Vancouver Considers Banning Foreign Buyers

Every Friday we break down the week’s need-to-know real estate news so that you can stay informed, whether you’re crawling local open houses over the weekend, or need some background for that investment property you’ve been hemming and hawing over.

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Vancouver is considering banning foreign buyers as part of a new 10-year real estate strategy

Vancouver is one of the hottest housing markets in Canada—nay, the world. The average home in the Greater Vancouver Area sells for an average of $1 million, a full 12.5 times the same region’s median household income. You may have heard that British Columbia has already introduced a new 15% tax on properties purchased by foreign buyers in an attempt to mediate a market that’s been lit up by outside prospecting. But a city council meeting on Wednesday suggested going a step further and that, among a number of other tactics, heavy restrictions (i.e. a full ban, as Australia and New Zealand have already executed) on foreign buyers might now be in the offing. [Financial Post]

 

Almost half of Canadian mortgages will renew next year

According the Bank of Canada’s quarterly report of the greatest risks to the national banking system (don’t worry, you don’t actually need to read it, the important info is right here), the housing market—specifically mortgages—ranks close to the top. A staggering 47% of mortgage holders will need to renew, but for most—those who have paid off some debt and increased their household income—it will be relatively easy. The concern is over those whose debt has increased, or who have a mortgage of 450% of their income, who will see an increase in monthly payments that, you guessed it, may be tough to pay. [Better Dwelling]

 

In October Americans bought new homes at the fastest pace in a decade

In October, Americans bought new homes at a rate 6.2% higher than the previous month, reflecting both the strengthening economy and the worsening housing shortage. You get one chance to guess what all of that means. Yup, surging prices. Last month saw the highest rate of new-home sales since October 2007—that’s right, just before the Great Recession. [The Los Angeles Times]

 

Builder rebate created to encourage affordable condo developments in Ontario

Ontario municipalities will decide which condo developers get access to a $125 million rebate over five years. The rebate is meant to help developers build condos to be priced at market levels rather than luxury levels, which may prove heaven sent (see our next point). “This would support housing in the missing middle — average people looking for rentals,” says Ontario Housing Minister Peter Milczyn. [Toronto Star]

 

Rental vacancies are at an all-time low in major Canadian cities

Another reason the aforementioned developer rebate is good news: affordable vacancies are so low in big Canadian cities that many people are unable to find rental properties at all. Now many are being pushed out of the core or out of cities altogether (think a suburban and small town push but of the millennial, non-married-with-children, non-vehicle-owning variety). New data released on Tuesday by the Canadian Mortgage and Housing Corporation shows that average rent is up, and that in Toronto the vacancy rate is 1.1%, while in Vancouver it’s a minimal 0.9%. The lesson here: if you have a rental apartment in one of these cities that you can afford, hold onto it until you’re ready to buy. [CBC]

 

Silicon Valley is home to the hottest real estate market in the US

It might seem obvious that San Jose-Sunnyvale-Santa Clara, a neighborhood in Silicon Valley, is the hottest market in the country, but Fort Collins, Colorado and Lancaster, Pennsylvania are numbers two and three respectively. Also on the list? San Diego, Austin and Raleigh, North Carolina. [MarketWatch]

 

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