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IMPORTANT CHANGES TO TENANCY RULES IN BC EFFECTIVE JULY 19, 2024

By now you may be aware of some major changes coming to BC’s tenancy’s rules. On July 3, Housing Minister Ravi Kahlon announced on behalf of the BC Government, that its long-awaited online portal which landlords will be forced to use in order to issue a notice to end tenancy under the updated rules is forthcoming. 
 
The following information is critically important to understand for landlords & those purchasing rental property or property with a rental suite.
 
 
The updated rules now state:
 
1) Landlord must issue notices to end tenancy through the online portal which has not yet been launched, but will be launched on July 18th.
 
2) The NOTICE PERIOD TO END TENANCY on the grounds of personal/immediate family use has now been extended from two months to FOUR months. And remember, that’s four full months. In other words, if you were to request vacant possession on July 19th and thereafter, the earliest date possible for vacant possession would be December 1st, 2024. 
 
3) The number of days permitted for a tenant to dispute a notice to end tenancy has been doubled also, from 15 days to 30 days. 
 
For buyers currently purchasing a tenanted property they are planning to move into, you cannot issue a notice to end tenancy until all your Subject Conditions are removed. Plus, you need to ensure that the notice has been issued properly to be deemed received by the tenant. Most property managers will recommend 5 days’ notice to achieve this by registered mail. It is imperative that if you are purchasing a tenanted property, that you really have perhaps just under a week remaining to issue such a notice without risking falling under the new rules. 
 
This is going to cause a number of changes and there will be obvious problems with seeking approvals and rate holds on properties that a buyer may not be able to take possession of for months. We will have to wait and see how institutional lenders react; we expect we will soon see the evolution of some new clauses for real estate contracts.
 
We will keep you informed as we get more information. In the meantime, you can read the government’s statement on the issue at the link below: 

https://news.gov.bc.ca/releases/2024HOUS0115-001044

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The Difference Between an Inspection and an Appraisal


When you decide to buy your first home, you may come across a number of terms and conditions you’re not familiar with. While you may have a general idea of what an inspection is, maybe you’re not sure why you need one or how it’s different from an appraisal. To keep it simple, here’s an explainer of each one and what they mean for you as a homebuyer.

Home Inspection

Once you’re under contract on a home you’d like to buy, getting an inspection is a key part of the process. An inspection gives you a clear idea of the safety and overall condition of the home – which is important for such a big transaction. As a recent Realtor.com article explains:

A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life—one in which you need as much information as possible.”

If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. And don’t worry – you don’t have to go through that process alone. Your real estate agent will be your advocate and negotiate with the seller for you.

Home Appraisal

While the inspection tells you about the current state of the house, an appraisal gives you its value. Bankrate explains:

“When buying or selling a home, an appraisal verifies that the sale price of the home is in line with fair market value. This ensures the homebuyer doesn’t pay more than the home is worth, and the mortgage lender doesn’t lend more than it is worth.”

Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal protects you from overpaying and the bank from lending you more than the home is worth.

And if there’s ever any confusion or discrepancy between the appraisal and the agreed-upon price in your contract, your trusted real estate professional will help you navigate any additional negotiations to try to close the gap.

Bottom Line

The inspection and the appraisal are different but equally important steps when buying a home – and you don’t need to manage them by yourself. Connect with an agent today so you have expert guidance from start to finish.

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Despite affordability challenges, a quarter of Canadian renters plan to get a foot on the property ladder in the next two years

27% of renters say they are planning to buy a property within the next two years

As affordability challenges and housing supply shortages persist in Canada’s real estate market, renters may be feeling that their transition from tenant to homeowner is taking longer than expected. For the one third of Canadians who rent, many are still eager to own a home in the near future, despite the hurdles of high borrowing costs, large down payments and tight competition in the market.

According to a recent Royal LePage survey, conducted by Hill & Knowlton,1 27% of Canadians who currently rent their home say they plan to purchase a property in the next two years. Among those aged 18 to 34, that figure jumps to 40%. Meanwhile, 69% of renters say they do not plan to buy a home in the near future. Among them, more than half (54%) do not feel their income will be sufficient to afford a property in the area where they wish to live (61% among respondents aged 18 to 34).   

“The rental sector is not immune to the significant affordability challenges stemming from Canada’s acute housing shortage. High mortgage rates have made it difficult for many to purchase a home, forcing some to move into, or remain longer than planned, in the rental market,” said Phil Soper, president and chief executive officer, Royal LePage. “Despite a short-lived decline in prices and demand for rental units during the height of the COVID-19 pandemic, the available supply of rental properties in most major markets remains ultra low.” 

Nearly a third of renters contemplated home purchase before signing their lease

Before signing or renewing their current lease, 29% of Canadian renters say they considered purchasing a property. Among them, 41% say the lack of a sufficient down payment led to their decision to rent instead. 

When asked about the motivating factors behind their decision to continue renting rather than buy, approximately one third of respondents said they were waiting for interest rates (33%) and property prices (30%) to decrease. Twenty-two per cent said they are continuing to rent while saving for a down payment, and 20% said they did not qualify for a mortgage. Respondents were able to select more than one answer. 

“While a third of Canadian adults are currently renting, and there are families who are perfectly content doing so, the desire for home ownership remains strong among a large portion of this segment of the population. Our latest research reveals that a material number of renters wish to transition to home ownership. Understandably, the greatest barrier to entry is the ability to drum up the initial capital for a down payment,” continued Soper.

For some Canadians, rental prices eat up 50% of take home pay 

Nearly four in ten Canadian renters (36%) spend up to 30% of their net income on monthly rental costs. Meanwhile, roughly the same amount of renters (37%) spend between 31 and 50% of their income on rent, and 16% spend more than 50%. In Canada’s most expensive housing markets, Vancouver and Toronto, the proportion of renters who spend more than half of their income on rental costs increases to 27% and 19%, respectively. That figure dips to 10% in Montreal. 

According to the latest Rental Market Report by the Canadian Mortgage and Housing Corporation (CMHC), the average rent nationally for a two-bedroom unit in October 2023 was 8.0% higher than a year prior.2 Vacancy rates sat at 1.5% and 0.9%, respectively, for purpose-built rental buildings and condominium apartments. 

“From coast to coast, Canadians are struggling with housing affordability in the wake of one of the most aggressive interest rate hike campaigns in history. Across many regions, rental demand vastly exceeds supply, making affordable housing a challenge. The housing industry and government must collaborate on innovative solutions to increase inventory, including rentals, and support those most impacted by these escalating market conditions,” concluded Soper.

Here are a few highlights from the Royal LePage 2024 Canadian Renters Report:

  • Of renters who say they plan to buy within the next two years, half (50%) say they will have a down payment of less than 20%

  • When asked how they will come up with their down payment, 53% of respondents said they will use savings accumulated over the years

  • 44% of renters planning to purchase in the next two years believe they will be able to afford a home in their current city of residence, while 37% do not 

  • In British Columbia, 25% of renters spend more than half of their net income on monthly rental costs, well above the national average of 16%

PRESS RELEASE           DATA CHART

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Buyers reboot purchase plans in Q1 to get ahead of rising home prices, anticipated interest rate cuts

Spring is normally the most active period for Canada’s real estate market – the arrival of warmer weather triggers an increase in buying and selling activity across the country. In 2024, the traditionally-busy spring market kicked off early and is facing additional pressure, as homebuyer hopefuls who have been sitting on the sidelines jump back into the market ahead of anticipated interest rate cuts, and the tight competition and higher home prices that will inevitably follow. 

Royal LePage® is forecasting that the aggregate1 price of a home in Canada will increase 9.0% in the fourth quarter of 2024, compared to the same period last year. Based on stronger-than-expected first quarter results, the previous forecast has been upgraded nationally and in most major markets.

“Consistent with our previous forecast, the market did reach a critical tipping point in the first quarter of 2024, when home prices bottomed out and began to appreciate again. Clearly, more and more buyers are motivated by the need to get ahead of rising home prices, rather than adopting the strategy of waiting for mortgage rates to fall,” said Phil Soper, president and CEO, Royal LePage. 

How did home prices perform in Q1?

According to the Royal LePage House Price Survey, the aggregate price of a home in Canada increased 4.3% year over year to $812,100 in the first quarter of 2024. On a quarter-over-quarter basis, the national aggregate home price increased 2.9%, an indication that sidelined buyers are rebooting their real estate purchase plans ahead of expected interest rate cuts, as predicted in January. 

When broken out by housing type, the national median price of a single-family detached home increased 4.5% year over year to $845,300, while the median price of a condominium increased 3.5% year over year to $591,900. 

Toronto and Montreal home price appreciation to outpace Calgary

The aggregate price of a home in the greater regions of Toronto and Montreal are forecast to increase 10.0% and 8.5% year over year, respectively, in the fourth quarter of 2024, outpacing price gains in the city of Calgary, which was previously expected to see the greatest increase in home values this year. 

“Last year, while property values dipped in most markets across the country, the Calgary real estate market bucked the trend and continued to record home price gains. While activity levels remain strong and prices continue to rise in Alberta, our research indicates that buyer demand, relative to available inventory, is strongest in the two largest urban centres in the country. We now expect Toronto and Montreal to log the highest home price appreciation this year,” added Soper. 

This sustained price appreciation is expected to close the gap between the country’s two most expensive real estate markets, Toronto and Vancouver. While Vancouver remains the nation’s most expensive market today, Royal LePage predicts that the aggregate price of a home in the GTA will surpass Greater Vancouver in the second half of 2024.

Busy spring, busier fall, on the cards for 2024

Within the first months of the new year, the Canadian housing market has already recorded solid price appreciation and higher sales activity. Starting in July of 2023, the Bank of Canada has held rates steady through six review periods. This has prompted many homebuyers to come off of the sidelines in advance of what they expect will be a more competitive spring market that will drive home prices higher. 

“Given the strong start to 2024, the cadence of the market for the balance of the year points to a normally busy spring market that will lead into an uncomfortably busy fall. It is clear we are rapidly transitioning away from a buyers’ market and back to an environment where the seller has the upper hand,” noted Soper. 

Read Royal LePage’s first quarter release for national and regional insights. 

First quarter press release highlights:

  • Among major regions, Calgary recorded highest year-over-year aggregate price appreciation (9.7%) for the second consecutive quarter; increased 1.9% on a quarterly basis

  • 89% of regions in the report recorded quarterly price appreciation in the first three months of the year, ahead of the traditionally busy spring market period

  • Royal LePage expects home prices in the Greater Toronto Area will surpass those in Greater Vancouver in 2024 

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8 new housing policies announced in the 2024 federal budget

On Tuesday, April 16th, the Canadian federal government unveiled the 2024 budget. The annual fiscal announcement detailed dozens of new and ongoing initiatives aimed at creating new housing, along with policies targeted at making renting and home ownership more affordable for Canadians.

Here are eight standout housing policies announced in this year’s budget:

Canadian Renters’ Bill of Rights

More Canadians are renting for longer periods of time before they transition into home ownership. The 2024 budget announced several measures intended to more effectively protect tenants and strengthen their path to buying real estate.

Budget 2024 announced the creation of the Canadian Renters’ Bill of Rights, which proposes a nationwide standard lease agreement, and would require landlords to disclose rental price history on properties. Through the Canadian Mortgage Charter, the Budget also calls on banks and lenders to allow tenants to report their rental payment history to credit bureaus in order to better their credit scores, thereby strengthening their future mortgage applications.

Additionally, $15 million over five years has been allocated to a Tenant Protection Fund, which will provide legal support to tenants.

Funding for the construction of new homes

The federal government is promising billions of dollars in spending towards the construction of new housing.

The 2024 budget unveiled the Canada Builds initiative, which will enable the country’s Apartment Construction Loan Program to partner with provincial governments in order to build more rental accommodation. Starting next year, the program will receive $15 billion in additional funding for the creation of 30,000 new homes, topping up the program’s current funding allocation to over $55 billion for a total of 131,000 units, set to be built by 2031.

The Canadian Housing and Mortgage Corporation’s (CMHC) Housing Accelerator Fund will also receive $400 million in financial support to build 12,000 new housing units.

Infrastructure Canada will receive $6 billion over the next decade towards the Canada Housing Infrastructure Fund, which will support the creation of water and waste infrastructure needed for new communities. $100 million over two years will also be dedicated to Employment and Social Development Canada to support apprenticeship and skilled-trade programs that address the workforce shortage needed to build housing.

30-year mortgage amortizations for first-time buyers of new homes

Through the Canadian Mortgage Charter, the 2024 budget announced that starting on August 1st, first-time buyers purchasing a newly-constructed home can access 30-year mortgage amortizations, a product that has previously only been available to those with a down payment of at least 20%.

In practice, a longer amortization period would allow borrowers to pay off their mortgage over an extended timeline, thereby reducing their monthly payments.

Amendments to the Home Buyers’ Plan

Saving for a down payment is one of the largest hurdles new homebuyers face. To make it easier to access funds for a home purchase, Budget 2024 unveiled an amendment to the withdrawal limit on the Home Buyers’ Plan, which has been increased from $35,000 to $60,000 as of April 16th.

Support for single-family home suites

To encourage the creation of secondary housing units, the 2024 budget announced $409.6 million over four years towards a Canada Secondary Suite Loan Program, run by the CMHC. This will enable homeowners to borrow up to $40,000 in low-interest loans towards the cost of adding a secondary suite to their homes, which can be used for multi-generational living purposes or as a source of rental income.

Increase to the inclusion rate on capital gains above $250,000

Effective June 25th, Budget 2024 proposes an increase to the inclusion rate on capital gains realized annually above $250,000 by individuals, corporations and trusts from one-half to two-thirds, by amending the Income Tax Act. This would include the sale of secondary residences and investment properties.

Currently, only 50% of capital gains are taxable. The 2024 budget would increase the inclusion rate to 66% on capital gains above $250,000. The sale of principal residences will continue to be exempt from capital gains tax.

New funds for post-war housing catalog

In December 2023, the federal government announced that it would be modernizing its post-war home design catalog, providing standardized home blueprints that would accelerate the creation of much-needed housing. The 2024 budget unveiled $11.6 million towards the development of 50 home designs, which includes plans for row homes, fourplexes, sixplexes, accessory units and modular homes.

Conversion of public lands into housing

Land scarcity is one of the main barriers to the creation of new housing. The federal government intends to utilize public lands in order to free up space where new housing can be built, with a goal of building 250,000 new homes by 2031 under the Public Lands for Homes Plan. In Budget 2024, the government announced plans to lease public land to builders in order to lower capital costs, and review the federal lands portfolio to identify more usable lands for housing. The budget also outlines plans to reduce the footprint of federal office buildings, and convert these spaces into housing.

Over the next three years, $5 million will be allocated to the Canada Lands Company to support initiatives to build properties on public lands.

Want to know more about the 2024 federal budget? You can read the full budget announcement here.


Source: ROYALLEPAGE.CA

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New Property Transfer Tax (PTT) Rules - New Thresholds for Exemption
Currently, the First Time Home Buyer (FTHB) full exemption applies to properties with a fair market value (FMV) of less than $500,000, with a partial exemption for properties with a FMV of $500,000 to $525,000. 

As of April 1st, 2024, the FTHB exemption will apply to properties in a different way, and this is great news for many buyers. 


For properties with a FMV of less than $835,000, PTT is not payable on the first $500,000, but payable on the difference between the FMV and $500,000.

For example, if the FMV of the property is $700,000, PTT paid would be 2% of $200,000 ($700,000 less $500,000).

Not paying PTT on the first $500,000 saves buyers a total of $8,000

If the property has a FMV between $835,000 and $860,000, then a partial exemption applies, the details of which are not yet confirmed by the BC government. 

If the FMV of the property is over $860,000, then there is no FTHB exemption.




Increased Threshold for Newly Built Home Exemption (Presales)

Effective April 1, 2024, the FMV threshold to claim the Newly Built Home Exemption will be increased from $750,000 to $1,100,000.

For example, a purchase at $1.1M would save $20,000 in PTT!

Just keep in mind that presales are subject to 5% GST and the total purchase price (GST included) is what is considered for the exemption.

A partial exemption is also available for properties with a FMV under $1,150,000. The details of the exemption are also yet to be confirmed by the BC government.

Properties with a FMV of greater than $1,150,000 will not be able to claim the Newly Built Home Exemption.
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How to create a safe and stylish space: A home design guide for new parents

When young families choose furniture and décor for their home, there’s a lot more to consider than just the aesthetic of the pieces. When little hands and feet are a part of the equation, furniture safety and durability is a top priority for parents.

Fortunately, you don’t have to compromise style for safety – achieving both is entirely possible. By making informed choices and focusing on design durability, functionality and style, you can create a space that is both visually appealing and family-friendly.

Let’s explore four key home styling considerations for new parents:

Durability

When choosing furniture and décor, it’s essential that it can withstand life with kids. Even if your little one is not yet on their feet, it won’t be long before they’re exploring – and this can get messy.

To prepare for the inevitable, select furniture with the understanding that children will come into contact with it, often with sticky hands or colouring tools. Consider protective sprays for fabrics, opt for colours that camouflage stains, and be open to second-hand pieces until your children are old enough to handle your furniture with care. Additionally, choose a non-toxic washable paint that can withstand the test of little fingerprints and other signs of childhood on your walls.

Functionality

Embrace a non-traditional mindset when arranging your living spaces. Before investing in bedroom furniture for a new baby, consider where you and your child will be most comfortable. You might find that a mattress on the floor is the unexpected choice for the first few years of your child’s life. 

Also be mindful of multi-functional pieces instead of furniture and décor with a single purpose. An example of this is securing a baby change mat to a dresser instead of purchasing a change table that, unless repurposed, will be impractical when diaper days are over.

When deciding on a safe space for your child to play, consider creating small, dedicated corners for toys and activities in different rooms as opposed to a designated playroom. This will allow your child to be within your sight as they play, and any extra space you have leftover in the home can be utilized by the whole family.

Don’t forget to squeeze in storage solutions wherever possible to maintain an organized and functional home.

Safety

As a parent, keeping your children safe is your top priority. Here are some general safety precautions you can take to make your home safer:

  • Secure shelves, dressers, and any other large pieces of furniture to the wall to prevent them from tipping over.
  • Place hazardous items like cleaning solutions and sharp objects out of reach or in cabinets or drawers secured with child locks.
  • Be cautious around sharp edges and corners – opt for protective covers, or if possible, furniture with rounded edges.
  • Ensure all cables, strings and ties are properly secured to prevent strangulation. 
  • Lock all windows and doors to prevent accidents.

Style

From modern to boho, traditional or eclectic, your personal style can still shine through in your home when you have kids. Children’s toys, clothing, furniture and décor have come a long way over the past decade, which means you can find items that mimic your tastes while fulfilling their purpose as durable, functional pieces. 

Choose storage solutions for toys, games and other kids activities that match your interior aesthetic. Utilize baskets and containers that lend to the style of your space rather than the traditional bright and colourful pallets often associated with kids’ design.

Something style-conscious parents can get excited about: the washable rug! There are several companies now offering rugs of all sizes and designs that can be thrown right into the washing machine – a DREAM when you’ve got little ones running around. No need to cry over spilled milk… Or anything else for that matter!

Creating a safe, stylish and practical space that aligns with your family’s taste is achievable. With a thoughtful blend of durability, functionality and style, you can welcome a baby into a house that feels like home.



Royal LePage

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Leasehold Land & Freehold Land: What's the difference
We often get the question about the difference between Leasehold Land & Freehold Land.  While the majority of purchases in Greater Vancouver are "Freehold" there are Leasehold properties also (Land owned by Indigenous peoples, Cities, municipalities, others), so it's important to know the difference. Let's break it down:
 
Freehold Land:
   - When you own freehold land, you have absolute ownership of both the land and any buildings or structures on it.
   - You have the right to use, occupy, and sell the land as you wish, subject to any local regulations or restrictions.
   - Freehold ownership typically lasts indefinitely and can be passed down through generations.
 
Leasehold Land:
   - Leasehold land involves leasing the land from the freehold owner for a specific period, usually long-term but with a defined end date.
   - As a leaseholder, you have the right to use the land for the duration of the lease, but you don't own it outright.
   - The terms of the lease, including rent payments and any restrictions on use, are outlined in a lease agreement between the leaseholder and the freehold owner.
   - Leasehold properties often involve paying ground rent to the freehold owner and may have additional charges or conditions outlined in the lease.
 
In essence, with freehold land, you own the land outright, while with leasehold land, you have the right to use the land for a specified period under the terms of a lease agreement.

Want to know more about specific Leasehold Land on the North Shore, how they stack up in value compared to Freehold property and how they react to market changes?  Send us a message for all the details!
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Stay informed: New legislation agents should know about in 2024

In 2024, several policies impacting buyers, sellers, renters and real estate professionals in Canada will come into effect. Below you will find a breakdown of new and updated industry and consumer policies that may affect both your business and your clients.

REALTOR® Cooperation Policy 

CREA (Canadian Real Estate Association)’s newly-effective REALTOR® Cooperation Policy, created by the Realtor Code’s Duty of Cooperation (Article 30), aims to enhance professionalism and collaboration across the industry. The policy mandates Realtors to list residential properties on an MLS® (Multiple Listing Service) within three days of public marketing, excluding direct communication with affiliated parties. Sellers must also be informed of the benefits of MLS marketing, with written confirmation required if they choose otherwise. 

Penalties: Enforced by local boards, penalties for non-compliance include license suspension and access restrictions:

  • Suspending, restricting or terminating a realtor’s license to use and display CREA’s trademarks (for example, REALTOR® or MLS®)
  • Suspending, restricting or terminating a realtor’s access to CREA services including such things as CREA WEBForms®, the REALTOR.ca DDF® and REALTOR.ca
  • Imposing any other restrictions that CREA determines is appropriate

Exemptions: The policy excludes new construction, commercial properties and rentals. 

You can read more about this policy on CREA’s website here.

Short-term Rental Restrictions

In November, 2023, the Government of Canada unveiled its 2023 Fall Economic Statement, which details new tax, spending and inventory-boosting measures. This includes new efforts to incentivise short-term rental operators to return properties to the long-term housing market. Going forward, income tax deductions will be denied in cases where short-term rental owners are not compliant with provincial or municipal licensing, permitting or registration requirements. This applies to all expenses incurred on or after January 1st, 2024.

You can read more details from the 2023 Fall Economic Statement here

Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyer Ban)

In addition to the new federal legislation above, the Prohibition on the Purchase of Residential Property by Non-Canadians Act, otherwise known as the Foreign Buyer Ban, was introduced last year and remains in effect until December 31, 2024. 

You can find more details about this policy here.

New Short-term Rental Housing By-laws

In late 2023, the provincial government introduced the Short-Term Rental Accommodations Act which imposes stricter regulations and enforcement on short-term rental housing. As of May 1st, 2024, the Act will require short-term rental hosts to display a valid business licence number on their listing in regions where a licence is required by the local government. Short-term rentals will be limited to the host’s principal residence, plus one secondary suite or accessory dwelling unit, in select communities. 

Additionally, protections for ‘non-conforming use of property’ will no longer apply to short-term rentals. Later in the year, the British Columbia government will implement a short-term rental registry, and require rental platforms to share data with the Province. 

Expanded Speculation and Vacancy Tax

The province has expanded its existing speculation and vacancy tax laws to 13 new communities, including Penticton, Courtenay and Kamloops. Homeowners in applicable regions will be required to declare how they used their property in 2024 for the first time in January, 2025. 

Introduced in 2018, the speculation and vacancy tax is 2% for individuals who don’t pay the majority of their taxes in Canada, or 0.5% for Canadian citizens or permanent residents who pay the majority of their taxes in the country. 

Updated Zoning Rules

New zoning laws are under consideration to deliver more small-scale, multi-unit housing across British Columbia. Under the proposed legislation, one secondary suite or one laneway home will be permitted in all communities throughout the province. In most areas within municipalities of more than 5,000 people, by-laws will also be adapted to allow three to four units on lots currently zoned exclusively for single-family or duplex residential, and permit six units on larger lots close to transit stops with frequent service.

Additionally, the new zoning rules would require municipalities to update community plans and zoning by-laws on a regular basis to ensure that there is enough housing for current and future residents. Changes to zoning by-laws will roll out across 2024. 

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What is a Strata Depreciation Report?

A strata depreciation report is a thorough written, and sometimes illustrated, physical assessment of the condition of a strata property that identifies current and future issues that need to be addressed with associated cost estimates. According to provincial regulations, a depreciation report must include an inventory and evaluation of a building’s:

* Structure,

* Exterior (such as roofs, roof decks, doors, windows and skylights),

* Systems (such as electrical, heating, plumbing, fire protection and security); and

* Common amenities (such as fitness room, pool, bike lockers etc).

* Collectively, the items listed above are known as "common property" as they are elements that are shared by all owners of individual units within the building. 


Why is a Strata Depreciation Report important?

It helps strata corporations plan for the repair, replacement and renewal of common property and assets, especially those that require considerable outlay of money, such as roofs, windows, elevators, roads or utilities.

They are also an important part of a Buyer’s due diligence as they provide insight into future repair and maintenance needs and their associated costs.  It is in your best interest as a Buyer to thoroughly review strata depreciation reports and seek legal or other expert advice before making a buying decision. 

Buyers should also understand that a depreciation report covers common property as part of a strata building and not individual units within that building. As such, be sure to get an independent inspection for the specific unit you are considering purchasing.


What isn’t covered in a Strata Depreciation Report?

Depreciation reports don’t normally cover every item in the common property or routine repairs and maintenance.  Buyers should still do their own due diligence in having the property inspected as well as obtaining other strata documents, including but not limited to bylaws, rules, regulations, meeting minutes, strata plans, summary of insurance coverages etc. To obtain additional information, Realtors will typically request other strata documents in addition to the depreciation report.

Are Strata Depreciation Reports mandatory in BC?

In most cases, yes.

Under B.C.’s Strata Property Act and Regulations, strata corporations must obtain a depreciation report unless the strata consists of fewer than 5 strata lots. The Regulations also require the report to be updated every three years.


Yet - Strata Corporations can opt out …

­­Strata corporations in BC can waive their requirement to obtain a depreciation report, or defer the renewal of one, if 75% of the owners pass an annual vote in favour. Voting to waive a depreciation report can backfire however, with the long-term costs of unanticipated repairs and maintenance needs often far outweighing any short-term savings gained from opting out. In addition, prospective buyers are sometimes reluctant to invest in stratas that don’t have a long-range maintenance plan in place and as important - lenders and insurers may consider stratas without depreciation reports greater risks.


Information above - Courtesy of BCREA

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Royal LePage’s Q4 2023 Home Price Update and Market Forecast

The Royal LePage Home Price Update and Market Forecast, distributed each quarter, includes price data and insights from experts in 63 real estate markets across the country, as well as national and regional forecasts.

Despite a continued slowdown in market activity in the later months of 2023, Royal LePage expects sidelined buyers to re-engage in the first quarter of 2024 ahead of expected rate cuts by the Bank of Canada.

“I believe the narrative suggesting that the housing market will rebound only when the Bank of Canada lowers rates misses the mark,” said Phil Soper, president and CEO of Royal LePage. “The recovery will begin when consumers have confidence the home they buy today will not be worth less tomorrow. We see that tipping point occurring in the first quarter, before the highly anticipated easing of the Bank of Canada’s key lending rate.”

Key highlights from the 2024 Market Survey Forecast:

  • National aggregate home price increased 4.3% year over year in Q4 2023; decreased 1.7% quarter over quarter
  • Aggregate home price in greater regions of Toronto, Montreal and Vancouver posted gains of 5.1%, 4.1% and 2.7% year over year, respectively, in final quarter of 2023
  • Among report’s major regions, Calgary recorded highest year over year price appreciation (10.7%); only major region to post quarterly price gains in Q4 2023 (1.5% over Q3)
  • 81% of regional markets posted a quarter-over-quarter decline
  • Approximately 2.2 million mortgages in Canada will be renewing over the next two years, most at a much higher interest rate
  • National aggregate home price expected to rise 5.5% year over year in Q4 of 2024
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Purchasing a home is an exhilarating milestone, but it also comes with its fair share of complexities and potential risks. As a homebuyer, you need to be well-informed and protected throughout the process to avoid financial pitfalls and ensure a successful transaction. This is where contingencies and the expertise of a reliable realtor play a crucial role. In this blog, we will explore the significance of appraisal, inspection, and financing contingencies, and shed light on how a realtor can be your guiding light in making the most substantial investment of your life.


  1. Appraisal Contingency: Shielding Your Financial Interests

An appraisal contingency is a vital clause in your offer that protects you financially if the appraised value of the home differs significantly from the agreed-upon purchase price. Appraisals are essential to lenders as they determine the home's fair market value, ensuring that you do not overpay for the property. If the appraisal comes in lower than expected, the contingency gives you the option to renegotiate the price or, in severe cases, walk away from the deal without losing your earnest money deposit.


2. Inspection Contingency: Uncovering Potential Issues

The inspection contingency provides you with the opportunity to thoroughly assess the condition of the home before finalizing the purchase. A professional home inspection can uncover hidden defects, structural issues, or necessary repairs that you may not have noticed during your initial visit. Armed with this information, you can negotiate with the seller to address the problems, lower the sale price, or choose to back out of the deal altogether, retrieving your earnest money deposit.


3. Financing Contingency: Ensuring Funding is Secured

Securing financing is a crucial aspect of the homebuying process. A financing contingency safeguards you and your earnest money deposit in case you encounter unexpected obstacles while seeking a mortgage. If, for any reason, your loan application is rejected or you cannot secure the necessary financing, this contingency allows you to exit the contract without financial repercussions.


The Indispensable Role of a Realtor

Navigating the complexities of a real estate transaction can be overwhelming, especially for first-time homebuyers. This is where the expertise of a seasoned realtor becomes invaluable. Here's why you need a realtor by your side:

  1. Knowledge and Expertise: Realtors possess comprehensive knowledge of the local market and current real estate trends. They can help you find the right properties that align with your needs and budget, maximizing your chances of making a sound investment.

  2. Negotiation Skills: Negotiating with sellers can be a daunting task, but realtors are skilled negotiators. They advocate for your best interests, ensuring you get the best possible deal while handling all the intricate details of the negotiation process.

  3. Contingency Protection: Your realtor will ensure that all necessary contingencies are included in your offer, safeguarding your interests throughout the transaction. They will guide you through any potential challenges that may arise, giving you peace of mind during the process.


Conclusion

Purchasing a home is a monumental decision, and you deserve to embark on this journey with confidence and peace of mind. Contingencies are your safety net, providing you with the flexibility to navigate unforeseen circumstances during the homebuying process. Additionally, having a reputable realtor by your side is essential to ensure that your best interests are protected, and you are well-informed at every step.

Remember, the right realtor will not only assist you in finding your dream home but will also be your trusted advisor throughout the negotiation and transaction process. With the guidance of a reliable realtor and well-thought-out contingencies, you can make the most substantial investment of your life with confidence and excitement. Happy house hunting!

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