Vancouver’s broad appeal is indisputable. In addition to a rich cultural, arts, and foodie scene, the oceanside city is an outdoor-lover’s paradise. It is consistently ranked amongst the most liveable cities in the world, and not just because of its temperate climate, backdrop of coastal mountains, and high standards for healthy living. The “City of Glass” is a natural choice when it comes to real estate investment. Here’s what to know if you’re thinking of making an out-of-province move to the biggest city in British Columbia:
1. Vancouver Real Estate Values Have Nearly Doubled in the Last 10 Years
While provinces across the nation are heavily influenced by upticks and downturns in the market, Vancouver’s real estate values have not just held steady, but have experienced regular growth over the last 10 years.
As of February 2017, the benchmark price for a Vancouver East property sat at $951,800. That’s a five-year increase of around 58%, and a ten-year increase of 107%. In Vancouver West, that benchmark was at $1,210,000 (+48% in five years, and +92% in ten years).
Investments in real estate across the city’s neighbourhoods are a source of wealth for property owners and signal long term confidence in the local market. A slight downturn in recent sales indicate a levelling off of the market in the coming months, which could result in better opportunities for buyers.
2. Top-Tier Neighbourhoods Have Expanded East
In the past, the luxury real estate market has been dominated by West Vancouver, sections of North Vancouver, and the west side of Vancouver proper. Neighbourhoods like West Point Grey, Kitsilano, Dunbar, Southlands, Kerrisdale, and Arbutus Ridge are host to a mix of impressive character homes and new architectural builds. Properties in these areas remain among Canada’s most valuable real estate.
East Vancouver neighbourhoods, however, are having a real moment. Escalating real estate prices, changing demographic preferences, and a desire for a more eclectic feel have opened up Mount Pleasant, Strathcona, and Riley Park to prospective buyers who are looking to prioritize value and benchmark gains.
3. There May Be Additional Transaction Costs
The Foreign Buyer’s Tax is a 15% tax charged to foreign buyers and the entities representing them when purchasing a property. It applies to residential real estate purchases in the Greater Vancouver Regional District (Anmore, Belcarra, Bowen Island, Burnaby, Coquitlam, Delta, Langley City and Township, Lion’s Bay, Maple Ridge, New Westminster, North Vancouver City and District, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, Surrey, Vancouver, West Vancouver, White Rock and Electoral Area A), and must be paid in addition to the general property transfer tax. This does not affect foreign buyers who live and work in B.C., and who hold a current work permit.
A 1% vacancy tax—the Empty Homes Tax—went into play in the market as of January 2017 to address low vacancy rates for renters. This tax is applied to homes that are left empty for the majority of the year. A status declaration is required from homeowners each year to verify occupancy.
If you’re thinking of buying from outside the country, or plan to purchase a property as an investment instead of a residence, consider these additional taxes when you’re looking at the listing price.
Unsure about whether the Foreign Buyer’s Tax or Empty Homes Tax apply to you? Ask a REALTOR® for more information >
While Vancouver is home to the country’s most expensive housing market, the perks of living in the city are substantial, to say the least. Fresh sea salt air, greenery and flora year-round, and comfortable homes in outstanding neighbourhoods make this metropolis the place to live in the Lower Mainland.