Real estate is an attractive investment option for many people, and interest rates play a crucial role in the decision-making process of real estate investments. Interest rates refer to the cost of borrowing money, and they are a crucial factor in determining the affordability of real estate investments. In this blog post, we will discuss the relationship between real estate and interest rates.

The impact of interest rates on real estate is significant. When interest rates are low, it becomes easier and more affordable for individuals to borrow money to invest in real estate. This leads to an increase in demand for real estate, which can cause prices to rise. When interest rates are high, borrowing money becomes more expensive, and this can lead to a decrease in demand for real estate, which can cause prices to fall.

In addition to affecting demand and prices, interest rates also impact the profitability of real estate investments. When interest rates are low, the cost of borrowing money is lower, and this means that the return on investment for real estate is higher. This is because the cost of borrowing is factored into the return on investment calculation. When interest rates are high, the cost of borrowing money is higher, and this can lower the return on investment for real estate.

Another way that interest rates impact real estate investments is through the availability of financing. When interest rates are low, banks and other financial institutions are more likely to lend money for real estate investments. This is because they can earn a higher return on their investments by lending money at lower interest rates. When interest rates are high, banks and other financial institutions may be less likely to lend money for real estate investments, which can limit the availability of financing.

Overall, interest rates play a critical role in the real estate market. They impact demand, prices, profitability, and the availability of financing for real estate investments. It is essential for real estate investors to keep a close eye on interest rates and understand how changes in interest rates can impact their investments.

In conclusion, real estate and interest rates are closely linked, and changes in interest rates can have a significant impact on real estate investments. Investors should keep a close eye on interest rates and be prepared to adjust their investment strategies accordingly.

Written by: 

Adam Struch

604-991-6393

Adamstruch@gmail.com

Welcome to the world of real estate, where market conditions have a significant impact on the industry. The real estate market is one of the most volatile markets in the world, with various factors affecting its trends and fluctuations. In this blog, we will discuss the effects of market conditions on the real estate industry.

Market conditions refer to the overall state of the economy and the factors that influence it. These include interest rates, inflation, unemployment rates, and the stock market. All these factors play a crucial role in the real estate industry, and their impact can either lead to growth or decline in the market.

One of the most significant effects of market conditions on the real estate industry is the impact on property values. When the economy is strong, interest rates are low, and unemployment rates are low, people have more money to invest in real estate, leading to an increase in demand. This increase in demand causes property values to rise, making it a seller's market. On the other hand, when the economy is weak, interest rates are high, and unemployment rates are high, people have less money to invest, leading to a decrease in demand. This decrease in demand causes property values to fall, making it a buyer's market.

Another effect of market conditions on the real estate industry is the impact on the inventory of available properties. In a seller's market, where demand is high, and property values are rising, there is usually a shortage of available properties. This shortage leads to a rise in prices, as buyers compete for the limited properties available. On the other hand, in a buyer's market, where demand is low, and property values are falling, there is usually an oversupply of properties available. This oversupply leads to a drop in prices, as sellers compete to attract buyers.

Market conditions also affect the financing options available to buyers. When interest rates are low, it becomes easier for buyers to obtain financing, as the cost of borrowing is lower. This leads to an increase in demand, as more buyers can afford to purchase properties. On the other hand, when interest rates are high, it becomes more difficult for buyers to obtain financing, as the cost of borrowing is higher. This leads to a decrease in demand, as fewer buyers can afford to purchase properties.

In conclusion, market conditions have a significant impact on the real estate industry. The state of the economy, interest rates, inflation, unemployment rates, and the stock market all play a role in determining the market conditions. These conditions can either lead to growth or decline in the industry, affecting property values, inventory, and financing options. As a real estate investor or homeowner, it is essential to keep an eye on market conditions and adjust your investment strategies accordingly.

Written by: Adam Struch

604-991-6393

Adamstruch@Gmail.com

When it comes to real estate, the old adage “location, location, location” still rings true. Whether you’re buying, selling, or investing in property, the location is one of the most important factors to consider. In this blog post, we’ll explore why location is key in real estate and how it can impact your buying or selling decisions.

1. Property Value: The location of a property can significantly impact its value. Properties in desirable neighborhoods, with good schools, amenities, and low crime rates, tend to command higher prices. On the other hand, properties in less desirable areas may have lower prices. When buying or selling real estate, it’s important to consider the location’s impact on the property’s value.

2. Lifestyle: Location can also play a significant role in the lifestyle of the property owner. For example, if you’re a city dweller who loves nightlife, a property located in a bustling downtown area may be more appealing to you than one in a quiet suburb. If you prefer a more rural lifestyle, a property located in a quiet countryside setting may be more suitable. It’s important to consider the location’s impact on your lifestyle when choosing a property.

3. Accessibility: The location of a property can also impact its accessibility. Properties located near major highways, public transportation, or airports may be more desirable to some buyers or renters. Alternatively, properties located in more remote or isolated areas may be less accessible and less desirable to certain buyers or renters.

4. Future Development: Another factor to consider when evaluating the location of a property is future development. Properties located in areas with upcoming development projects, such as new transportation routes, commercial or residential developments, or infrastructure improvements, may have greater potential for future appreciation in value. Conversely, properties located in areas with declining development may have a negative impact on their value.

5. Resale Value: Finally, the location of a property can also impact its resale value. Properties located in desirable areas with high demand may be easier to sell and may command a higher price than properties located in less desirable areas. It’s important to consider the location’s impact on the property’s resale value when investing in real estate.

In conclusion, location is a crucial factor to consider when buying, selling, or investing in real estate. The location can impact the property’s value, lifestyle, accessibility, future development, and resale value. It’s important to carefully evaluate the location before making any real estate decisions to ensure you’re making a wise investment.

The following datat is the representation of market changes from November through December of 2022.

CHILLIWACK MARKET ANALYSIS:

The Fraser Valley has undergone a pretty drastic correction over the past 7 months. However, no other city has felt these effects like Chilliwack. These changes are due to increasing mortgage rates, more inventory, and seasonal changes. With sales being down by 70% compared to November, it's safe to say that buyers have taken a back seat during the winter months. Chilliwack is the only city in this market update to have a decrease in both sales numbers & sale price.

ABBOTSFORD MARKET ANALYSIS:

The market in Abbotsford has also slowed down, not to the extent of Chilliwack, but to a point where there is a noticeable change. Home sales are down 27% for detached, and 17% for attached, meaning that there are less buyers in the market who are willing to buy in this moment in time. One positive to take away from the decreasing sale numbers, are the increasing average sales price throughout the Fraser Valley.

LANGLEY MARKET ANALYSIS:

Langley has also seen the affects of seasonal changes, showing a decrease of 31% in sales of detached homes, and a decrease of 22% in attached homes. Howvever, like Abbotsford, there was a rsise the sale price on average througout Langley, which is a positive sign heading into the spring. 

If you have any questions about the current market, or what could potentially happen in the future, please don't hesitate to text, call or email me anytime! 

Adam Struch 

604-991-6393

Adamstruch@gmail.com

The B.C. government has commenced the start of the "Buyer's Rescission Period" as of January 3, 2023. Here are some of the important details;

• Buyer's now have a 3 business day grace period after an offer is accepted to rescind their offer. Meaning that if an offer is deemed "accepted" on a Monday, the buyer has until Thursday at 11:59pm to retract their offer.
• This might sound like a positive for the buyer, but keep in mind, this comes at a cost, which is 0.25% of the "accepted offer price". This amount is paid directly to the seller. Payment is based on whether a deposit is being held by a brokerage at the time of retraction.
• It applies to all residential real estate transactions, with a few exceptions (lease land, auctions etc.).
• The rescission clause is unable to be removed in order to help "strengthen an offer".

The BC housing market has seen quite the whirlwind of changes over the past year. A combination of rising interest rates, more inventory, and uncertainty has caused the market to undergo a slight pullback. Now, what does that mean going forward? Well, this is indeed a healthy change, a correction in which the market needed to help keep it healthy. The way in which the market was trending for the past two years was an anomoly created by a severe lack of inventory, and record low interest rates...Long story short, the demand far outweighted the supply. 

The big question now is, "what is going to happen in 2023?". This is the question on everyone's mind who either owns a home, or is thinking of buying one. Nobody really knows what is going to happen over the next few months, but there are some new changes to the industry which will shake it up a bit in early 2023. These changes now include: 

1. CANADA'S FOREIGN BUYER BAN

Starting in January 2023, non-Canadian residents will be banned from buying homes across Canada, through the Prohibition on the Purchase of Residential Property by Non-Canadians Act. This Act prohibits non-citizens and non-permanent residents from purchasing residential property in Canada for two years. 

2. EXPANSION OF BC VACANCY AND SEPCULATION TAX

The B.C. govermnet is extending its speculation and vacancy tax to more communities in January. 

Squamish, Lions Bay, Duncan, North Cowichan, Ladysmith and Lake Cowichan will be added to the list, which already included Metro Vancouver, Greater Victoria, Nanaimo, Lantzville, Abbotsford, Mission, Chilliwack, Kelowna, and West Kelowna.

3. MULTIGENERATIONAL HOME RENOVATION TAX CREDIT

The refundable credit allows families to claim uo to $7,500 to build a secondary unit in their home to accomodate seniors or adults with dissabilities. Starting in the 2023 tax year, the credit will cover 15% of up to $50,000 in renovation and construction costs. 

To qualify, the secondary unit must be a self-contained housing unit with a private entrance, kitchen, bathroom, and sleeping area.

4. B.C. GOVERMENT INTRODUCES "COOLING OFF" PERIOD FOR HOME SALES

On July 21, the provincial government inroduced a "home buyers protection period", which outlines a new regulation that allowds for home buyers to recind their accepted offer on a residential purchase up to three days after signing. 

THIS REGULATION WILL COMMENCE ON JANUARY 1, 2023 - AS PER THE GOVERNMENT

5. UPDATED RESIDENTIAL PROPERTY FLIPPING STANDARDS

Canada's new anti-flipping standards for residential real estate are scheduled to come into effect on January 1, 2023, and are set out to "reduce speculative demand in the market and help to cool down the excessive price growth."

However, the new tax standard will disallow the use of the principal residence exemption to shelter the capital gains realized on the sale of the property, if you have owned it for less than 1 year. This will allow for certain exemptions such as death, disability, separation, and worj relocation. This will make the gain 100% taxable business income. 

If you have any questions about these changes, or about anything real estate, please don't hesitate to reach out at any time!