People have been preaching doom for the expensive Vancouver real estate market. But Vancouver is still getting ratings as one of the best places to live. In fact, despite being expensive, Vancouver has a promising real estate market. With its cleanliness, innovation, and Hollywood activity, Vancouver is an appealing city to live in.
Today, we’ll go over what you need to know before buying property in the Vancouver area.
Keep reading to find out how to make your way into this amazing city!
Demand for Townhouses and Condos
In mid-2016, the prices for detached homes were rising at an alarming pace. As they become more unaffordable, people turned to townhouses and condos.
In early 2017, 68.5% of residential sales in the Vancouver real estate market were townhouses and condos. That’s up over 10% from the year before.
The market can hardly keep up with the increase in demand. Builders are producing new units, but they’re not coming fast enough.
Prices of townhouses and condos are increasing along with demand. Many sales are happening at or above their list price.
If you’re able to get a townhouse or a condo at this time, it’s an asset that will continue to grow in value. Just in the last year, the benchmark price of townhouses rose 10.7%.
Vancouver Real Estate Market Moves Fast
You’ll have to move quickly to get a townhouse or condo in this market. The high demand pushes sales along at an incredible rate.
Some properties sell in as fast as a week or even a day.
You need to find a qualified real estate agent who has constant knowledge of what’s on the market. You want someone informed and connected who knows what’s on the market at any given time.
Narrow down your feature wish list to the exact features you’re looking for. You have to be ready to pounce when you find a condo, and that means recognizing what you want.
They’re also your best bet for tailoring an offer that makes you look the most competitive.
Subject Free Offers
In that fast market, a competitive offer is vital. Some homebuyers are using subject free offers to win, but these offers can be dangerous.
A subject free offer is when you make an offer with no conditions. That means it doesn’t hinge on getting a home inspection or financing coming through.
It also means that the current owner is under no obligation to fix any current damage. Basically, you’re taking the property “as is” with all of the obligations on yourself.
If you get the property with a subject free offer and your lender doesn’t approve your mortgage, you still owe the money on that property. If you can’t come up with the money, you lose your property and the down payment.
Subject free offers, on the other hand, make you really attractive to sellers. They show how committed you are to getting that property.
You can use a subject free offer to be more competitive. But do so with extreme caution.
Consult your real estate agent to fully understand the risks and benefits before you make the offer.
Making a Good Offer Without Subject Free
If you want to avoid subject free risks, there are some other ways to make an attractive offer.
Forget about “low-ball” offers.
This market is essentially a bidding war.
If a seller thinks your offer is too low, they might not even counter offer. Don’t offend them with a low-ball offer.
Get pre-approved. You can have free pre-approval for a mortgage for 90 days.
Pre-approval shows that people are willing to lend you the money necessary for the sale. It shows sellers they won’t have to wait around.
Consider the sellers.
Use anything you can find out about the sellers to your advantage.
If they have kids and need a flexible schedule, offer flexible closing dates. Find out about their sentimental connections to the property, too.
If they’re a married couple trading out a condo for a house where they can have kids, try including a letter about how you’re a married couple trying to find somewhere to start out.
The Vancouver real estate market is full of money-savvy humans. The perfect offer appeals to the money-savvy and the human parts.
Detached Homes Have Cooled Down
The government feared detached home prices were rising too fast in 2016. In August 2016, Vancouver imposed a 15% tax on sales involving foreign buyers.
This made prices and sales drop through the end of 2016 and early 2017. Everyone thought the bubble was bursting, but it surprised everyone when it rebounded.
In May, detached housing prices rebounded, increasing 3.1%. There was also a 27.1% increase in new listings for detached homes.
For buyers, that means there are more homes available at slightly lower prices than 2016. Plus, the value of those homes will continue to increase.
Buying a detached home in the Vancouver real estate market is a calmer process than buying a townhouse or condo right now.
Rental Properties are Popular
Since buying property in the Vancouver real estate market is so pricey right now, many are turning to renting.
If you have the funds to buy a townhouse or condo, you can pay the mortgage with rent. In no time you’ll have a pure income property.
Part of what pushed purchase prices so high was foreigners buying investment properties in Vancouver. As a native Canadian, now you can reap that benefit.
Alternatively, there are plenty of rental properties available if you can’t afford to outright buy a property of your own.
Or, if you’re someone whose property lost value in the last year, consider renting it out instead of flat-out selling it.
Ready to Buy or Sell?
Although the Vancouver real estate market scares some, it’s performing well for most people. Vancouver is an incredible place to live or maintain an investment property.
With the help of a stellar real estate agent at your side, you won’t regret your Vancouver property purchase.
If you have any questions about buying or selling Vancouver property, please contact us. Our team of qualified agents knows how to connect you with the property of your dreams.