, price gains relent to begin the fall season

The month-over-month price gains seen earlier this year abated in the Metro Vancouver¹ housing market in September due to a seasonal decline in sales and a modest increase in inventory levels across the region.

Sales

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales² in the region totalled 1,926 in September 2023, a 13.2 per cent increase from the 1,701 sales recorded in September 2022. This was 26.3 per cent below the 10-year seasonal average (2,614).

“A key dynamic we’ve been watching this year has been the reluctance of some homeowners to list their homes given that mortgage rates are the highest they’ve been in over ten years. With fewer listings coming to the market earlier this year than usual, inventory levels remained very low, which led prices to increase throughout the spring and summer months.”

Andrew Lis, REBGV director of economics and data analytics

Metro Vancouver sees seasonal slowdown and price stability in August: REBGV

Hiigher borrowing costs have begun to permeate the Metro Vancouver housing market in predictable ways, according to the August 2023 housing market report from the Real Estate Board of Greater Vancouver (REBGV).

August 2023 saw residential home sales totalling 2,296, marking a 21.4 per cent increase from the same period in 2022 but 13.8 per cent below the 10-year seasonal average, signalling a notable slowdown.

The board is calling it an expected shift in market dynamics, with a cooldown in price gains and sales following the typical seasonal pattern.

“It’s been an interesting spring and summer market, to say the least,” says Andrew Lis, REBGV’s director of economics and data analytics. “Borrowing costs are fluctuating around the highest levels we’ve seen in over ten years, yet Metro Vancouver’s housing market bucked many pundits’ predictions of a major slowdown, instead posting relatively strong sales numbers and year-to-date price gains north of eight per cent, regardless of home type.”

Average rent in Canada hits new record high in August

Canada’s rental market continues to reach record heights, with average asking rents soaring to $2,117 in August. This represents a monthly increase of 1.8 per cent and an annual growth rate of 9.6 per cent according to the latest National Rent Report by Rentals.ca and Urbanation.

Over the past three months, the Canadian rental market has seen a staggering 5.1 per cent increase in asking rents. This translates to a monthly rent increase of over $100.

Shaun Hildebrand, president of Urbanation, notes that, unlike the United States, Canada’s rent inflation shows no signs of cooling down despite rental completions “having reached their highest level in decades.”

He adds, “This is illustrative of the severe rental housing shortage across the country and the magnitude of the impact on rental demand as the population expands by a record pace.”

Strong sales push Metro Vancouver home prices past the rate hike in July

Home prices across all home types in Metro Vancouver1 rose again in July, as strong sales figures continue to push up against low levels of housing inventory in the region.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,455 in July 2023, a 28.9 per cent increase from the 1,904 sales recorded in July 2022. This was 15.6 per cent below the 10-year seasonal average (2,909).

“While sales remain about 15 per cent below the ten-year average, they are also up about 30 per cent year-over-year, which is not insignificant,” Andrew Lis, REBGV’s director of economics and data analytics said. “Looking under the hood of these figures, it’s easy to see why sales are posting such a large year-over-year percentage increase. Last July marked the point when the Bank of Canada announced their ‘super-sized’ increase to the policy rate of one full per cent, catching buyers and sellers off guard, and putting a chill on market activity at that time.”

There were 4,649 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in July 2023. This represents a 17 per cent increase compared to the 3,975 homes listed in July 2022. This was 5.2 per cent below the 10-year seasonal average (4,902).

Continued record levels of immigration may double Canada’s housing supply gap

Canada has experienced a population boom — growing by over 1.2 million in the past 12 months, surpassing the pace seen in previous years. A recent report from TD Economics delves into whether the swing in population has gone too far, too fast.

The surge, referred to as the “great Canadian migration,” is the result of a combination of factors, including increased immigration targets and a significant rise in non-permanent residents (NPRs). While this influx has helped address labour market shortages, it has also led to various challenges in housing, healthcare, infrastructure and overall societal balance.

Bank of Canada Raises Key Interest Rate For The 10th Time Since March 2022

OTTAWA –

The Bank of Canada has raised its policy interest rate again, making the cost of borrowing more expensive.

The 25 basis points hike brings the Bank’s overnight rate to 5 per cent, the highest it’s been since 2001.

In its Monetary Policy Report, the Bank of Canada says the rate increase was necessary to help slow economic growth and reduce core inflation. Three-month rates of core inflation have been higher than the Bank’s expectation hovering around 3.5 per cent to 4 per cent since September 2022.

“The stubbornness of core inflation in Canada suggests that inflation may be more persistent than originally thought,” the Bank’s Monetary Police Report states.

Since the Bank of Canada started raising rates in March 2022 inflation has dropped from a peak of 8.1 per cent last summer to 3.4 per cent in May. This is the 10th interest rate hike since March 2022.

While the Bank acknowledges inflation has been declining due to falling energy prices, easing supply constraints and interest rate hikes, it predicts inflation will remain elevated around 3 per cent over the next year. The Bank says economic growth isn’t slowing as quickly as expected, citing more momentum for demand and stronger than anticipated consumer spending in the first quarter of 2023.

Home Prices Continue To Rise in Metro Vancouver’s Housing Market To Kick Off The summer

July 05, 2023

Continuing the trend that has emerged in the housing market this year, the benchmark price for all home types in Metro Vancouver increased in June as home buyer demand butted up against a limited inventory of homes for sale in the region.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,988 in June 2023, a 21.1 per cent increase from the 2,467 sales recorded in June 2022. This was 8.6 per cent below the 10-year seasonal average (3,269).

“The market continues to outperform expectations across all segments, but the apartment segment showed the most relative strength in June,” Andrew Lis, REBGV’s director of economics and data analytics said. “The benchmark price of apartment homes is almost cresting the peak reached in 2022, while sales of apartments are now above the region’s ten-year seasonal average. This uniquely positions the apartment segment relative to the attached and detached segments where sales remained below the ten-year seasonal averages.”

There were 5,348 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2023. This represents a 1.3 per cent increase compared to the 5,278 homes listed in June 2022. This was 3.1 per cent below the 10-year seasonal average (5,518).

SURPRISING REBOUND: METRO VANCOUVER RESALE MARKET DEFIES EXPECTATIONS IN JUNE

In June, the Metro Vancouver resale market continued to surprise on the upside, with rebounding sales activity and month-over-month benchmark price appreciation. Despite a hike to the overnight interest rate on June 7, which caught many off-guard, buyers are showcasing their long-term confidence in Vancouver real estate. There is still a willingness to enter a complex market that is experiencing impacts from several external sources.

GREATER VANCOUVER

2,988

SALES

————————

-12.4%

MOM%

————————

+21.1%

YOY%

————————

+1.3%

MOM BENCHMARK %

————————

GREATER VANCOUVER RESALE MARKET DEFIES SEASONAL TRENDS WITH A CONTINUED PRICE SURGE

The Greater Vancouver resale market notched its sixth consecutive monthly price increase in June, despite an elevated rate environment and a shift into the Summer season that typically sees sales slow. In particular, condominium prices have now nearly returned to 2022’s peak – showcasing the strength and speed of the recovery thus far.

Residential home sales in the region reached 2,988, a significant 21.1% increase compared to June 2022, but are still 8.6% below the 10-year seasonal average of 3,269 sales. On the supply side, inventory levels remain a key challenge for the market, with 9,990 properties listed for sale in June. This represents a 7.9% decrease compared to the previous year, and a 17.4% drop below the 10-year seasonal average.

This ongoing mismatch between buyer demand and inventory levels is reflected in the sales-to-listings ratio, which was 31.4% for June 2023. Significant upward price pressure is expected to persist at these levels, with further gains in the HPI benchmark price expected in July.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,203,000, a 2.4% decrease from June 2022, but a 1.3% increase from May 2023.

SALES TO LISTING RATIO

31%

ALL PROPERTY TYPES

————————

39%

TOWNHOUSE

————————

39%

CONDO

21%

DETACHED

FRASER VALLEY

1,935

SALES

——————————-

+13.1%

MOM %

——————————-

+51.1%

YOY%

——————————-

+2.1%

MOM BENCHMARK %

——————————-

RISING PRICES AND LOW INVENTORY POINTS TO A HEATED SELLER’S MARKET IN THE FRASER VALLEY

Parallelling many of the themes North of the Fraser, the Fraser Valley real estate market experienced solid sales activity in June, returning to levels consistent with the 10-year monthly average. Overall, the region recorded 1,935 sales, marking a significant 51.1% increase compared to June 2022 and a 13.1% increase compared to May 2023, which contradicts usual summer patterns.

In terms of supply, the FVREB received 3,424 listings in June, reflecting a 2.8% increase compared to the previous year but a 3.1% decrease compared to May 2023. Despite gains in inventory levels in recent months, there still needs to be more active listings to meet current demand levels. Consequently, the sales-to-listings ratio was 37%, up 3% from the previous month, and suggesting a heated seller’s market.

These dynamics have supported the prevailing trend of rising prices in the Fraser Valley. June saw the fifth consecutive price increase of 2023, appreciating 2.1% month-over-month to an overall benchmark price of $1,040,900.

SALES TO LISTING RATIO

33%

ALL PROPERTY TYPES

59%

TOWNHOUSE

46%

CONDO

30%

DETACHED

——————————————————————-

GREATER VICTORIA

705

SALES

————————-

-9.0%

MOM%

————————

+15.2%

YOY%

————————

INVENTORY INCREASE SIGNALS POSITIVE SIGNS IN VICTORIA’S REAL ESTATE MARKET

The Victoria Real Estate market saw steady performance in June, with 705 properties sold, a 15.2% increase from June 2022 but a 6.6% decrease from the previous month. Per VREB Chair Graden Sol, this is a return to a more traditional seasonal sales cycle – with a peak in Spring followed by a reduced but stable Summer market.

Inventory rose by 7% compared to May 2023, with 2,342 active listings, a positive sign in a market that has seen depressed listing activity. Despite this, the overall sales-to-listings ratio remains at an elevated 30.1% – indicating a similarly tight market as seen in the Lower Mainland.

In June, benchmark prices in the region were $1,310,100, a 1.0% increase from the previous month, but remaining 7.0% down year-over-year.

Credit to: MLA Canada Newswire, July 6, 2023

Vancouver And Toronto Are Never Going To Be “Affordable,” So Now What?

PUBLISHED: 2:28 PM JUN 21, 2023

Last month, economists at the Bank of Montreal released a report on Canada’s “affordability conundrum” that delivered some sobering news for anyone paying attention.

Despite “a significant price correction” across most of Canada, affordability remains elusive — and is unlikely to gain traction any time soon. The authors also underscored their long-held position that more housing supply will not be the fix we need to address the housing crisis.

So instead of asking when we might see market housing become affordable again, is it time to ask — at least in certain urban markets — if it’s time to accept high prices as the new normal? If we accept that reality, say some experts, then we can have an honest discussion about the need for subsidized housing and alternative forms of ownership, and acknowledge that any additional market supply will not reduce prices.

After all, even when we do see price drops in Vancouver and Toronto, they are negligible, not near enough to resume the affordability of a decade ago.

The general rule is that housing is affordable when it accounts for no more than one-third of one’s gross income. On June 1, the National Bank of Canada released its quarterly affordability monitor, which showed mortgage payments as a percentage of one’s income had reached nearly 61% nationwide in the first quarter. That’s a drop of 3.2% from the previous quarter, which doesn’t seem like much. And it comes after having reached the most unaffordable level in more than 30 years.