Tina Mak
other
Happy New Year! What a 2018 we had! Real Estate turned from hot to cold. Stock Market had bipolar behavior and believe it will carry onto this year as long as the trade war and technology cold war between US & China hasn’t resolved and now Canada is in the middle of it too.
Let me share my view with you on what I think our Vancouver market would look like in 2019. Politics play a huge part in the real estate market in my opinion both locally, nationally and internationally. From China capital control, Canada mortgage stress test, Provincial foreign national tax, empty home tax, speculation tax to the recent Huawei CFO arrest. This is too complicated for us to analysis. Nobody could guess Canada would play a role in this dispute between the world 2 power house countries but unfortunately we are. What is the great thing out of this? Vancouver is being mentioned daily on the global news for good or for bad. Regardless of all the volatility, the storm will pass. It might be difficult at times and a bit too much for the millennial to comprehend, it’ll be behind us sooner than you think.
Let’s look at the facts that makes Vancouver special and real estate remain strong in the long run.
1) Canada economy is doing well. Based on June 2018 statistic chart you see below, Canada unemployment rate has never been this low and BC is the 2nd lowest in the country. December 7th report shown even greater figure, C. is at 4.2%
2) Based on a report published in 2013, Chinese numbers in Vancouver, Toronto to double by 2031.
3) Click recent report on BC’s population passes 5 million. Our population was only 3.292 million back in 1990.
4) Interprovincial Migration: Based on the latest report released on June 5, 2018, BC and ON were the principal beneficiaries of net interprovincial migration in 2015/2016. Read Internal Migration Overview for details
5) International students: Click Canada is home to nearly half a million international students for details. Approximately 150,000 of them are in Vancouver. Increase in International students becoming Canadian Permanent Residents.
6) How does interest rate affecting the market?
Interest rates fluctuate mostly as a result of trying to keep economy stable. Keep prices stable that is, to make sure inflation doesn’t get out of control. Therefore, GOOD NEWS FOR BUYER. Housing price will be stabilized.
7) Best City in the world to live:
Best time to buy?
Well, you might think Tina said this because she would like to make a sales…Well, I don’t blame you to think that way but please read the graph below from the real estate board from 1977 to 2018. I and a handful of my investors bought back in 2008 when majority of my clients decided to hold and wait…Many of them came to me afterwards said I was smart and regretted they didn’t listen to me. I am not smart, I pay attention to the global news and how things affecting Vancouver. History told us the next peak always higher than the previous peak. We can’t time the lowest nor the peak of the market. Warren Buffett quote: Be fearful when others are greedy and greedy when others are fearful”. I only encourage buyer to buy whatever they can afford.
Developers pulling back from developing because of the uncertainty. It will affect the construction start up numbers which means less products will be built. This would turn into pend up demand when the market turns around with less inventory.
Who buys what?
First time buyer and upgrader: Perfect time for you guys. No bidding war & lots of choices.
Americans reside in Canada: Americans might be exempted to pay US tax when they reside and earned their income in Canada. This will encourage the Americans who work in Canada settling in Canada and buy properties. Read New bill could lessen tax woes for Canadian residents with US citizenship.
Investors: Well, this is the only group I’d offer different advise. To be very honest, Vancouver doesn’t provide any return on investment anymore with the high acquisition costs and low to negative returns on investment. If you invest in Vancouver, you can only wait for capital gain. With all the taxes we have in place, our taxation policy is even more complicated than the US now. So my question to you is “Can you think outside the box?” I’m sure you understand what “Diversification” and “Don’t put all your eggs in the same basket”. So, would you consider US?
Is Vancouver a tax haven city?
Not anymore. Click The world’s favorite new tax haven is the United States to understand why. Sounds disbelievable? Well, this became the fact after Canada became one of the 109 countries participating the Common Reporting Standard (CRS) organization in global transparency for tax purposes. Canada started reporting in September 2018. US is the only developed country refused to participate.
Tina Mak P.R.E.C (est.1992) Founding President of Asian Real Estate Association of America, Vancouver Chapter