Exponential Mindset Blog

May 2024 Real Estate stats/comments


My comments:

The market has been quiet yet sporadic in some areas. Here are some key factors influencing the real estate market:

1. Surge in Inventory:

According to Budget 2024, the Canadian federal government has increased the taxable portion of capital gains exceeding $250,000, with 66.67% of such gains becoming taxable starting June 25, 2024. Consequently, there was a surge in property listings in March and April as owners aimed to avoid the higher tax. This led to an unusually high inventory, but our data shows that by May, inventory levels had returned to normal.

2. Interest Rate Speculation:

Many buyers have been waiting to see if interest rates would drop, introducing a lot of uncertainty into the market. On June 5, 2024, the long-awaited rate drop finally happened: The Bank of Canada lowered its benchmark interest rate by a quarter-percentage point. This is great news for current borrowers with variable rates. However, Vancouver is never a city that lacks cash flow. Unless homeowners suddenly decide it’s the right time to sell and flood the market with new listings, we don’t believe prices will drop significantly. This speculation has created more options for buyers. Properties with less desirable features are taking longer to sell, while those in prime locations and with recent renovations are attracting more interest. This trend aligns with our emphasis on selecting the best properties for our clients.

Our Property Selection Process:

We are committed to picking properties that will sustain their value over time. We follow strict guidelines to ensure we recommend only the most ideal properties for each individual client. We have developed a comprehensive checklist tailored to each client’s needs. Before moving forward with any property, we conduct thorough research, considering factors such as the safety of structures and retaining walls on steep slopes, the impact of easements on property value, and any litigation or applications on the title. Each property is unique, and these factors can be complex, often unknown to clients until we review the details together.

Renovation Costs:

For those considering renovations, there is some good news. Renovation costs might decrease due to a drop in wood prices. For example, the average price of 3/8″ plywood delivered to British Columbia was $956 in 2021, $818 in 2022, and has fallen to $593 in 2023. Although it takes time for these changes to be reflected in the market, this is promising for budget-conscious buyers. We continue to recommend older houses and suggest simple DIY renovations to enhance their value.

We remain dedicated to providing the best advice and options to our clients in this dynamic market.

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