Recently, the Canadian government introduced the First-Time Home Buyer Incentive (FHSA) to aid Canadians in saving for the down payment on their first home. First-time homebuyers can save up to $40,000 for the down payment, and the contributions made towards the savings account are tax-deductible. Withdrawals made for purchasing the first home are not taxable, and the maximum annual contribution to the account is $8,000 per year. The FHSA is expected to offer $725 million in assistance over the course of five years.
Considering the recent introduction of the new policy, we believe it is an ideal time to revisit the essential do’s and don’ts of purchasing a pre-sale home, especially for first-time homebuyers. Pre-sale homes are a viable option for those who want to be particular about their location and design preferences.
First and foremost, it’s crucial to work with a realtor who specializes in pre-sale homes. A knowledgeable realtor can guide you through the search and closing process, provide valuable insights into promotions and incentives, and paint a better picture of the final project within its pre-construction context.
One common mistake to avoid is viewing homes outside your budget. Determine the maximum loan amount and total monthly payments, factoring in all other costs, including inspections, insurance, move-in fees, property taxes, maintenance, repairs, renovations, strata fees, and utilities. Viewing homes outside your budget could lead to either making a purchase you cannot afford or creating unfair comparisons with the places targeted initially.
Another essential consideration is to research the area to ensure that living in the community is a viable long-term option. Find out how walkable the neighbourhood is, whether public transit is nearby, whether schools are highly rated, whether there is access to amenities such as retail, restaurants, and grocery stores, and whether further development will be down the road.
When choosing a realtor, it’s essential not to base your decision solely on the number of listings they have. Do your due diligence before choosing a realtor. Get a referral from friends or family, read reviews, and go to an open house to gauge compatibility. Also, visit the BC Financial Services Authority’s website to check for any recent license suspensions.
Before making an offer on a pre-sale home, get pre-approved for a mortgage. Pre-approval will help you determine your budget and give you an advantage when competing with other buyers for a pre-sale home. It will also ensure you are ready to move forward once you find the right pre-sale home.
Finally, it’s crucial to take your time and not rush the process. Consider getting legal advice before signing the contract and be sure to read and understand the contract and disclosure statement. Pre-sale homes have their unique considerations in the real estate world, with more decisions to be made, more variables to consider, and a longer timeline from purchase to possession.
By following the do’s and don’ts outlined in this article, you can confidently navigate the process and make an informed decision.
If you have any questions, or you would like to be added to our presale email list, please call Geoff Jarman at 604-313-7280 or fill out the contact form.
To read more local news and updates please check our BLOG PAGE
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Home prices across Metro Vancouver’s1 housing market showed modest increases in March, while new listings remained below long-term historical averages.
Picture source: REBGV
March data also indicates home sales are making a stronger than expected spring showing so far, despite elevated borrowing costs.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,5352 in March 2023, a 42.5 per cent decrease from the 4,405 sales recorded in March 2022, and 28.4 per cent below the 10-year seasonal average (3,540).
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,143,900. This represents a 9.5 per cent decrease over March 2022 and a 1.8 per cent increase compared to February 2023.
“On the pricing side, the spring market is already on track to outpace our 2023 forecast, which anticipated modest price increases of about one to two per cent across all product types. The surprising part of this recent activity is that these price increases are occurring against a backdrop of elevated borrowing costs, below-average sales, and new listing activity that continues to suggest that sellers are awaiting more favorable market conditions.”
Andrew Lis, REBGV director of economics and data analytics
There were 4,317 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2023. This represents a 35.5 per cent decrease compared to the 6,690 homes listed in March 2022, and was 22.3 per cent below the 10-year seasonal average (5,553).
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,617, an 8.1 per cent increase compared to March 2022 (7,970), and 17.3 per cent below the 10-year seasonal average (10,421).
Across all detached, attached and apartment property types, the sales-to-active listings ratio for March 2023 is 30.7 per cent. By property type, the ratio is 23.3 per cent for detached homes, 36.7 per cent for townhomes, and 34.9 per cent for apartments.
Picture source: REBGV
Analysis of historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“If home sellers remain on the sidelines, monthly MLS® sales figures will continue to appear lower than historical averages as we move toward summer,” Lis said. “But it’s important to recognize the chicken-and-egg nature of these statistics. The number of sales in any given month is partially determined by the number of homes that come to market that month, along with the inventory of unsold homes listed in previous months. With fewer homes coming on the market, homes sales will remain lower than we’re accustomed to seeing at this point in the year, almost entirely by definition.”
Sales of detached homes in March 2023 reached 734, a 43.6 per cent decrease from the 1,302 detached sales recorded in March 2022. The benchmark price for detached properties is $1,861,800. This represents an 11.2 per cent decrease from March 2022 and a 2.7 per cent increase compared to February 2023.
Sales of apartment homes reached 1,311 in March 2023, a 43.2 per cent decrease compared to the 2,310 sales in March 2022. The benchmark price of an apartment property is $737,400. This represents a 4.6 per cent decrease from March 2022 and a 0.7 per cent increase compared to February 2023.
Attached home sales in March 2023 totalled 466, a 37.3 per cent decrease compared to the 743 sales in March 2022. The benchmark price of an attached unit is $1,056,400. This represents a 7.8 per cent decrease from March 2022 and a 1.7 per cent increase compared to February 2023.
1. Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.
2. REBGV is now including multifamily and land sales and listings in this monthly report. Previously, we only included detached, attached, and apartment sales, and these additional categories, which typically account for less than one to two per cent of total MLS® activity per month, are being included for completeness in our reporting.
* Areas covered by the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.
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