Jay Mcinnes

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E#265 - Vancouver Real Estate Hot Topics

E#265 - Vancouver real estate news update: HOT TOPICS!1-bc’s new 60k unit housing target2-no air bnb for you!3-no tax break for trump4-no mortgage defaults  

1)B.C. reveals 60,000-unit housing target for 10 municipalities over 5 years
https://bc.ctvnews.ca/b-c-reveals-60-000-unit-housing-target-for-10-municipalities-1.6578560 PROVINCE ARTICLE:The B.C. government has ordered 10 of the largest municipalities in the province to build more than 60,000 new units of housing over the next five years — or face consequences.Vancouver – 28,900 / 5,780yr INC 7,894 / 1,,578yr below market rentals. B.C. is one of the fastest growing provinces in Canada, with 217,500 new permanent residents expected to arrive in the province between 2023 and 2025, double the historical immigration levels.A report released this month by the Canada Mortgage Housing Corp. found if B.C. continues building homes at the current pace, the province will still be short 610,000 units of housing by 2030. Ravi Kahlon (bc minister of housing) homebuilders have been constrained by growing interest rates, higher building costs and the labour shortage.Kahlon said the housing targets will represent a 38 per cent increase in housing built in these communities.. 58% increase for Vancouver says andy yan an urban planner and director at SFU city program. The threat…???Under the Housing Supply Act, municipalities that meet the targets will be eligible for funding for amenities, such as parks, bike lanes and recreation centres. Those that don’t meet the targets risk being overruled by the province, which has the power to rezone entire neighbourhoods to create more density.Premier David Eby said: “We’re going to work with them every step of the way. If they’re struggling to meet those targets, we’ll identify why and we’ll address it. But to start on day one to say ‘We’re not able to hit those targets’ … is not going to be an answer.”A few layers to this….. Fed Gov Housing accelerator fund (4 billion)Mike Little (mayor of north Vancouver) is critical of the federal housing accelerator fund after the municipality discovered it would be eligible for $9 million to subsidize 3,000 units of new housing. That amounts to $3,000 a unit “which is not going to make it affordable,” he said.The announcement comes as Premier David Eby says "it's pretty clear" the federal government is not yet ready to share its renewed housing strategy or how it will work with British Columbia's plans to take on the provincial housing crisis. THEN:Sean Fraser (Minister of Housing, Infrastructure and Communities of Canada / federal) was set to announce housing accelerator fund deals with Burnaby and Surrey on Tuesday but he said via social media that the announcement was cancelled following a proposed development cost charge increase by Metro Vancouver. Burnaby and Surrey are both members of the Metro Vancouver board. Kahlon said he shares Fraser’s concerns about any measures that would increase costs for developers. Development Cost Charges:Metro Vancouver is increasing its DCCs (Development Cost Charges) on new development. They're phasing in increases starting 2025, and finishing with step 3 in Jan 2027. A Vancouver apartment will see its Metro Vancouver DCCs rise from $6,249 per unit to $20,906. More than tripling in a 3 year span. ** not to mention DCL’s (development cost levies) -       Transit / playgrounds / parks / community centre / childcare / cultural spaces / librariesCAC’s (community amenity contributions) neighbourhood specific to development, social housing NOT TO MENTION: BC HOUSING:BC Housing is a crown corporation. It reports to the Minister of Housing. Key BC Housing responsibilities are to: Develop, manage and administer subsidized housing options.2018 – HOMES FOR BC PLAN - $700,000,000/yr for 10 years2023 – BC BUDGET - REFRESSHED HOUSING PLAN - $1.4 billion/yr for 3 years ($466m/yr)Total 1.16B/yr+ 1.7B affordable plan  Billions floating around in the name of housing and all the governments are doing in miss-allocating and threatening… 
PULL UP ON SCREENDEBT CLOCK – where is the money coming from? Federal / provincialhttps://www.debtclock.caFEDERAL - $1.2TPROVINCIAL BC - $101BHOW TO FIX HOUSING:-       Reduce taxes-       Reduce red-tape & timeline -       Streamline & loosen zoning restrictionsMORE FUEL TO THE FIRECanada witnesses decline in home construction rates, falling below pandemic-era numbershttps://www.ctvnews.ca/canada/canada-witnesses-decline-in-home-construction-rates-falling-below-pandemic-era-numbers-report-1.6591290A recent report from the Canadian Centre for Policy Alternative shows that new housing construction is at a lower level today than it was at the worst point of the COVID-19 pandemic economy shutdown.The report indicates that compared to the first quarter of 2022, new home construction investments are down 17 per cent, renovations have decreased by 21 per cent and ownership transfer costs have fallen by 28 per cent.Why is this? Because most borrow money to do this work…So again, cash is kingWhat can be done?-       Reduce taxes, leave the money with the capable people who are a part of the market and they will use it the most economical way possible while keeping the market going. Extraction of more tax dollars only hurts the market…
2)AIR BNB RULESCONDO OWNER CANT USE HER UNIT AS AN AIR BNB TRIBUNAL RULES:A B.C. woman who bought a condo with plans to use it as an Airbnb part-time has lost her bid for an exemption to the strata's bylaws prohibiting short-term rentals.https://bc.ctvnews.ca/b-c-condo-owner-can-t-use-her-unit-as-an-airbnb-tribunal-rules-1.6591976-       bought a home and there was no air bnb rules when she bought.-       Then they put an air bnb rule in place-       Now she cant.bought the unit in September of 2022, which was before the strata had a bylaw prohibiting short-term rentals, Shortly after the purchase, the City of Vancouver told her that she would need a letter from the strata authorizing the use of the condo as a short-term rental in order to obtain a municipal business licence to do so.Regarding municipal rules: "rentals are legally distinct from (short-term accommodations) such as AirbnB and VRBO."Always remember:-       This is a bylaw that can be voted against at any time and if it does, you are finished.
3)Owners ask B.C. court to overturn vacancy tax on 'bespoke' ex-Trump penthouseshttps://theprovince.com/business/real-estate/bc-court-vacancy-tax-ex-trump-penthouses/wcm/76b21ef2-14e6-48e4-bd4e-73fec5f5c246Tower built in 2017Owners argued in B.C. Supreme Court that the city's tax department erred in taxing them $411,500 for empty homes tax because the penthouse luxury suites took a long time to renovateThree uncompleted luxury suites atop the former Trump Tower should be exempt from Vancouver’s empty home tax of over $400,000 because they’re “bespoke” suites, the owners say in a petition to a B.C. court.But a city tax review found the suites, which the owners said have to be custom built, weren’t developed fast enough and the properties won’t be exempt from paying the tax.West Georgia Holdings (the holbourn group), which owns the downtown building now called Paradox Hotel Vancouver, is asking the B.C. Supreme Court to order the city of Vancouver to refund the $411,500 it paid in 2019 for the 2018 tax year.The city’s empty homes tax, which was introduced in 2017 in an effort to get empty or underutilized properties turned into long-term rental homes — was one per cent of assessed value at first and was raised to three per cent earlier this year.The three Paradox suites were exempted for 2017. But after an audit in 2019, the West Georgia Holdings was sent the $411,500 tax bill. 4)Better dwelling .com

Canadian Mortgage Delinquencies Are Climbing, But Stress Is Greatly Overstated

In Canada, a delinquent mortgage is at least 90 days past due (DPD), reaching the point the lender can pursue remedy. Canadian mortgage rates are climbing and may be creating a little more stress for borrowers. Equifax data reveals mortgage delinquencies have climbed from record lows in Q2 2023. That may present some concerns, until some context is provided. Yes, the delinquency rate is climbing from lows, but the rates remain much lower than they were pre-pandemic, when interest costs were less than half the current level. The national delinquency rate was 0.15% in Q2 2023, flat from the previous quarter and a year prior. It’s 0.01 points higher than the record low, but still nearly half the 0.28% delinquency rate in Q1 2020 (in the before times). In Vancouver, the delinquency rate climbed to 0.09% in Q2 2023, just 0.01 points above the record low. The number of delinquencies would need to rise by 55% to get back to the 0.14% delinquency rate the market saw in Q1 2020. The share of mortgages at least 90 days past due across Canada, and the 3 largest real estate markets.Mass delinquency narrative that will bring prices down is not going to be the case…