How to Get Into Real Estate in Vancouver, BC

Rein Vancouver

If you’re looking to get into real estate in Vancouver, BC, there’s one thing that you should know. The housing market hasn’t seen a boom like it did in the past. That’s because of three factors: the economy, the coronavirus outbreak, and a new stress test on mortgages.

In-migration is expected to exceed 30,000 people in 2017

In-migration to Vancouver is expected to surpass 30,000 people in 2017. While the city is already one of the priciest housing markets in North America, the number of immigrants arriving to the metro area will likely reach new heights in 2017.

For years, in-migration has been a major driver of population growth in Vancouver. Since 2010, the number of children born in the United States to immigrant parents has increased by more than seven percent, and a total of nearly 3 million immigrants have come to Canada in recent decades.

In-migration to Canada has been driven by newcomers who have come for the better economic opportunities and cultural diversity offered in the country. The number of immigrants who have chosen to come to Canada for reunification with family has also contributed to continued growth.

Immigrants are a vital source of labor for areas where the demand for workers is high. However, the low levels of migrant inflows are exacerbated by the current labor shortages.

A large amount of immigrants are coming from Latin America and Asia, especially India and China. These countries have seen a dramatic increase in immigration since the mid-1900s. Asians are predicted to surpass Hispanics by 2055, while Whites are projected to make up 20% of the immigrant population by 2065.

During the last decade, Mexico’s immigration rates have dipped, largely due to the Great Recession. As a result, unauthorized immigrants have dwindled.

The Trump administration has made changes to immigration policies. New policy priorities have been introduced to reduce backlogs and ease the process of welcoming immigrants. Many of these policies have not had a clear effect on migration, however. Some have said that the “chilling effects” of these policies are more effective than the actual policies.

Several factors have led to the recent decline in in-migration to the U.S., including the pandemic and processing backlogs. Increased immigration enforcement has also been associated with reduced enrollment in government assistance programs, such as food stamps.

As a result of the changing political environment, the number of refugees who are being admitted to the United States has fallen dramatically. This, along with a sharp decrease in the number of unauthorized immigrants, has led to a reduction in net migration.

Impact of new stress test on housing market

The Office of the Superintendent of Financial Institutions (OSFI) is proposing to tweak the stress test for Canadian mortgages. This could make the process of qualifying for a mortgage much more difficult.

According to CIBC World Markets Inc.’s Chief Economist, Benjamin Tal, this may be a prudent decision. While he is worried about the potential impact on the national economy, he believes that it is worth it to limit regional housing price-growth in Toronto and Vancouver.

A stress test is a way to make sure a mortgage holder is prepared for a possible increase in interest rates. This is to protect borrowers from taking on a mortgage they can’t afford.

The current benchmark rate for the stress test is 4.8 percent. But the new requirement is higher, at 5.25 percent. That means that prospective homebuyers in Toronto, Vancouver, and other popular cities won’t be able to qualify for the average-priced home in a reputable city.

First-time homebuyers are most affected. Those who haven’t saved up a 20% down payment will now be forced to qualify at a higher rate.

The Office of the Superintendent of Financial Institutions is a federal regulator of banking and financial institutions. They announced the new mortgage stress test on May 20.

It is estimated that the stress test will reduce the purchasing power of most first-time homebuyers by about five percent. Homebuyers in Vancouver and Toronto will be most directly affected. In the Greater Toronto Area, the qualification for an average-priced home would be reduced by $42,475; in Winnipeg, by $13,661.

This new requirement will mean that a person with a monthly income of just $100,000 can’t buy a home in these areas. Instead, a household needs to supplement its income between $2,000 and $9,000.

Another effect of the new rule is that the size of the mortgage will shrink. For example, a person buying a condo in the GTA could borrow just 20 per cent of the home’s value. Similarly, a person buying a home in Saskatoon, Saskatchewan, could only afford to borrow 35 per cent of the property‘s value.

Impact of coronavirus outbreak on real estate markets

The Real Estate Investment Network (REIN) released a report on the impact of the new coronavirus on Canadian real estate markets, saying that the effects are expected to be minimal and short-lived. This is a good sign for Canadians interested in investing in real estate.

The report analyzed real estate market trends in five major cities. It found that prices of homes sold during the pandemic were up, but price declines were also seen.

Economists are concerned about the impact of the new coronavirus. Some are worried that the outbreak will have a greater impact on the economy than expected.

The Real Estate Investment Network predicts that the housing market will experience a small lift. However, the impacts are likely to last only a few quarters. A decline in the supply of new homes may continue for a while. There is also the possibility of delays in project delivery. Depending on the supply chain and labour availability, some projects could take four to six months to be completed.

Other concerns involve the impact of travel and tourism. Since the outbreak is not yet known, economists are not sure whether the fear of the virus will have a lasting effect on trade. Nevertheless, the anticipated fear of the disease will affect consumer confidence and the ability of consumers to travel.

The pandemic has already had an impact on GDP, as three million Canadians have lost jobs. It is likely that GDP will slow down as a result. In addition, the outbreak is affecting Canadian industries. Many construction workers are still afraid to return to the workplace, and employers are struggling to find workers.

While the impact of the new coronavirus is likely to be limited, investors should keep an eye on the outbreak. According to REIN, a recovery from the disease will lead to a boost in the real estate market. After a period of modest decline, the market is expected to rebound in 18 to 24 months.

In addition, the government has taken steps to increase demand. Higher tax breaks and other measures have been implemented to encourage Canadians to invest in the housing market.

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