Archive for September, 2019

Vancouver pre-sales activity continues its hard deceleration

Monday, September 30th, 2019

Greater Vancouver pre-sales down 77 percent

Ephraim Vecina
Mortgage Broker News

The decline in residential pre-sales in Vancouver was much larger than anticipated, according to a new analysis of MLA Canada figures by real estate information portal Better Dwelling.

Said data indicated that of the new releases in Greater Vancouver last month, only 102 pre-sales have been sold. This represented a sharp 77.8% annual decline, and accompanied a similarly dramatic 75.6% drop in new listings for pre-sales, down to 254 units.

The deceleration stemmed largely from developers responding to slow absorption rates by deferring the release of new supply – which fed into Vancouver’s lower housing starts trend in August.

This came amid a series of late or cancelled developments, which has been reported by CMHC numbers covering that month.

“Compared to the same month last year, both multi-unit and single-detached home starts declined by over 17% in the CMA,” CMHC stated.

Overall, however, “year-to-date starts in the CMA remained fairly stable due to a decline in singles starts which was offset by an increase in the multi-units segment.”

To compare, overall housing sales in August was 2,231 transactions, which were 15.7% more on a year-over-year basis.

“In recent months, home prices have generally been stabilizing in British Columbia and the Prairies, a measure which had been falling until recently,” CREA said.

“The national average price is heavily skewed by sales in the GVA and GTA, two of Canada’s most active and expensive housing markets,” its study added. “Excluding these two markets from calculations cuts more than $100,000 from the national average price, trimming it to less than $393,000 and reducing the year-over-year gain to 2.7%.”

Copyright © 2019 Key Media

Land-assembly investor who made $6.67M on flip ordered to pay realtor $1.15M

Monday, September 30th, 2019

Highline at Metrotown by Thind Properties is a 47-storey tower

Cornelia Naylor
Western Investor

A land-assembly investor who made $6.67 million in a matter of months by assigning a bundle of Burnaby lowrise apartment buildings has been ordered to pay his realtor $1.15 million in outstanding commissions, by the B.C. Supreme Court.

The judge also dismissed the investor’s attempt to have a $300,000 bonus paid to the realtor returned.

Wenxue Wang is a businessman from China with a net worth in the millions of dollars, according to B.C. Supreme Court documents. He got involved in the local real estate market shortly after his first visit to Canada in 2014.

By November 2015, Wang had secured accepted offers on three adjacent lowrise apartment buildings at 6585, 6559 and 6525 Sussex Avenue in Metrotown, Burnaby, for $33.3 million with help from realtor Laura Zhao and her father Raymond Zhao, president of Vancouver Home Park Realty Ltd.

According to evidence presented at a civil trial earlier this year, Wang had signed an exclusive listing agreement with the Zhaos for the future sale of the land assembly, and agreed to pay them a $300,000 bonus for assembling the properties.

Without telling the Zhaos, however, Wang then began working with another agent, Robin Fu, and assigned the purchase of the properties a few months later to a new buyer for $40 million, earning $6.67 million in profit.

The Zhaos said they felt betrayed when they found out Wang was working with Fu.

Raymond Zhao said he had warned Wang they would still be entitled to the commission even if he sold the property rights to the new buyer through Fu.

“Mr. Wang said this was not his view,” states a ruling Wednesday by B.C. Supreme Court Justice Ward Branch.

Raymond Zhao testified it was his impression Wang wanted the various real estate agents to simply “work out the commission issues between themselves.”

No ‘babe in the woods’

Meanwhile, included in the paperwork Wang signed to dispose of the properties was a document deducting $300,000 from his proceeds for the Zhaos’ bonus.

Wang said he didn’t realize the deduction had been made until he picked up his cheque the following day.

When Raymond Zhao called him later that same day to press him about the exclusive listing agreement, Zhao said Wang told him to forget about it or he would sue him over the $300,000.

Wang then posted a general message in a group chat about potential realtor fraud and threatened to release the name of the realtor in one week.

He also made contact with a journalist and a story was published about the Zhaos’ alleged misconduct.

Wang then filed a lawsuit for the return of the $300,000 in July 5, 2016.

Putting himself forward as a Chinese newcomer who could not understand, read or speak English, he claimed the Zhaos had breached their fiduciary duty and taken advantage of him, getting him to sign the bonus agreement under false pretences.

The judge didn’t buy it.

“I find that Mr. Wang was not a ‘babe in the woods,’” he stated. “He is a sophisticated businessman, used to driving hard bargains, and playing people off each other.”

Branch noted that Wang’s claim he had put his full faith and trust in the Zhaos was contradicted by evidence he had consulted a number of other people for supplementary advice or second opinions.

Branch also said the alleged $300,000 fraud “would have been too poorly executed to be believable” and that it made little sense for the Zhaos to perpetrate a fraud that would “almost certainly have been immediately revealed.”

“There is no evidence of an intention to flee the country so that they could retain the benefit of such a bald fraud. $300,000 would not have sustained the two of them for long in any event,” Branch said.

Credibility key

The Zhaos countered Wang’s claim on July 11, 2016, seeking the $1.15 million commission they said was owed them under the exclusive listing agreement and the right to keep the $300,000 as per a bonus agreement signed between the parties.

Branch said Wang and the Zhaos were in “separate evidentiary universes” when it came to the facts of the case, and the claims ultimately came down to credibility.

In the end, he ruled the Zhaos were more credible than Wang and their allegations more consistent with the documentary record and the evidence of independent witnesses.

Branch dismissed Wang’s claim and ruled he owed the Zhaos $1.15 million in outstanding commissions.

New development

The lowrises on the three Sussex properties, meanwhile, have since been demolished to make way for a new, 47-storey mixed-use tower and a 14-storey, non-market-rental apartment building.

The developer, Thind Properties, is working in partnership with the province, City of Burnaby and New Vista Society on the non-market-rental part of the project.

Construction began in April 2019.

Copyright © Western Investor

Toronto’s luxury housing market is soaring, Vancouver to rebound

Friday, September 27th, 2019

Sotheby’s International says solid fundamentals are supporting the market

Steve Randall
REP

The market for homes priced over $1 million is benefitting from the current solid fundamentals in the Canadian economy including the strong labour market.

Sotheby’s International Realty Canada’s 2019 Top-Tier Market Forecast paints a generally positive picture for the market.

The Greater Toronto Area is showing particular strength with growth in sales of luxury homes rising 29% year-over-year in July and August. Gains were seen across property types with $1m+ condo sales up 13%, attached up 45%, and single-family homes up 29%.

Vancouver is set for a rebound this fall, as pent-up demand transfers to sales thanks to more affordable prices. Sales of $1m+ homes gained 5% for condos, 44% for attached, and 32% for single-family homes compared to a year earlier in July and August. That meant an overall 25% gain for Vancouver’s luxury homes activity.

There was little change for Montreal’s top tier with a 1% incremental year-over-year increase over the summer due to a lack of supply. But in the first two weeks of September, there was a 38% year-over-year surge. Inventory is expected to dampen sales this fall.

For Calgary, there is not expected to be much change for the luxury market given the region’s economic conditions.

Copyright © 2019 Key Media Pty Ltd

BC sets out plan to modernize housing approvals

Thursday, September 26th, 2019

Housing report published

Steve Randall
REP

The building approvals process in British Columbia is in need a makeover to make it more efficient.

The Minister of Municipal Affairs and Housing initiated a review of the process at the Union of British Columbia Municipalities (UBCM) convention in 2018 and now the findings of that review are published in a new report.

A common theme of the feedback received was the need to make the approval process more effective and efficient while still ensuring that buildings are safe and healthy.

Meetings have been held across the province to identify what is needed to improve the system for all stakeholders, with the findings sitting within 6 categories:

  • local government application processes;
  • local government approval processes;
  • development finance tools;
  • subdivision;
  • provincial referrals and regulatory requirements; and
  • overarching ideas, such as training and the provision of resources for all participants in the development approvals process.

The report, which is available on the bc.gov.ca website and includes suggestions of how to boost affordable housing and address the challenges of climate change.

It also acknowledges that the expectations of development have changes over the years and the development industry has grown and changed too with competition for lots meaning shorter option periods, creating greater risk.

As a next step, the province will work with local governments and UBCM to improve current development approval processes, including through supporting interested local governments to turn a number of these ideas into pilot projects.

Copyright © 2019 Key Media Pty Ltd

BCREA Market Intelligence Report: Potential Uptake of the First-Time Home Buyer Incentive

Thursday, September 26th, 2019

Potential Uptake of the First-Time Home Buyer Incentive

BCREA

Summary Findings:

  • Evaluating the First-Time Homebuyer Incentive (FTHBI) based on its principle eligibility criteria, the highest potential uptake of the FTHBI would be in more affordable regions located outside of the Lower Mainland. In contrast, the lowest uptake would be in the Lower Mainland and Victoria, accounting for 44 per cent of sales. This suggests that the FTHBI is expected to have limited impact on provincial home sales.
  • Differences in the potential uptake of the FTHBI across the select regions is largely explained by the allowable maximum house price. As such, the price threshold is the most limiting in regions with higher house prices, which tend to be concentrated in the Lower Mainland and Victoria.
  • The maximum income threshold is less important to potential uptake because the share of first-time homebuyers meeting this threshold is relatively comparable across the select regions.

Read The Full Report Here

©BCREA

Chinese house buyers in the US amount to only 1% of the $1.7 Trillion of total sales or down to $10B

Thursday, September 26th, 2019

Chinese buyers dropping out of US housing market

Kimberly Greene
other

Estimates from Chinese real estate website Juwai.com reveal that US home sales to Chinese buyers are likely to drop to an eight-year low by next March, as the trade war between China and the US continues.

Juwai is China’s largest international property website, hosting more than 2.5 million listings both inside and outside the Great Firewall, China’s internet censorship mechanism. The site estimates that US home sales to Chinese buyers will fall to between $10 billion and $12 billion in the year ending March 2020 based on its enquiry and buyer data as well as feedback from industry partners.

While that drop represents less than 1% of the $1.6 trillion worth of US homes sold annually, it is down from the $13.4 billion reported for the year ending in March 2019 by the National Association of Realtors and an even bigger drop from more than $30 billion reported in both 2017 and 2018.

“The Trump administration’s tariffs, aggressive rhetoric, targeting of Chinese graduate students at US universities, and new visa red tape have all hurt Chinese demand,” Juwai’s executive chairman, Georg Chmiel, told Reuters.

Chmiel, a Malaysian-based German tech entrepreneur, said that worries over US visas and the desire to diversify investments had spurred a collapse in sales to Chinese buyers after a five-year surge. The weakening Chinese yuan is also a factor; after a decade of gains against the US dollar, China’s yuan currency has fallen 11% over the last 18 months, capped by a devaluation last month that was widely seen as a political move in the trade war and which added to buyers’ concerns.

“With the trade war going on, it’s easy to imagine a scenario in which you might be forced to sell or your investment might otherwise lose value,” Chmiel said.

For Chinese customers, he added, US properties served as financial investments as well as potential homes for themselves or for their children who were currently studying or working in the United States—or that they hoped would do so in the future.

Luxury homebuilder Toll Brothers and the second-largest builder in the country, Lennar Corp, have already seen the impact. Toll Brothers has noted sluggish sales in California, which is the main target for Chinese buyers and accounts for around 30% of its business. Lennar Corp attributed their soft sales in both California and the western region, which accounts for more than 40% of sales, to the drop in Chinese demand.

Gay Cororaton, a senior economist at the NAR, told Reuters that a slowing Chinese economy and the dollar’s strength were likely to keep pushing down Chinese buying, particularly in prime markets such as California.

“Chinese buyers form a significant portion of international home sales in California, where home prices have been increasing steadily, and that has been one of the factors acting as a deterrent for home purchases, when the yuan has declined,” she said.

Instead, she said that buyers might look for properties in areas that are less expensive than California, such as Texas and Seattle. As a result of this movement, there may be downward pressure on prices in California.

Buyers are looking at other areas, and markets that have strong economies and relative affordability are benefitting from the extra attention.

Dean Jones, principal and owner at Seattle-based brokerage Realogics Sotheby’s International Realty told Reuters that Seattle was “wooing” international buyers with properties that were selling for as little as half the price of real estate in San Francisco or Los Angeles.

Chinese investors are the largest group of foreign homebuyers, and have been since 2013. Canadians were the largest group of foreign investors from 2010-2013, and although they have been the second-largest group in years since, their numbers have also decreased since 2017, when they accounted for $19 billion. Between April 2018 and March 2019, Canadians accounted for $8 billion of the $1.57 trillion in existing home sales.

Copyright © 2019 Key Media Pty Ltd

Where Could a Median-Income Household Afford Real Estate in Canada?

Thursday, September 26th, 2019

What you need to save to buy a home on a median income across Canada

Penelope Graham
other

Housing affordability has long been a hot-button issue across Canada and will take centre stage in the upcoming October Federal Election as a top priority for voters. However, given the vast geographical size of the nation, and its many market nuances, buyers’ ability to purchase a home varies widely depending on local prices and incomes; in fact, the Canadian Real Estate Association has noted a growing gap between price growth in eastern and western Canada, with improved affordability concentrated in the Prairie markets, as well as parts of the Maritimes.

8 of 15 Markets Could Be Considered Affordable

Just how feasible would it be for a household on a median income to purchase real estate in Canada? According to a new study by Zoocasa of 15 major urban centres across the country, such a household would be able to afford the local benchmark-priced home in their region in a total of eight markets, and would be able to save up the required down payment in less than a decade. However, in the remaining seven, a median-income earner wouldn’t qualify for a mortgage large enough to fund their home purchase, and would need to supplement it with a hefty down payment, which, in some urban centres, would require a savings timeline that spans decades, assuming they set aside 20% of their total income each year.

To determine the extent of affordability for median-income households, Zoocasa calculated the maximum mortgage they’d qualify for in each region, assuming a 3% interest rate, 25-year amortization, and that the equivalent of 1% of the total home purchase price would be put toward annual property taxes. An additional $100 per month for heating costs was also factored into the calculation.

Cities Where Median-Income Households Can Best Afford a Home

Similar to CREA’s observations, Zoocasa’s calculations reveal housing affordability is most prevalent in the Prairies, accounting for five of the most affordable markets. In these locales, home buyers with a median income would qualify for a large enough mortgage to purchase the average or benchmark-priced home, so long as they have the required minimum down payment of 5%.

Alternatively, a median income wouldn’t get far in the British Columbia and Ontario real estate markets. In Greater Vancouver, where the benchmark home price costs $993,300, a median-income household earning $72,662 would qualify for a mortgage of only $241,994, leaving a shortfall of $751,306 – a total of 76% of the total purchase price. That would take a household setting aside 20% of their income annually a total of 52 years to save the required funds. Fraser Valley and the Greater Toronto real estate markets round out the steepest three, requiring median-income households to come up with 70% and 63% of total purchase prices of $823,300 and $802,400, respectively – requiring prospective buyers save for 42 and 32 years.

Check out how housing affordability differs for median-income households in the infographic below:

Most Affordable Cities for Median Income Households

1 – Regina

Average home price: $267,900

Median household income (before tax): $84,447

Maximum mortgage: $264,685

Remaining required down payment: $13,395 

Saving timeline: 1 year

2 – Saskatoon

Average home price: $290,800

Median household income (before tax): $82,999

Maximum mortgage: $287,310

Remaining required down payment: $14,450 

Saving timeline: 1 year

3– Winnipeg

Average home price: $292,198

Median household income (before tax): $70,759

Maximum mortgage: $288,695

Remaining required down payment: $15,771 

Saving timeline: 1 year

4 – Halifax-Dartmouth

Average home price: $315,423

Median household income (before tax) $69,522

Maximum mortgage: $311,365

Remaining required down payment: $15,771

Saving timeline: 1 year

5– Edmonton

Average home price: $321,300

Median household income (before tax): $94,447

Maximum mortgage: $317,444

Remaining required down payment: $16,065 

Saving timeline: 1 year

6– Calgary

Average home price: $420,500

Median household income (before tax): $99,583

Maximum mortgage: $415,454

Remaining required down payment: $21,025 

Saving timeline: 1 year

Methodology

Benchmark home prices were used except for Kitchener-Waterloo, London & St. Thomas, Halifax-Dartmouth and Winnipeg where only average prices were available. Home prices were sourced from the Canadian Real Estate Association.

The median total income of households was sourced from Statistics Canada.

The maximum mortgage available was calculated based on the median total income, a mortgage rate of 3% and a 25-year amortization. Property taxes of 1% of the home price and $100/month in heating were assumed for carrying costs. Condo fees, loans and other debts were not factored into the calculation. Calculations were made using the  Ratehub mortgage calculator: https://www.ratehub.ca/mortgage-affordability-calculator.

The minimum down payment required is the difference between the home price and the maximum mortgage available if the down payment was 20% or more of the home price. If the minimum down payment is under 20%, the max mortgage amount includes the mortgage insurance premium. When the maximum mortgage available was greater than 95% of the home price, the required minimum down payment is 5% of the first $500,000 plus 10% of the value between $500,000 and $1,000,000, and the maximum mortgage was adjusted accordingly.

The years to save for the down payment is calculated as the down payment required divided by the amount of income saved per year. The amount of income saved per year is assumed to be 20% of the total median income.

© 2015-2017 Zoocasa Realty Inc.,

Condo Smarts: Walk strata to determine accuracy of plans

Thursday, September 26th, 2019

Walk strata to determine accuracy of plans

Tony Gioventu
The Province

Dear Tony:

We have an unusual problem in our strata corporation. We have several buildings and we are 308 units.

Several owners have approached council with a complaint that their strata fees are not correct and want to know how to change them. We have reviewed our schedule and the registered strata plan, and the comparisons show the fees and calculations are comparable, but the units do not appear to coincide with the size of the strata lots.

If we wish to have our building resurveyed and the measured areas and allocations changed, is that possible under the Strata Property Act? 

Daniella K., Tri-Cities

Dear Daniella:

There is an unusual omission on registered strata plans that I have found results in the strata lot numbers and the actual corresponding unit numbers frequently being incorrect.

When a strata plan is filed in the Land Title Registry, the schedule of unit entitlement, which is the formula used to calculate common expenses and special levies, includes only the strata lot number, the reference sheet number the strata lot is shown on and the schedule of unit entitlement. 

If it is an older plan, it may also show the schedule of interest upon destruction or the schedule of voting rights, if these apply, or that are filed separately. For example, the schedule may show strata lot No. 1, the sheet the unit is shown, which sets the boundaries of the lot, and that sheet often shows only the strata lot number.

Herein lies the problem: frequently, none of these documents lists the unit number on the schedule, such as “suite 101”.  

To ensure the proper fees are charged to the correct units, someone in the early days of the strata corporation had to create a master list showing the strata lot number, the unit number and the schedule of unit entitlement. There may have been a sample of the proposed plan in the disclosure statement by the owner developer, but these are projections only and not the actual registered plan. 

To confirm the corresponding strata lot number, unit number and unit entitlement are being applied, a person needs to physically walk the building with the registered strata plan and floor plans and verify that each of the corresponding units has been identified correctly. Before you assume there was an error with the strata plan, I suggest your council, manager or a consultant walk your floor plans with the documents and verify these corresponding units are correct.

We recently conducted a review with a large strata corporation, where 21 units were mixed up on the schedule. While the differences were small, they were incorrect and over a period of 20 years of operations and special levies, the amounts are significant. At this time, the strata council has corrected the schedule and issued a notice to all owners.

Rely only on documents filed in the Land Title Registry when referring to the registered strata plan, registered bylaws and other amendments filed by your corporation.

If there are errors on a strata plan, it is possible under the Strata Property Act to amend the plan and correct the unit entitlement. It requires a unanimous vote approved at a general meeting and a new survey that is approved by the superintendent of real estate and the registrar of land titles. The approvals are easy; the unanimous vote in your strata corporation would require that all 308 strata lots vote in favour of the change. A daunting task, to say the least, as only 43 owners in person and by proxy showed up at your last annual meeting.

© 2019 Postmedia Network Inc.

Roslyn Ridge 84 single family homes at 23192 113B Avenue Maple Ridge by Morningstar Homes

Thursday, September 26th, 2019

Roslyn Ridge homes will have plenty of room inside and out

Simon Briault
The Province

There are many things to consider when buying a new-build home. The price is a big one. The floor plan is another. Then you have things like construction quality, the reputation of the builder, the fixtures and finishes and the completion time for the development.

But according to Deborah Calahan, vice-president of sales and marketing at Morningstar Homes, there’s one thing that trumps all those considerations in the case of Roslyn Ridge, her company’s latest single-family development in Maple Ridge: location.

“I know location, location, location sounds cliched, but it really is the highlight for this project,” Calahan said. “The homes are exceptional, of course, but when people look for a home, the first consideration is always the location.”

Roslyn Ridge is Morningstar Homes’ fourth project in Maple Ridge, and Calahan said the company has seen people who bought into some of these earlier developments showing an interest in buying again in the area. This is perhaps not surprising, given that the community map for the development lists no fewer than 36 schools, local amenities and shopping centres.

“At Roslyn Ridge, you’ve got super easy access to all the major thoroughfares right at your doorstep, but it really is tucked away in nature,” Calahan said. “Most of the homes back on to greenbelt, so there’s a lot of privacy and green space…I used to think Maple Ridge was far away but it really isn’t, especially now that we have the Golden Ears Bridge.”

The 84 single-family homes at Roslyn Ridge will have either three or four bedrooms and will range in size from 3,065 to 3,215 square feet. Every home includes an unfinished basement, and buyers can pay extra to have their basement finished, either with extra rooms for the main home or as self-contained suites.

Kitchens will have stainless-steel Samsung appliance packages, quartz countertops, huge islands and ceramic backsplashes with accent tiles.

Bathrooms feature dual vanity sinks, soaker tubs in main bathrooms and extra-large showers in master ensuites. There are quartz countertops and ceramic tiles on the floors.

At Roslyn Ridge, prospective buyers can view not only show home, but four.

“What makes us different is that when you go to a Morningstar project, you’re going to see each model of home demonstrated,” Calahan said. “This time, we have four basic plans and all four homes will be on display for people to walk through – it’s not about showing you one house and the others on paper.

“Our approach takes time and it’s expensive to do, but we believe it’s important because that way people can get a feel of what they’ll actually be living in and what suits their needs. When you’re making one of the biggest decisions of your life, it’s important to know that you’ve made the right one.

Roslyn Ridge

What: 84 single-family homes with three or four bedrooms

Where: 23192 113B Avenue Maple Ridge

Residence size and prices: 3,065 to 3,215 square feet; Prices are expected to start in the mid-$800,000 range

Developer: Morningstar Homes

Sales centre: 23192 113B Avenue Maple Ridge

Sales centre hours: Sat — Thurs, noon — 6 p.m.

Sales phone: 604-380-2212

© 2019 Postmedia Network Inc.

Avalanche of apartment buildings for sale hitting Metro Vancouver market

Wednesday, September 25th, 2019

‘Unprecedented’ listings reflect landlord frustration with rent caps, soaring property taxes and regulations

Frank O’Brien
Western Investor

In the past few weeks, landlords have besieged Mark Goodman, a multi-family specialist with Vancouver’s Goodman Commercial Inc., wanting to list their properties for sale, including rare portfolios in Vancouver’s hottest rental neighbourhoods.

“This is unprecedented,” said Goodman, who has been selling rental apartment buildings for 18 years.

He said most of the potential sellers are local families that have held rental property for years. Now, he said, many want to get out of the market, even with Vancouver rents at historic highs and the city’s vacancy rate the lowest in Canada.

“We have 18 active listings now worth more than $250 million,” he said.

Goodman expects to have two dozen within weeks. Current listings include a four-building portfolio in the South Granville area, totalling 114 suites that the longtime owners have listed for the first time.

Each sale is individual, but Goodman contends they are fuelled by an underlying frustration with provincial legislation that caps rent increases at 2.5 per cent this year, combined with soaring property taxes, based on assessments that are now often higher than the buildings could sell for.

For example, BC Assessment has valued an aging 16-suite, walk-up apartment building on Bute Street in Vancouver at more than $10.9 million, with the land alone assessed at $10.3 million.

Goodman has it listed at a discounted price of $9.25 million.

The owner of a 44-suite building on Balmoral Street put it up for sale this month after annual property taxes hit $50,000, based on a spike in its assessed value to just under $19 million resulting from an $850,000 increase in assessed land value from a year earlier.

Because BC Assessment values land at its highest possible use, property taxes for Metro Vancouver landlords have increased as much as 25 per cent in the past year. But Goodman said landlords are restricted in how much they can raise rents and even in how extensively they can renovate their buildings.

He added that some of the older rental apartment buildings — the average age in Vancouver is 61 years — have a majority of long-term tenants who are paying rates well below market value.

Under the City of Vancouver’s new Tenant Relocation and Protection Policy, if a landlord evicts a tenant to make way for substantial renovations, a person who has lived in the apartment for more than 20 years is entitled to a full year of rent, paid for by the landlord. Someone who has rented an apartment for between one and five years is now entitled to four months’ rent.

Goodman said some of the older buildings are “falling apart and unsafe,” but landlords can’t afford to fix them because of the penalties for “renovictions.”

The recent spike in apartment listings marks a sharp reversal from earlier this year.

In 2019’s second quarter, Metro Vancouver rental apartment building sales fell 66.7 per cent to just 13 compared with the same period a year earlier. The dollar value of sales was $152 million, down a staggering 73.9 per cent from 2018’s second quarter, according to the Real Estate Board of Greater Vancouver’s commercial division.

Goodman said the current rush of listings, which other agents are also experiencing, represents a “changing of the guard” in the Metro rental market.

“We are seeing more institutional buyers like REITs [real estate investment trusts] and pension funds.”

But Goodman added that they are looking mostly at new buildings or large portfolios. There is still a local appetite for one-off, older buildings, but he said sellers might have to discount prices.

Goodman added that foreign buyers have expressed interest in Vancouver buildings but are put off by B.C.’s 20 per cent foreign homebuyer tax, which applies to rental apartment buildings.

“The taxes are just crazy. Some owners have simply had enough.”

Copyright © Western Investor