BC Premier Announces Two New Pieces of Housing Legislation
On November 21st, BC’s government proposed new legislation directed to tackle the housing crisis under recently sworn-in Premier David Eby. The proposed legislation is set to eliminate rental and age restrictions in strata buildings throughout BC. As of November 25, 2022 both legislations have been passed.
First, let’s talk about rentals. Currently, there are three main options that a strata building may have in regard to rental bylaws. No rentals allowed, rentals allowed with restrictions (usually a 10% cap), or rentals allowed with no restrictions. This new legislation will create more housing by reducing vacant homes and increasing the number of rental units available. This new legislation will also provide owners with increased flexibility should they be in a position where they need to rent out their home- whether that be for financial or lifestyle reasons. Interest rates are on the rise and more people are working remotely and even in other Cities and Countries.
Rates have risen 6 times in 2022 alone. I am personally seeing clients who had variable rates or who have had to recently refinance, feeling financially stressed. In some cases, my clients are selling off their properties because their payments have increased so much, they no longer want to hold the property. Clients who have purchased in the past year at higher prices on a variable rate are now seeing large increases in their monthly mortgage payments. It would be a great option for people in these situations to be able to rent out their home in the interim as opposed to being forced to sell – assuming where they currently live does not allow for rentals.
On the flip side, I understand that eliminating all rental restrictions could pose challenges for first-time home buyers – yet again. Investors who would have otherwise bypassed buildings with rental restrictions will now be able to purchase investment properties anywhere, increasing buyer demand for strata units.
Age Restriction Changes
The second type of legislation the Premier has implemented targets age-restricted strata buildings. He is not referring to the 45+ or 55+ age-restricted buildings, those will stay in place. What will be eliminated will be the 19+ buildings. The reason is that they feel it is not acceptable that a young couple be asked to move out of their home should they want to have children. Again, I am on board with this new legislation targeting 19+ rules to change and agree that 45+ and 55+ homes should remain. 45 and 55+ homes sell for lower price points, and I can understand that some people over that age group may appreciate quieter living environments at that stage of their life.
Real Estate Update
The Fraser Valley is in a balanced market for the fifth straight month after the strong sellers’ market we saw earlier in the year. The Sales-to-Active ratio for all property types across the Fraser Valley is sitting at 16% meaning 16 out of 100 homes are selling each month. Any percentage between 12-20% indicates a Balanced market.
The Bank of Canada (BOC) made its most recent rate announcement last month on October 26, 2022, bringing the overnight lending rate up to 3.75%. At the beginning of the year, the overnight lending rate was 0.25%. There have now been a total of 6 rate increases this year – something we haven’t experienced since 1981. The BOC is meeting again on December 7, 2022, and it is anticipated that we will see another rate increase of 0.25%.
Bank Of Canada Interest Rate:
As a result, of the now 6 increases we have seen this year alone, prices across the Fraser Valley have fallen most in the detached category (-21%), followed by townhomes (-14%) and lastly, condos (-11%).
Have we hit the Bottom?
While no one can time the market (although they will try), prices can only fall so low before people start jumping back in again. Condos have fallen by the least amount given their generally lower price point. That said, when looking at the median price of condos in the Fraser Valley, they appear to have potentially hit their bottom and are back on the rise:
Sales see an uptick last month
In October, sales across the country increased for the first time since before interest rates started to rise last winter.
Client Appreciation Day at Aldor Acres!
I wanted to thank everyone for coming out to the first annual Fall Client Appreciation Event at Aldor Acres Farm in Langley! It was a great (smokin’ hot) day filled with pumpkins, petting zoo’s, and eating some delicious Mac & Cheese from our very own food truck! Looking forward to next year. Here is the video if you missed out!