February 2017 Market Summary | Real Estate Board of Greater Vancouver
14 Tuesday Mar 2017
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If you’re embarking on the purchase of a resale condo unit, there are a number of factors to take into consideration to ensure you are buying a sound property. Follow these pieces of advice and you can go ahead with peace of mind.
The details of each building inspection depend on the municipality and on the individual building inspector. If you are purchasing a condominium, make sure your inspector specializes in condominium inspections. The building inspector should look at the unit’s plumbing and electrical systems, appliances, and all exposed areas such as balconies, patios, and decks. Depending on your budget, you can also ask the inspector to report on the electrical room, boiler room, roof, parking space or garage, and storage space. Inspectors will also inspect common areas such as hallways, lobby areas, and stairways, if asked to do so. Some building inspectors will also read strata corporation minutes, property disclosure statements, building envelope reports, and engineer reports.
Before you hire a building inspector, ask what services are provided and at what cost. Some inspectors prepare a written inspection report filled with comments and suggestions as well as photos.
Two areas of condominium property that may need repair are the interior common areas and the building envelope. The interior common areas are stairwells, hallways, lobby areas, and garages. A building envelope includes all the building components that separate the indoor conditioned space from the outdoor unconditioned space. Samples of building envelope include the exterior walls, foundations, roof, and outside windows and doors. A building envelope failure means that any or all of these areas have water ingress caused by wind, rain, and air pressure.
A problem building envelope may exist if there are visual signs of wood rot, peeling paint, cracked or missing sealants, water flowing down the sides of the building, pools of water on the decks with no drainage system, windows that are wet on the inside. Further, when reading through the minutes, if there is no regular inspection and preventative maintenance program in place, this may be a sign of potential problems.
“Leaky condo syndrome” has put a serious dent in the home buyer market in some cities, notably Vancouver and Victoria. Your realtor should provide you with a disclosure statement from the seller, minutes, title search, an engineer’s report, and a building envelope report. Have your realtor ask the seller’s agent for a verification of the disclosure statement.
Home buyers must, however, perform their own due diligence with regard to reading the reports and documents provided to them. As the buyer, you must assess whether the property you are interested in may have problems. If English is not your first language, retain a professional translator to help you understand the intricacies of the real estate transaction.
When reading strata corporation minutes, check whether owners or tenants have complained of water coming through windows, balconies, roof, or any exposed part of the building. If you are buying a recently constructed building, you might want to check the developer’s and builder’s credentials and other developments in the community, find out about associations to which they belong, years of experience, certification, track record, and so on.
Further, ask whether the condominium building’s strata council is active in maintaining the building and the property. Is it responding to problems immediately? Is there enough money in the council’s contingency fund to do repairs? What about the management company — is it professional and reliable? Is the building self managed? Are all the issues regarding repairs being dealt with? Find out also how many other units are in the building. The more units in the building, the less you have to pay, if a special assessment were to be made.
A special assessment is the outcome of a specially convened meeting of condominium unit owners who have an extraordinary expense that was not budgeted for in the regular maintenance fees and that cannot be fully covered by the monies in the contingency fund. Special assessments are generally rendered by the condominium corporation to pay for major improvements to the complex such as fixing the roof or repairing the parking garage. They are divided proportionately among the individual units. The amount assessed covers the shortfall and is charged pro rata, in accordance with unit entitlement of the suite of each strata owner.
If a special assessment is forthcoming, you will want to find out who will pay for it. If it is made during the time that the seller is still the owner and the assessment is levied before the completion date, even if the work is to be done after the completion date, it should be stated in the contract of purchase and sale that the seller is responsible for paying the assessment.
If a special assessment is levied after the completion date, including special assessments that are proposed, but not approved, the buyer will pay for this assessment. This detail must be written into the contract of purchase and sale to ensure that there is no misunderstanding between the parties later. If it is known that a special assessment will occur after possession, the unit’s price might be drastically reduced to reflect that the new buyer is taking on the responsibility of paying for the special assessment.
Special insurance coverage is available for special assessments. A condominium endorsement to a leading title insurance company provides coverage for situations in which a special assessment had been contemplated before the policy was issued but the prospective owner was not made aware of it through a status certificate. This type of insurance policy may be a very prudent investment.
Searching for the right condo includes investigating the history and circumstances of that property. Look through the following documents carefully:
❏ Copies of the by-laws/house rules for strata units
❏ Minutes from the last annual general meeting or extraordinary general meeting held since the last annual general meeting
❏ Financial statements (latest approved balance sheet and income statement)
❏ Title search
❏ Property disclosure statement for a condominium
❏ Strata plan
❏ Form “B”
Review these documents carefully, because they provide the history of that building. They may reveal potential problems or past problems such as plumbing leaks, complaints of noise from neighbours, theft, or vandalism. They may also reveal sufficient or inadequate monies in the contingency reserve fund
14 Tuesday Mar 2017
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buyers, commercial, Condo, condominium, developement, development, downtown, dream home, family, first time home buyer, high end, Home, home ownership, homes, house, housing, investment, investors, lower mainland, luxury, mansion, Mortgage, neighborhoods, new construction, ownership, park, property, real-estate, realestate, realtor, realty, seller, seniors, strata, townhome, townhouse, vancouver, yvr
Reluctance amongst Metro Vancouver* home sellers is impacting sale and price activity throughout the region’s housing market.
Residential home sales in the region totalled 2,425 in February 2017. This is a 41.9 per cent decrease from the record 4,172 homes sold in February 2016 and an increase of 59.2 per cent compared to January 2017 when 1,523 homes sold.
Last month’s sales were 7.7 per cent below the 10-year February sales average.
“February home sales were well below the record-breaking activity from one year ago and in line with our long-term historical average for the month,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said. “Limited supply and snowy weather were two factors hampering this activity.”
New listings for detached, attached and apartment properties in Metro Vancouver totalled 3,666 in February 2017. This represents a 36.9 per cent decrease compared to the 5,812 units listed in February 2016 and an 11.4 per cent decrease compared to January 2017 when 4,140 properties were listed.
This is the lowest number of new listings registered in February since 2003.
The total number of properties currently listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver is 7,594, a four per cent increase compared to February 2016 (7,299) and a 4.9 per cent increase compared to January 2017 (7,238).
The region’s sales-to-active listings ratio for February 2017 is 31.9 per cent, a 10-point increase from January. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“While home sales are not happening at the pace we experienced last year, home seller supply is still struggling to keep up with today’s demand. This is why we’ve seen little downward pressure on home prices, particularly in the condominium and townhome markets,” Morrison said.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $906,700. This represents a 2.8 per cent decrease over the past six months and a 1.2 per cent increase compared to January 2017.
Sales of detached properties in February 2017 reached 745, a decrease of 58.1 per cent from the 1,778 detached sales recorded in February 2016. The benchmark price for detached properties is $1,474,200. This represents a 6.5 per cent decrease over the past six months and is unchanged compared to January 2017.
Sales of apartment properties reached 1,275 in February 2017, a decrease of 28.8 per cent compared to the 1,790 sales in February 2016.The benchmark price of an apartment property is $526,300. This represents a 2.3 per cent increase over the past six months and a 2.7 per cent increase compared to January 2017.
Attached property sales in February 2017 totalled 404, a decrease of 33.1 per cent compared to the 604 sales in February 2016. The benchmark price of an attached unit is $675,500. This represents a 0.3 per cent decrease over the past six months and a 1.3 per cent increase compared to January 2017.