Vancouver was and perhaps still is a good place for property investments. But there are issues arising. Issues which investors looking to put money into Canada should take note of.
Condominium prices rising swiftly which landed home prices fall
High-rise residential developments are becoming the hot favourites of home buyers and investors. Even as prices of detached-homes fall on the back of higher taxes for foreign buyers.
Both local and non-Canadian property buyers are however snapping up private condominium units, which has in turn seen many flipping their properties. Many buyers are selling their units even before the project is finished. This move meant that buyers will not have to pay Vancouver’s 15% real estate transaction levy. Offshore buyers often go down this route to avoid the foreign buyer tax.
Resale condominium prices have risen 33% since the end of 2015. And prices of units sold pre-construction have nearly doubled since then. Property analysts fear a possible real estate market crash should conditions change suddenly.
Small apartments appeal to first-time buyers and investors
Perhaps a little akin to Singapore’s real estate market a few years back, small apartment units of a more palatable quantum price are appealing to first-time buyers and investors. Many even camp outside sales offices for days to make their purchase.
The number of occupier-ready resale units are however diminishing numbers have fallen to just 84. In 2013, the number stood at 2,217. The pace and extent of property flipping has even compelled some developers to levy a 25% charge on buyers selling their units before completion.