November 2023 Real Estate Board of Greater Vancouver Statistics - Balanced conditions come to…
Should you buy a Pre-Sale Condo in Vancouver in 2023
This is the transcription of the June 26, 2023 webinar entitled “Should you buy a Pre-Sale Condo in Vancouver 2023?”, with Christian Dy and Mike Stewart, Realtor with Oakwyn Realty, providing a comprehensive discussion on the current state of the Vancouver and British Columbia real estate market, with a particular focus on pre-construction condos.
This analysis is crucial for anyone considering the question: “Should You Buy a Pre-Sale Condo in Vancouver in 2023?”
Understanding the 2023 Real Estate Market in Vancouver
Mike Stewart begins by providing an overview of the Vancouver real estate market in 2023. Despite the rising interest rates, he explains that the market remains extremely active. The sales ratio for detached homes, townhouses, and condominiums is high, indicating a seller’s market. This is a crucial point for those considering whether they should buy a pre-sale condo in Vancouver in 2023, as it suggests that the demand for properties is outpacing the supply, leading to a competitive market environment.
Unpacking the Impact of Inflation on the Vancouver Real Estate Market
The hosts then shifted their focus to the impact of inflation on the Vancouver real estate market. They explain that surges in commodity prices drive inflation due to COVID-19 and conflict in Europe, unprecedentedly high levels of immigration in Canada, and the federal and provincial governments spending more than they’re taking in. These factors are pushing real estate prices up, which is an important consideration for potential investors wondering if they should buy a pre-sale condo in Vancouver in 2023.
Addressing the Housing Shortage in British Columbia: Implications for Pre-Sale Condos in 2023
The discussion then turns to the shortage of housing in British Columbia. The hosts highlight that the province must build 570,000 houses by 2030 to restore housing affordability. However, in 2021, BC only built 55,000 homes, indicating a shortfall of about 16,025 new homes. This housing shortage is a significant issue contributing to the high demand and rising prices in the real estate market, which is a key factor to consider when deciding whether to buy a pre-sale condo in Vancouver in 2023.
Should You Buy a Pre-Sale Condo in Vancouver 2023? Weighing the Pros and Cons
One of the key questions addressed in the video is whether buying a pre-sale condo in Vancouver in 2023 is a good investment. The hosts discuss the impact of rising interest rates on real estate investment and suggest that buying a pre-sale condo now and completing it in two to three years could be a good strategy. They predict that interest rates will start going down by Q2 2024. By buying a pre-sale, you “marry the price” but only “date the interest rate,” meaning you can change your financing if rates drop in the future. This strategy could allow investors to secure a property at a lower price and benefit from lower interest rates.
Examining the Rise in Rental Rates in Vancouver: Implications for Pre-Sale Condo Investments in 2023
The hosts also discuss the rise in rental rates in Vancouver, with the average one-bedroom rent increasing by 19.9% yearly. They argue that this increase, coupled with the chronic undersupply of housing, makes investing in pre-sale condos a good opportunity. The rise in rental rates suggests a high demand for rental properties, which could provide a steady income for real estate investors. This is another crucial factor when deciding whether to buy a pre-sale condo in Vancouver in 2023.
Exploring Specific Pre-Sale Opportunities in Vancouver and the Fraser Valley for 2023
Mike Stewart then discusses specific pre-sale opportunities in Vancouver and the Fraser Valley. He recommends properties on or near a SkyTrain, as these are attractive to new immigrants who often move directly to the suburbs. He also mentions some specific developments, such as Curv in Downtown Vancouver and Unity in Langley. These recommendations provide viewers with actionable insights and potential investment opportunities for those considering buying a pre-sale condo in Vancouver in 2023.
Understanding the Benefits of Investing in Real Estate in Vancouver in 2023
The video concludes by discussing the benefits of investing in real estate, including protection against inflation and the potential for high returns. They also discuss the benefits of using a professional rental manager to handle the day-to-day management of the property. This information is valuable for potential investors as it highlights the potential advantages of investing in real estate and provides practical advice for managing rental properties, especially for those considering buying a pre-sale condo in Vancouver in 2023.
Should you buy a Pre-Sale Condo in Vancouver in 2023 – Audience Questions
Here are the questions asked by the audience and the answers provided by the hosts, Mike Stewart and Christian Dy for the Should you buy a Pre-Sale Condo in Vancouver in 2023 webinar:
- Question: “What is the real estate market outlook in general for 2023?” Answer: Mike Stewart explains that the real estate market is still extremely active despite rising rates. The Bank of Canada is raising rates because of this activity. The sales ratio for detached homes, townhouses, and condominiums indicates a seller’s market in Vancouver.
- Question: “Which direction is the real estate market going?” Answer: Mike Stewart mentions that the market is in a seller’s market state, with a high sales ratio indicating that prices are rising.
- Question: “What are the causes of inflation in BC?” Answer: The causes of inflation in BC include surges in commodity prices due to COVID-19, conflict in Europe pushing oil prices up, and high levels of immigration. The federal and provincial governments are also running big deficits, stimulating the economy and causing inflation.
- Question: “What are the solutions to the housing crisis?” Answer: Mike Stewart suggests that the provincial government has measures to increase supply but requires the cities to buy in. If the cities don’t buy in, the province has to intervene, slowing things down. There’s uncertainty about whether we’ll be able to get that supply.
- Question: “What are the forecasts for interest rates?” Answer: Mike Stewart predicts that inflation is on its way down, meaning that interest rates may drop by Q2 2024.
- Question: “Should we invest in real estate, or is it too expensive?” Answer: Mike Stewart recommends investing in pre-sale real estate. He suggests that you can buy a pre-sale now and complete it in two to three years when interest rates are lower.
- Question: “What are some areas and products that you and your team are involved in?” Answer: Mike Stewart mentions that they cover the entire province of British Columbia. They work on anything from downtown Vancouver to the Fraser Valley. He recommends properties on or near a SkyTrain, two to three years out pre-sales, and properties in the suburbs like Surrey and the Tri-Cities.
- Question: “Are any pre-sale condos short-term rental or Airbnb qualified?” Answer: Mike Stewart confirms that pre-sale condos in Kelowna and Penticton and some in Victoria, allow Airbnb and furnished rentals.
- Question: “What are the returns like for studios and one-bedroom condos in the Okanagan?” Answer: Mike Stewart explains that the returns are very high because these places are based on vacation rentals. There are not enough hotels to support all tourists who want to move there, so the cities allow new pre-sales to have Airbnb and furnished rentals.
- Question: “Do you recommend lower floors for investment properties?” Answer: Mike Stewart recommends lower floors for investment properties. He explains that you don’t get a rental premium for being higher up in the building or having a view. For investment properties, he suggests keeping it simple.
FAQ for Buying a Presale Condo in Vancouver
Q: What steps should I take when I’m looking to buy a condo in Vancouver?
A: If you’re looking to buy a condo in Vancouver, start by exploring the resources available for first-time homebuyers and seasoned investors on Mike Stewart’s website. He provides detailed video guides that explain the buying process, as well as advanced tools like Private Client Services for real-time real estate listings1.
Q: Why should I consider buying a pre-sale condo in Vancouver?
A: Buying a pre-sale condo in Vancouver allows you to purchase a new property at today’s prices, often with customization options. You can benefit from potential market appreciation without immediate mortgage payments, property taxes, or maintenance fees2.
Q: What are the financial advantages of buying a pre-sale condo in Vancouver?
A: Pre-sale condos in Vancouver offer the advantage of leverage; with a small deposit, you could secure a property that may appreciate in value before completion. There’s also a possibility of avoiding high-ratio insurance premiums if your deposit and property value increase provide a 20% equity at the time of completion2.
Q: Are there risks involved with buying a pre-sale condo in Vancouver?
A: The pre-sale market is well-regulated in British Columbia, offering protections such as a 7-day rescission period, a deposit held in trust, and a requirement for developers to provide a comprehensive Disclosure Statement. This regulatory environment aims to safeguard buyers’ investments2.
Q: How do I get access to the best real estate listings when looking to buy a condo in Vancouver?
A: Mike Stewart offers access to Private Client Services, a system that uploads new listings well before public websites like Realtor.ca. This service provides detailed information on listings, including sale prices and market status, giving buyers a competitive edge1.
Q: What support does Mike Stewart offer to those looking to buy a condo in Vancouver?
A: As a consistent top producer and recognized top Realtor, Mike Stewart offers personalized advice, detailed buying guides, and access to the latest real estate research tools to assist clients in making informed decisions when they buy a condo in Vancouver1.