property division after a divorce

Divorcing? What You Need to Know About Property Division After Divorce

Know Your Rights About Splitting Property After Separation

How is a house divided in a divorce? That’s the question we’ll answer in this blog post as well as many other questions about splitting assets after separation. 

Everyone feels the need to find that special someone to share their life with. Deep and meaningful connections, whether it’s intimate or platonic, are what make the world a better place. You want to share your world with your partner, and they want to share it back.

Hopefully, most people will get a happily-ever-after. However, sometimes relationships simply don’t work out.

According to Statistics Canada, over 42,000 divorces were granted in Canada in 2020. 

If you and your spouse decide that it’s best to divorce or separate, how do you divide assets?

More specifically, how and when can you divide property?

When Can You Divide Your Property After a Separation?

According to the Government of Canada, there’s a significant difference between separation and divorce. 

A separation is when a married or common-law couple decides to stop living together. It’s important to note that if you’re married, separation doesn’t officially end the marriage. 

A divorce is when the marriage is ended through official court proceedings.

How you can divide your marital property depends on whether you and your spouse separate, or divorce. 

Before you start division of property, you and your spouse will need to figure out what your family property is.

What is Family Property?

Family property is everything you and your spouse own on the date you separate. 

The exception here is excluded property (more on that later). 

Family property not only means your family home, but includes:

  • Other land, houses, or condos
  • RRSPs
  • Investments
  • Bank accounts
  • Insurance policies
  • Pensions
  • Businesses
  • Cars
  • Pets

Even if only one spouse’s name is on any of these, the law says it’s still family property. This especially means your family home. 

If there is any property you or your spouse owned before you got together that counts as excluded property.

What is Excluded Property in a Divorce?

Excluded property is any property you or your spouse owned before you both decided to get married or live together in a common-law relationship.

That means it is not family property, and you don’t have to equally split the value. 

However, like most things, there’s a catch. 

If the excluded property increases in value over the course of living together, that increase counts as family property. 

That means only the increased value of your excluded property can be divided equally after separation. 

In other words, if you owned a property before you started living together with your spouse, when you separate, you won’t have to give them an equal share of its total value.

You will need to give them half of the increase in the house’s value since you started living together. 

The excluded property also includes property that you sold to buy a new family property. 

Tracing the value of the excluded property can be complicated, so it’s best to hire a professional for this task. 

What else is excluded property? Click here for a complete list of what defines the family property and excluded property.

How Does Family Property & Division of Assets Work?

After you and your spouse decide to end your relationship, you’ll need to divide the property you share. 

The law calls you and your partner spouses if you are married, or living common-law for at least 2 years. 

If you’re married, you may need to share the debts you owe, so it’s a good idea to act quickly when dividing your finances. 

In British Columbia, whether you were married or common-law, you must apply to divide property within 2 years after you get an order for divorce or from the date you separated. If you wait too long, you may lose your right to your share of the family property. 

When dividing property in a marriage, you and your spouse will equally divide the value of any property you bought during the marriage. You and your spouse will also equally divide any increase in value of the family property you bought into the marriage. 

However, there are some exceptions to this rule.

In British Columbia, if a couple wants to divide their family property or debt differently, they can opt-out of the property and debt division rules by making an amicable agreement. 

When dividing property in a common-law relationship, the property typically stays with the spouse who bought it. If the other spouse helped buy and take care of the property, they may have a right to part of it. 

If you and your spouse can’t come to an agreement on division of property, you may have to go to court. 

Whether you and your spouse are married or common-law, you’ll both have to agree to a separation agreement.

What Is A Separation Agreement?

A separation agreement is a legal, written record of how a couple has settled their issues related to their separation. 

While you don’t need a separation agreement to separate, it’s much faster and less expensive than going to court. 

Hiring a mediator or arbitrator can help you and your former spouse reach an amicable agreement. 

This may include:

  • How you’ll divide property and debts
  • Living arrangements
  • Spousal support
  • Custody of children
  • Child support payments

While you can prepare a separation agreement on your own, it’s a good idea to get legal advice from a divorce lawyer or a notary to help with the process.

Each partner should talk to a lawyer before signing to make sure both parties fully understand the separation agreement. 

Before you decide to split your family property, it’s important to get it professionally appraised.

Appraise Your Property Before Property Division 

When it comes to the division of assets in a divorce or separation, we at D.Fritz Appraisals understand how important it is to receive a fast and accurate appraisal of your family property.

Based in Victoria, BC and with over 40 years of experience, our team of professionals will find the fair market value of your home, so you can focus on moving forward. 

Contact us today!

investment property appraisals

Home Appraisals for Rental Properties

Investment Property Appraisals – What You Need to Know

Let’s take a look at investment property appraisals because it doesn’t look like our gold rush of a real estate market is slowing down anytime soon. Perhaps your family has outgrown your home and are thinking of moving but would like to keep your current place of residence.

Mortgages, property taxes, and utilities aren’t going to get much cheaper, so what’s a viable solution? 

If you are planning on moving or looking for more passive income, it might be time to rent out your property.

While having a new stream of cash flow can be exciting, you’ll also be taking on the role of a landlord

However, before you take on this exciting challenge, you’ll need a rental property appraisal first.

At D. Fritz Appraisals Inc., our team offers the most accurate, fair value assessments for rental properties. 

Why Rent Out Your Property?

Typically, when people sell their homes, they use the equity they have built in one house and use it on the next. But that’s not always the case.

Some homeowners will convert their primary residence to an investment property, and it’s usually done for one of two reasons.

  1. A homeowner might do this because the housing market is struggling, and they’re concerned their home’s value has dropped. By renting it out instead of selling it, they can hold on to the property and wait for the value to rise again. 
  2. Another reason to rent out your home is to increase your monthly income. By converting your primary residence to an investment property, your family can enjoy the perks of having their mortgage payments paid for.

But what’s the difference between a primary residence and investment property?

What Makes a Primary Residence or Investment Property?

Whether it’s a house or an apartment, you can only own one primary residence at a time.

If you are buying a home as a primary residence, you may be able to receive lower interest rates and lower down payments. Depending on where you live, you might be able to apply for tax benefits. 

An investment property is purely to generate income. If you are purchasing a home or apartment as an investment property, you may need a larger down payment and pay a higher interest rate.

Whether you are converting a primary residence to a rental property or purchasing an investment property, it can have its own set of challenges. 

What to Consider Before Renting Out Your Real Estate

One of the most important things to consider is your mortgage agreement. Typically, when you sign a mortgage, you must live in your primary residence for 1 to 2 years. If enough time has passed and you want to convert your primary residence to an investment property, you are free to do so.  

When your primary residence changes over to an investment property, your taxes are likely to change. You can benefit from a wide variety of deductions on your taxes, utilities, and much more.

Finally, you’ll need to speak to your insurance company. Switching from your current house insurance to rental insurance will likely increase your rates. This covers your building, but not your renters’ belongings – they would have to get their own renter’s insurance. 

With all of these things to consider, it’s time to get your investment property appraised. But how do professionals find an accurate assessment?

How to Value Your Real Estate Rental Property

With income from investment properties at an all-time high, rentals can offer an increasing source of revenue for your family.

While there isn’t just one solution to appraise your property, a combination of different methods can help you find an accurate assessment.

Here are some of the more common ways to value your rental property:

  • The Sales Comparison Approach

SCA is one of the most popular ways of valuing residential real estate. This involves a comparison of similar homes that have been sold or rented locally over a certain period. 

  • The Capital Asset Pricing Model

CAPM is a more comprehensive valuation model. This details the potential return of investment from your rental property and whether or not it’s viable. 

  • The Income Approach

This indicates the potential income for your rental property, compared to the initial investment. This approach is commonly used for commercial real estate investing. 

  • Gross Rent Multiplier Approach

GRM will value a rental property based on the amount an investor can potentially collect every year. While it’s easy to measure whether or not a property is worth the investment, this won’t take taxes, insurance, utilities, and other expenses into account. 

  • The Cost Approach

This model combines the land value and the depreciated value of any home improvements. While this approach can value newer homes reliably, it may not work for older properties. 

For more in-depth details about the appraisal process, feel free to contact us with any questions you may have. 

Deducting Taxable Income 

One of the benefits of owning a rental property is claiming tax deductions for any expenses related to the property. You can claim rental income and additional expenses on “Form T776”. 

The most common rental expenses can include:

  • Home insurance
  • Heat
  • Hydro
  • Water
  • Mortgage insurance

Claiming these expenses will save you money in tax deductions, but why not take it a step further? As long as it’s concerning your rental property, you can claim so much more.

You can deduct additional expenses such as:

  • Advertising your rental property
  • Bank fees and interest
  • Property taxes
  • Cable
  • Office expenses
  • Travel if your rental is in a different municipality
  • Repairs and maintenance
  • Salaries and management

Some expenses can be deducted in full if it’s spent to maintain the rental property. However, if your rental is a part of your primary residence, you can only claim a certain percentage.

Much like anything home-related, there are always stipulations on how much you can deduct. Check out rental expenses you can deduct from the Canada Revenue site to learn more. 

Get Your Fair Value Rental Assessment Today

While there is no one way to appraise the value of a rental property, it’s important to look at the different valuation methods before making an investment decision. 

By learning these valuation concepts and researching how to save on expenses, you could be well on your way to getting into the real estate investment market.

At D. Fritz Appraisals Inc., our team has over 40 years of experience appraising homes, offering the most precise assessment according to the market today. Our appraisers are certified, professionally insured, and committed to the appraisal process every step of the way.

 Contact us today for a professional appraisal of your rental property. 

Drones for Real Estate Photography

Drones for Real Estate Photography and Appraisals

The Rise of Drones in the Canadian Real Estate Industry

Using drones for real estate photography is a topic that drew a lot of chatter in the early 2010’s as a hotly debated topic among real estate agents. First used to highlight luxury properties with state-of-the art video listings on real estate websites, the use of aerial drone photography and videography for real estate transactions is now commonplace.

Drones used for real estate photography can provide detailed data for everyone involved in the purchase or sale of a home or business. Seeing how useful aerial photography has been in creating real estate listings, real estate appraisers are now also beginning to see the value in adding drone technology to their toolkits. 

With commercial drone use now legal in Canada, it’s worth considering whether drone photography and videography is also helpful for real estate appraisal inspections.

What is Drone Photography?

If you’re unfamiliar, drone photography is sometimes used to highlight the features of the surrounding landscape, neighbourhood and home exterior. This new perspective often helps real estate professionals show the property from a new perspective, making the most of its surroundings. Also known as UAS (Unmanned Aerial Systems), drones help build an impressive amount of information for real estate marketing and valuation. 

Drones for Real Estate Photography and Appraisals – Four Key Benefits:

  • Drones Can Capture a High Level of Detail

Drones can take sharp and clear photos, which are usually a much higher resolution than satellite images. The aerial footage allows for a higher level of detail, which lets an appraiser zero in on any potential issues to be addressed. 

Drones can also capture amazing shots that other forms of aerial photography just don’t cover. Traditional aircraft like helicopters can’t fly in unpredictable weather, which is where drones come to the rescue. They’re also not restricted by the same height limits as normal planes, allowing them to get better shots.

  • Drones Can Provide the Most Recent and Accurate View of a Property

When combined with old-fashioned boots on the ground, the use of a drone for real estate appraisals can upgrade a property inspection. Drones give you the ability to gather data that may not have been accessible before, due to conditions of the landscape, like steep or inaccessible terrain.

Land development, landscaping, paths, roads, parks, schools and other amenities nearby all contribute to a real estate appraisal. With the help of a drone, appraisers and other industry professionals can see all these features in an instant.

*What About Satellite Imagery?

Google Maps and other satellite imagery providers like Microsoft Bing only update about once every 1-3 years and sometimes 5+ years in rural areas. Plenty can happen in the development of a neighbourhood in a few short years. This is where using drones for up to date area photography comes in.

Current photos and videos let appraisers, lenders, realtors and sellers / owners get a real-time birdseye view of what exactly is happening on and around the property. This is especially useful for larger properties and acreages. 

Seeing a property from above and being able to take still photos and videos of the topography and specific features will help paint a much clearer picture for everyone involved.

  • Drones Provide Clients with Clear Evidence as to Why the Property Has Received a Particular Valuation

As a real estate appraiser, you want to be able to leave your client feeling completely confident in your findings of the valuation of their property. From time to time, clients are dissatisfied with a report and may want to contest the findings. 

When you can provide clear photographic and video evidence to support your findings, it makes it so much easier for your client to understand and accept the valuation that’s been assigned to their property. The more information and detail you include on the report and the more you can show the lender and the owner / potential buyer, the better.

  • Drones Can Be Safer for Harder to Access Areas

A high-quality drone used for real estate photography can be highly reliable for enhancing an appraisal inspection. It can access tight spots, investigate roofs, check the interior corners of an attic and more. 

Most drones now have a live view available through its proprietary app on a phone, tablet or controller with video imaging. This live view lets you see exactly what the drone is shooting so you can choose the best flight path to keep it from colliding with trees, wires and people. 

In addition to the live view, many new models have advanced automation and are developed with object detection and collision avoidance.

For instance, roofs can be difficult to access and awkward to navigate in any season. While a home appraiser or real estate agent isn’t required to go onto the roof, it’s important to know what kind of condition the roof is in. Rather than being left taking the client’s word for it or assuming the roof was replaced 10 years ago, flying a drone up and around the roof can locate any issues. 

If there’s any water pooling, overhanging vegetation, excess debris and more, the drone can find it and record it instantly for the inspection report.

While the drone pilot maneuvers around the roof, appraisers and agents can be on the ground checking out the foundation.

Drones for Real Estate Photography and Property Appraisals: Things to Keep in Mind

  • Any drone operator needs to apply for a Special Flight Operations Certification (SFOC) from Transport Canada. 
  • You will need to have at least $100,000 in liability insurance coverage. This helps cover you and your agency in case there is any personal or private or public property damage caused by the drone. This could be a drone flying into a power line, a drone interfering with aerial aircraft, a drone flying into a person, etc.
  • You need to contact NAV Canada for drone flight planning 2-3 days before each flight. NAV Canada will need to know the planned coordinates, date, time, length of flight, maximum radius and maximum altitude. If the flight is in close distance to an airport, you may need to coordinate with the air control tower before and after the flight. 

At D. Fritz Appraisals, our experienced team prides itself on accurate, comprehensive and professional property appraisals. We serve Southern and Central Vancouver Island, plus the Gulf Islands. If you’re looking to buy, divide assets, re-finance or sell, or would just like to know the current value of your property in this heated Vancouver Island real estate market, order your appraisal today or call (250) 413-7319. 

 

victoria bc missing middle housing

Missing Middle Housing in Victoria, BC

Victoria’s Missing Middle Housing Initiative

 As Canada’s housing market continues to hit record levels, young Victoria families are facing the decision to stay in condominiums and apartments or move elsewhere to be able to purchase a single-family home or townhouse with yard space.

The Victoria Real Estate Board now reports that the average price of a detached house in Victoria is over $1 million. The average price for a townhouse is about $750,000.

“None of my peers can afford to buy a house here, most will leave Victoria when they no longer wish to sacrifice their money to their landlords and would prefer to buy.” – Missing Middle Housing Survey Respondent.

At a time when housing prices and rental rates are the highest they’ve been in decades, being able to own a home with a yard has become a pipe dream for many British Columbian families.

Many Victorians pointed out that technically there are units in the city that they could afford, but that most units within financial reach are far too small for their families, with no access to a yard, and no pets allowed, so they are not able to live a full life.

It’s not just families either, it’s students and seniors who are finding themselves priced out of the market for a good, safe home.

What is Missing Middle Housing?

Missing middle housing is designed to address families and individuals who are being pushed out of the market for a single-family home. Missing middle housing types include townhouses, duplexes, triplexes and fourplexes. These three to four-storey units are meant to help diversify housing and provide options that extend beyond detached single-family homes or apartments.

What is the Missing Middle Housing Initiative?

The City’s of Victoria’s Strategic Plan (2020-2022) included an action in 2020 to consider a comprehensive amendment to the Zoning Bylaw to permit all “Missing Middle” housing forms as of right without the need for rezoning or development permit. 

This would make it much simpler for developers to create low-rise multi-family housing developments as infill in existing neighbourhoods. 

Also, rather than demolishing heritage homes to make room for Missing Middle homes, developers would be permitted to build developments designed for slightly higher (gentle) density housing. 

This protects heritage homes and potential heritage homes, while also breathing new life into the surrounding neighbourhood with the goal of increasing liveability, affordability, walkability and accessibility to amenities.

In addition, shared and private green space would be prioritized. In other words, the goal would be to create this gentle density while preserving the integrity and characteristics of the neighbourhood.

Where Can Missing Middle Housing Be Built?

The City of Victoria’s Missing Middle Housing Initiative is proposing that these townhomes and “plex” homes be built amongst existing detached housing in established neighbourhoods. The goal is to create ground-oriented housing that can increase housing choices, affordability for those housing choices, walkability scores and overall sustainability. In short, a home that is affordable for the average family, which cuts down on the need to use a vehicle to get around, with plenty of green space and shared garden/yard space.

“We need to allow flexibility with missing middle — and high gentle density, without requiring parking. If we continue to build for cars, we’ll continue to foster car culture. If we build for families, nature and neighbourhoods, we will foster community.” – Survey Respondent

What has Been Done So Far to Encourage Missing Middle Housing?

Victoria’s Housing Strategy is working to provide solutions by widely engaging members of the public from neighbourhoods all around Victoria and the Capitol region. Between March 2020 and May of 2021, the city of Victoria requested feedback via meetings, surveys, workshops and virtual engagement.

The feedback requested has focused on everything from housing preferences to barriers preventing families and individuals from being able to move from a condo or apartment to a single-family home or house plex.

Some of the main findings in the discussions and surveys;

  1. Parking – Parking space and access to outdoor space were cited as two key reasons for residents wanting a family home or house plex. Proximity to public transportation options was also a key point.
  2. Housing Affordability – One of the highlights from the initial findings was “prioritizing affordability over luxury design” suggesting that potential owners much prefer the indoor and outdoor living space to fancy finishings and custom features. One respondent said: “Housing should be affordable first, accessible second and life improving third.” 
  3. Rental Options – Another needed solution is the increase in rental housing for seniors and students. Survey respondents suggested that one, two and three-bedroom homes in Missing Middle Housing be prioritized for these groups who are currently struggling to find suitable housing. This could create a spectrum of affordability for both owners and renters.
  4. Sensitivity to Different Lot Sizes and Variety of Housing – Allow for flexibility to create attached dwelling units, garden suites, secondary suites, townhouses, house plexes and more, with different combinations on the same lot.
  5. Space for Growing Families – As more people work from home during the COVID-19 pandemic, there is also a demand for slightly larger units so that families can have home offices. A few respondents mentioned the difficulty in living in small suites since the pandemic started. As one respondent candidly put it, “Families can’t love in micro spaces!”

What Are Some Main Concerns About Missing Middle Housing?

Along with positive feedback and an eagerness to move forward with this initiative, residents have also expressed concerns, such as:

  1. Viability – This type of more affordable housing may not be viable for builders and developers. Larger apartment and condominium developments are much more financially sound developments, by sheer volume alone.
  2. Crowding – May create too much density in primarily single-family neighbourhoods.
  3. Widespread changes – Some feel that this type of development could alter streetscapes, reduce the feel of a quiet residential community, reduce green space and result in the loss of tree canopies.
  4. Urgency – In this housing crisis, housing is needed now. Feedback from Victoria residents indicates that renters need access to affordable housing right now, not in five years. The sooner gaps in housing choice and affordability can be addressed, the better. There is also a real urgency for families and residents who feel there is no financially achievable housing option for them within the city, even with well-paying jobs and savings.
  5. NIMBYism (Not In My Back Yard) – Residents may oppose any additional development in their existing neighbourhood. Some residents have expressed worries that multi-unit housing types will bring in more renters, more commercial buildings (shops, restaurants, etc.…) and drastically change their quiet residential neighbourhood.

Missing Middle Housing is an Ongoing Debate

With so many pros and cons attached to the Missing Middle Housing Initiative, it’s no wonder that responses are so split. 

As pricing in and around Victoria, BC continues to rise with no real end in sight, the City of Victoria is pushing ahead with gathering as much feedback as possible and working to educate existing homeowners on the merits of this gentle density housing strategy. 

Educate yourself and have your say in the virtual open house today. Take the Phase Two survey, watch the video below and explore all the feedback from Victoria residents to learn more.

Thinking about a move and wondering what your home is worth in the current marketplace? With over 40 years of experience, our team is approved for most banks, credit unions and private lenders. We provide professional real estate appraisals from our home base in Victoria all the way to Nanaimo and the Gulf Islands. Contact us at D. Fritz Appraisals in Victoria BC today to request your real estate appraisal.

what to do when you inherit property in victoria bc

What To Do When You’ve Inherited Property

Inheriting Real Estate – Should you Keep or Sell?


Inheriting property can be an emotional event. In one way, your family just lost a loved one. On the other hand, you’ve possibly been gifted one of the biggest contributions of your life. Dealing with whatever life throws at you can be complicated, but luckily there are professionals to help you every step of the way while you grieve and process. It’s common practice for parents or grandparents to leave their home or cottage to a child or grandchild. However, that means the taxman could expect a share of the transfer proceeds, as the value of the property has now transferred from one owner to another. Another aspect is whether or not it is a primary residence or a secondary residence. This will factor into how much tax you potentially pay. How much can you expect to pay? That depends entirely on what you do with the inherited property, and this is why appraising the property is so important.

What Utilities Do I Keep Running?

Track down all of the utility accounts, and cancel the ones that aren’t necessary. Keep the electricity, heat and water running. Be sure to update the homeowner’s insurance policy. Contact the insurance company immediately, because it can potentially lapse if the house is unoccupied. It’s also a good idea to change the locks to make sure the property is secure, just in case someone you may not know has a copy of the house key. Other things to consider would be arranging upkeep around the property, and dealing with the belongings left behind.

What Taxes Do I Pay on Inherited Property?

Capital Gains Tax on Inherited Real Estate

Capital gains tax is considered taxable income in Canada and this is what you’ll pay on the profit of the sale of the property. You will be taxed on the “Fair Market Value”, at the time of inheritance to the time you decide to sell. It’s important to note that you will be taxed 50% of the capital gain.

Real Estate Inheritance Tax

In Canada, there are no inheritance taxes. Which means you don’t have to pay in order to take over a property. However, you do take over property taxes, repairs, mortgage payments, and insurance. If you have inherited a primary residence, you do not have to pay to have the residence transferred to your name. If it’s considered a cottage or vacation home, you may have to pay for property transfer tax. If siblings share an inherited property, they split the cost of the capital gains tax.

Should I Rent Out My Inherited Property?

If you plan on renting out the property, you’ll need a real estate appraisal. In theory, you would owe capital gains tax on the difference between the value of the inherited home, and the fair market value of the home when you chose to rent the property out. This is changing it from a primary residence to an investment residence. In other words, you will owe on the difference of the inherited value and the fair market value when you started to rent out the property. While renting out an inherited property can provide a steady cash flow, you’ll also be taking on the role of a landlord! One other option before selling is if one or more siblings wants to stay in the inherited home, they can simply rent it from the others.

What Happens When I Sell My Inherited Property?

One benefit of selling shortly after inheritance is that the capital gains tax would be nominal. There would be little difference between the assessed fair market value when you inherited the property and the sale price. The easiest way to calculate the capital gains tax is to subtract the sale price from the fair market value price and 50% of that is how much tax you owe. If siblings have inherited the property and have agreed to sell, they would all have to share the capital gains tax. One important detail is if one sibling wants to sell but the others do not, they are still entitled to sell their share. However, they may have trouble finding a buyer interested in a portion of a property. Keep in mind if you sell the property, and you already own a primary residence, you will be subject to capital gains tax. 

What If I Want To Move In?

The most common scenario here is if one inheritor wants to keep the home, the others will have to be bought out in order for them to become the sole owner. If that inheritor buys them out and considers the property their principal residence, they don’t have to pay the capital gains tax. 

Do You Need An Appraisal For Newly Inherited Real Estate?

It’s important to note that your own circumstances will dictate whether owning the property is a financial burden or an improving investment. Is it too far away? How much maintenance and upkeep does it require? Do you need the money, or is it a worthwhile long-term investment? Be sure to discuss all options with your relatives, siblings, and anyone else who has ownership.

At D. Fritz Appraisals Inc., our team has over 40 years of experience appraising homes, offering the most accurate valuation according to the market today. Our appraisers are certified, professionally insured and committed to the most precise property valuations possible. Contact us today for an expert appraisal of your newly inherited property.

canadian housing prices to decrease in 2022

Housing Prices are Forecast to Decrease 20% Next Year

According to Industry Experts, Housing Prices May Fall in 2022


There Were Major Price Increases in Single-Family Housing and Multi-Family Housing in 2021

Housing prices have seen a huge increase over the last few years, with a particularly large leap this year. The median home prices in Greater Victoria surpassed a million dollars, at $1.2 million. Elsewhere on Vancouver Island, home prices also rose sharply. This rise has caused rental rates to spike, increased demand for housing and has made it very difficult, if not impossible, for first-time buyers to get their foot in the door of home sweet home.

The Housing Bubble May Already Be Shrinking

Thankfully, according to numerous reports from financial analysts, this overinflated housing bubble has begun to shrink in metro areas and will continue to shrink in 2022. Quelling fears that the bubble will burst, causing economic disaster, reports are showing only a slight decrease, with home prices being predicted to rise an average of only 3.7%, down from the original prediction of 4.0%. Still, any reduction is great news!

Why Are Real Estate Prices Forecast to Decrease?

Factoring into this decrease is a rise in mortgage interest rates. 2020 and 2021’s low interest rates have driven high amounts of investor activity, causing homes to be bought up in just moments after listing, or even before hitting the market. In an article by the Vancouver Island Free Daily, pent-up demand and extremely low inventory have also been driving factors for the rapid-fire sales.

“Fiscal stimulus, accelerating inflation and lessening support from the Bank of Canada all signal higher interest rates in the year ahead. Rising borrowing costs may also cool down housing market activity,” said Brendan LaCerda, senior economist at Moody’s Analytics. Part of rising borrowing costs is an increase in the Mortgage Stress Test, which has increased uninsured mortgage rates to 5.25%

Buyers who could snag a $900K home at a low interest rate will have a much tougher time qualifying for, and paying for, a $900K home at a higher, more standard interest rate. The positive changes to the CMHC’s First-Time Homebuyer’s Incentive certainly might help as well.

What Caused the Housing Buying Boom in the First Place?

Some industry experts believe a lot of the market demand this year could have been due to fear of missing out (FOMO), particularly for investors. It’s a classic case of supply vs. demand. It’s just like when you’re in a store and you see one item that you’re particularly drawn to and it appears to be the last one. It’s more appealing because it seems to be rare. You buy it, and as you walk out of the store, you see an identical item on the display. Suddenly, your one-of-a-kind item doesn’t have the same shine to it!

For home buyers, it’s roughly the same experience. The market scarcity is driving buyers to purchase pretty much whatever they can get, even if it’s well above asking. These buyers tend to believe that these prices are the new normal and this is their chance. Between record-high sales and record-setting low inventory, there’s a worry that buyers might be taking on more than they can afford, due to the low interest rates, according to Susan Perrey, a realtor and Zone 3 Director for the Vancouver Island Real Estate Board (VIREB.)

It hasn’t just been existing homes either, plots of land and new developments have been selling just as fast as the listing goes live. Now, according to the BC Real Estate Association (BCREA) levels of home sales will come back down to 2016 levels, the former peak level for home sales across BC.

According to an article by Western Investor, Brendan Ogmundson, BCREA’s chief economist said “we are coming off a record-smashing pace” where sales could reach 130,000 units or more this year following 94,013 sales in 2020, compared to the regular levels of about 80,000 transactions each year.

10 of 14 analysts said an interest rate hike would significantly tame the Canadian Real Estate market and housing demand. This supports all this speculation that a soft landing is expected for the market province-wide, with a slower pace in buying and selling and more balanced home prices.

In the latest real estate news, in an interview with BNN Bloomberg, Pedro Antunes, Chief Economist with the Conference Board of Canada, says that we can now “expect a 10% decline in average home prices over the remainder of 2021 and into 2022.”  This is great news, since a smaller decline in prices will help protect the market from a catastrophic crash – like the housing market crash in the US back in 2008 that sent shockwaves through the entire financial sector across the country, into Canada and around the world.

In all the reports for the future of Canada’s real estate market, the overarching message is that of hope. As long as the increase in interest rates and decrease in home prices are incremental, experts are hopeful that real estate markets on Vancouver Island and across the country will balance out.

Considering an Appraisal for Your Home?

If you’re considering selling or refinancing your home in the near future, it’s still very much a seller’s market. Wondering how much your home is worth? At D. Fritz Appraisals Inc., our team has over 40 years of experience and we’ve been the go-to appraiser during all sorts of market conditions. We can appraise your home for the most accurate valuation according to the market today. Our appraisers are certified, professionally insured and dedicated to providing the most precise property valuations possible. To help boost your home’s appraised value, take a look at our post on 8 ways to increase the value of your home, gather as much information as you can with our handy pre-appraisal checklist and then give us a call to book your home appraisal.

First-Time Homebuyers

First-Time Homebuyers Incentive Changes: What You Need to Know

Exciting New Changes to the CMHC First-Time Homebuyers Program

First-time homebuyers, we have great news! As of May 3rd, 2021, new updates to the Canada Mortgage and Housing Corporation (CMHC)’s First-Time Homebuyers Incentive have come into effect. Victoria is now one of the few cities that has been given enhanced eligibility criteria to help you qualify for a lower monthly mortgage payment.

What Is the First-Time Homebuyers Incentive?

The First-Time Buyers Incentive can lower your monthly mortgage payments.

As explained by the National Housing Strategy, the First-Time Home Buyers Incentive is a program that lets you borrow 5% or 10% of the sticker price of a home. When you decide to sell your house (within a 25 year period) you pay back that same percentage of the value of your home.

How Does the First-Time Homebuyers Incentive Work?

The incentive works just like putting a second mortgage on your home. 

To qualify for the incentive, your mortgage must be greater than 80% of the value of the property subject to a real estate loan premium. Your mortgage must also be eligible for mortgage insurance through Canada Guaranty, CMHC or Sagen (previously known as Genworth.) 

The mortgage insurance premium is based on the loan-to-value ratio of the first mortgage only. So, the first mortgage amount is divided by the purchase price. The good news is you don’t pay mortgage insurance on the incentive, since it’s included with the total down payment.

What Are the Updates to the First-Time Homebuyers Incentive?

First-time homebuyers purchasing in Toronto, Vancouver, or Victoria are now eligible for an increased Qualifying Annual Income of $150,000 instead of $120,000, an increase of $30,000. This can mean the difference between being able to buy a home or having to save up for a larger down payment. 

First-time homebuyers are also eligible for an increased total borrowing amount of 4.5 rather than 4.0 times their qualifying income, meaning you can buy that bigger, better home. 

Not sure if your preferred neighbourhood is included in Victoria proper? The location maps and tools on www.placetocallhome.ca will help you be sure the home you want is in the right location to qualify for the First Time-Home Homebuyers incentive.

How Does the First-Time Homebuyers Impact My Mortgage?

There are two options, 5% or 10%, depending on what you qualify for as a buyer. Your mortgage lender can explain how the amount of your down payment, purchase price of the home, annual income and more can help influence which incentive you’re eligible for. Here are two scenarios that help to explain what happens when your home’s value increases versus what happens when your home’s value decreases after you get the incentive.

Scenario 1 – You receive a 5% incentive and your home’s value increases

As the buyer, you receive a 5% incentive of the home’s price. If you were purchasing a $200,000 home, you’d receive $10,000. If that home’s value increases to $300,000, your payback will be 5% of the current value (or $15,000.)

Scenario 2 – You receive a 10% incentive and your home’s value decreases

You receive a 10% incentive of the home’s price of $200,000, or $20,000. If your home value decreases to $150,000, your repayment value will be 10% of the present value (or $15,000.)

Am I A First-Time Homebuyer?

You are considered a first-time homebuyer if:

  • You have never purchased a home before.
  • You didn’t live in a home that you (or your current spouse or common-law partner) owned within the last 4 calendar years. Note: the 4-year period begins on January 1 of the fourth year. 
  • Your marriage or common-law relationship has recently ended and you’re going through a separation or divorce requiring a division of assets.

Other eligibility requirements for the First-Time Homebuyers Incentive:

When determining whether you are eligible for the First-Time Home Buyer Incentive in Victoria:

  • Your total annual qualifying income will not exceed $150,000.  
  • You’re borrowing no more than 4.5 times your qualifying income.
  • You or your spouse / partner are first-time homebuyers.
  • You are a Canadian citizen, permanent resident or non-permanent resident authorized to purchase a property in Canada.
  • You meet the minimum down payment requirements with traditional funds—this could be savings, withdrawal/collapse of a Registered Retirement Savings Plan (RRSP), or a non-repayable financial gift from a relative/immediate family member.

What else should you know?

If you’re considering applying for the incentive, you should be prepared for some potential additional costs. These can include:

  • Additional legal fees- Since you will be closing on two mortgages, your fees may increase.
  • Appraisal fees – To repay your incentive, you’ll need to have an appraisal done to work out the fair market price of your home. (Need some pointers? We’ve curated a pre-appraisal checklist just for you.)
  • Property insurance premiums – Extra costs may factor in since there is an additional mortgage registered on the property. Talk to your insurance agent or insurance provider for more details on these types of fees and premiums.
  • Other fees – Additional documentation or admin fees could also be incurred if you switch your mortgage to a replacement lender or if you refinance the mortgage.

Lastly, the type of home / property that you are looking to purchase is going to play a factor in the incentive amount that you are given. A new construction home may qualify for an incentive amount of 5% or 10%. An existing home or a mobile/manufactured home will be a flat 5%. 

Also, any residential property with 1 to 4 units can qualify, which means the options are endless: You are eligible with anything from a single-family home, a semi-detached home, a duplex, triplex, fourplex, townhouse, condominium unit, or a mobile home. The caveat is that this must be your residential property that you live in, year-round. Income properties will not qualify.

Applying for The First-Time Home Buyers Incentive is Simple

Once you’ve been preapproved for a mortgage, you can fill out the two forms found on A Place to Call Home. Under “How Do I Apply” you’ll find these forms.

  1. The First-Time Home Buyers (FTHBI) SEM Information package
  2. The SEM (Shared Equity Mortgage) Consent form

These PDFs can be printed and filled out, or filled out digitally. Once they are complete, give them to your lender. They will submit the application for you. If you need any help with the forms, just let your lender know. They’ll be able to help you dot the i’s and cross the t’s. 

The final signed copy of the SEM package will go to your lawyer or notary. Once you’re accepted for the Incentive program, you just need to activate your incentive. It’s as easy as a phone call. Just call Fidelity National Financial Canada at 1 (855) 844-4535 and give them the name of your lawyer or notary. The sooner you can do this, the better, since you’ll need to activate your incentive at least 2 weeks before the sale of your home closes.

The First-Time Homebuyers Incentive changes make purchasing a home in Victoria a little bit easier. With this new eligibility criteria now in place, it may just be the perfect time to consider becoming a homeowner. At D. Fritz Appraisals Inc., we can help you with that. Whether you are thinking of buying or selling, or just looking to get that appraisal done, our experienced and professional team of appraisers offer the most accurate and comprehensive residential real estate appraisal service around Victoria, central Vancouver Island, and the Gulf Islands. To order an appraisal, call us at (250) 413-7319. You can also send us an email and we’ll respond as soon as possible.

New mortgage stress test for Canadians

New Increase in Mortgage Stress Test

Rate Hike Will Affect a Large Number of Borrowers

The Mortgage Stress Test will be increasing as of June 1, 2021. Under the new requirements set by the Office of the Superintendent of Financial Institutions (OSFI), uninsured mortgages will increase to a qualifying benchmark rate of 5.25%.

The Mortgage Stress Test Rollercoaster

If you were refinancing or purchasing last year, you probably noticed that the stress test decreased in 2020, to 4.79%, just 15 basis points above the record low of 4.64%. In finance, especially real estate, a bit of a rollercoaster is common. That said, the general consensus within the industry is that no one really expected to see such a drastic change in Canadian housing market conditions in a one-year time period. 

Real Estate and financial speculators have been predicting everything from catastrophe to smooth sailing as more investors purchase luxury homes. Now experts say that increasing the mortgage stress test requirements for potentially riskier, uninsured mortgages can help to smooth the curve. They also say it can help rebalance supply and demand in the residential real estate market as well as overall economic conditions.

Why is the Mortgage Stress Test Increasing?

The OSFI hopes that imposing a higher mortgage stress test rate will help to cool down an overheated real estate market. Throughout the pandemic, supply and demand have become extremely unbalanced, with much less supply of residential homes than in past years. Those homes that are listed are often sold for well over asking, driving the average home prices higher and higher as a result.

According to stats from the Victoria Real Estate Board (VREB) In April 2021, median house prices in Greater Victoria increased to $996,500, up from $884,600 in April 2020.

“We’ve seen an imbalance in our market for quite a few months, says VREB President David Langlois. We continue to see huge pressure on single-family homes,” he adds. “New listings are snapped up as soon as they are listed.”

The good news is that the mortgage stress test increase will not be implemented across the board for all house hunters. Only those trying to qualify for an uninsured mortgage will be subjected to the new, higher mortgage qualification rate as of June 1, 2021.

What is an Uninsured Mortgage?

Canada has three default mortgage insurers, CMHC, Sagen (previously Genworth) and Canada Guaranty. Bank of Canada guidelines dictate that these insurers can not insure specific types of mortgages.
These are:

  1. Refinanced mortgages – Increasing the existing mortgage for access to additional funds is called refinancing. Mortgages are often refinanced when the homeowners want to renovate, access the equity in their mortgage to pay for schooling, a secondary property or finance a small business. Of course, the rules and regulations vary per borrower and lender, the type of mortgage, the amortization period and more.
  2. Purchases with a 20% or higher down payment, on 30-year amortizations (terms)
  3. Purchases of $1,000,000 or higher, with any amortization period
  4. Purchases of a rental / income property

What Does this Mortgage Stress Test Rate Increase Mean for Homeowners?

The stress test rate increases will make it more difficult to refinance, since homeowners who wish to increase their mortgage loan must be able to qualify with these new, higher interest rates. It could also mean the difference between finally being able to purchase your first home or needing to wait a little while longer until you can meet the new 5.25% requirement.

Also, because uninsured mortgages account for approximately 70-75% of all mortgages issued by Canadian Financial Institutions (CFI), a huge chunk of mortgage applications will potentially be rejected due to their higher financial risk to lenders.

For example, after the changes take place on June 1, your mortgage qualification of x amount will decrease. A $400,000 mortgage qualification will slip down $15,000 to $385,000. The higher the home price reaches, the larger the difference. That $15,000 difference in the $400,000 mortgage can mean the difference between lenders being able to provide the loan or not. It could also mean the difference between the homeowner being able to refinance their existing home or purchase an income property, which for many, can be a great way to increase their investment portfolio. 

The Mortgage Stress Test Increase Will Not Affect Everyone

Rest assured, the increase won’t affect first-time homebuyers with less than 20% down, since their mortgages will be insured (usually with CMHC). It also won’t affect buyers who put more than 20% down AND who amortize over 25 years. The maximum mortgage term will be 25 years for insured mortgages and 30 years for uninsured mortgages. Also, the stress test will stay at 4.79% for insured mortgages, preventing any additional mortgage debt.

 

The mortgage stress test increase is just around the corner. If you’ve been considering refinancing to access funds for the renovation you’ve been dreaming about, now is the perfect time. Give our team at D. Fritz Appraisals Inc. a call to book your residential appraisal. We’ll help you uncover the value in your home with our comprehensive and accurate evaluations. Whether you’re looking to buy, sell or refinance or just have an up to date appraisal for your records, our property value estimations can help you get ready for the next step in your real estate journey. Located on Royal Oak Ave in Victoria, BC, we’re open Monday to Friday, 9 AM to 5 PM. Give us a call at (250) 413-7319 or contact us via email.

pre-appraisal checklist for homeowners

Pre-Appraisal Checklist for Homeowners

Be Prepared for an Appraisal for a Positive Impact on Your Home’s Valuation

Whether you’re selling, refinancing, dividing assets, settling an estate, or determining capital gains on an income property, it pays dividends to be prepared for your home appraisal.

The benchmark for your home’s worth, an appraisal is a legal document that determines the fair market value of a property. It takes the home itself, the neighbourhood and the available historical data into account to determine the most accurate valuation. If you want to refinance, sell, or buy, the appraisal provides mortgage lenders with straight facts so they can underwrite loans based on the purchase price or the appraisal (whichever is lower.) If you’re selling or dividing assets post-divorce, the appraised value ensures that you’ll receive a fair sale price.

How Do I Get Ready for the Appraisal on My House?

Thinking back to when you first listed your home, you likely cleaned it top to bottom and got it looking as good as new for the marketing materials. You’ll want to do this again for your appraisal, so your home makes the best impression possible.

To prepare, gather up all the details about your home relevant to its value. Have a record of comparable properties in the neighbourhood, plus information about neighbourhood amenities. Once that’s done, you can turn to the home’s appearance, doing any repairs and getting estimates for any larger repairs or updates that are needed. Also, don’t overlook the general condition and upkeep of your home. Essentially, you’re going to want to pretend you’re listing your home for the first time and get it looking its best, attending to anything that may have been missed when it was placed on the market.

A good rule of thumb is the $500 rule. Anything that needs to be repaired or updated usually detracts from a home appraisal in $500 increments. Things like cracked tiles, broken fixtures or an outdated countertop can add up to thousands less in your home valuation. Before your home appraisal, you’ll want to go through your home and take care of anything that costs less than $500 to fix. You’ll be able to recover those costs in your home appraisal.

On the day of the appraisal, make sure the appraiser will be able to move around the full perimeter of the home and that all rooms are accessible. You may also want to contain any pets who may be a disturbance. We’ve prepared a complete checklist to make preparing for your home appraisal as simple as possible:

Full Residential Pre-Appraisal Checklist

Information About the Home

  • List of improvements made in the last 15 years, with costs and completion dates.
  • Plot/blueprint or property survey.
  • Home inspection reports (current and previous). If you’re unsure about the difference between each, we have a helpful blog post on home inspections vs. home appraisals.
  • Copies of any previous appraisals – this can help the appraiser see how the value has changed over the years. This can help to pinpoint any trends when combined with the BC Property Assessment information.
  • HOA documents – if you live in an HOA neighbourhood, the appraiser will need to see the costs, regular maintenance schedule, history of fee increases, etc.
  • Any known inconsistencies with data – if your assessed property value has been fluctuating wildly over the years, this needs to be looked at. This will help ensure a fair market value.
  • Any non-permitted additions – if you’ve added a permanent structure without a permit, this can impact the value of your home and pass an unwanted issue on to the buyer. It’s important to note that any undisclosed additions can cause a breach of conditions in your sale contract.
  • Any easements or encroachments – any part of the property should be accounted for to get the most accurate estimate of the land value.
  • The CMA (Comparative Market Analysis) from your Realtor – review this document to see if you know of any homes that were renovated after purchase. Their newly increased value can increase your neighbourhood’s benchmark prices and potentially, that of your home. Properties that have undergone significant changes may no longer be useful for the CMA.

Neighbourhood Features

  • Nearby schools and any special notes about their programs
  • Nearby parks and green space
  • Amenities and shopping
  • Public transport locations
  • Any infrastructure that’s been added since you bought the house


Interior Care

  • Clean up and repaint areas where paint is peeling and discoloured
  • Repair or replace broken hardware
  • Replace outdated fixtures
  • Clean carpets and mop hard flooring
  • Repair any loose floorboards, broken blinds, etc.


Installations

  • Are smoke detectors working?
  • Are carbon monoxide detectors working?
  • Is the water heater strapped?
  • Is the security system in good working order?
  • Are all appliances properly installed and working?


Repairs

  • Note any major repairs and how much it would cost to complete them.
    The appraiser will be able to factor that cost into the appraisal as if the repair or upgrade were already completed.
  • Any leaks in roof or key parts of the home
  • Cracks in walls or foundation
  • Damage to flooring
  • Damage to drywall or exterior stucco/siding
  • Peeling paint
  • Visible damage to doors, windows, screens, etc.


Exterior Care

  • Remove clutter and stray toys from the front and back yards
  • Mow the lawn
  • Tidy the garden and do a little light landscaping
  • If possible, add colour with flowers
  • Touch up paint where it’s needed
  • Replace any broken gutters
  • Update older fixtures and address numbers
  • Remove any outdated décor

 

If you have any questions or concerns about the appraisal process, we recommend looking through our FAQ section, or contacting us by phone or email for assistance. You may also want to speak with your real estate agents about your appraisal preparation.

For even more ways to increase your home’s appraisal value, be sure to read our post on 8 ways to increase the value of your home.

D. Fritz is your residential appraisal expert for Vancouver Island, Victoria and the Gulf Islands. If you’re considering refinancing, buying or selling, our professional team will provide the most accurate and comprehensive evaluations. With a combined half century of experience across the industry in business administration, lending and real estate sales, you can trust in D. Fritz for your real estate appraisal. To order your appraisal, contact our team today.

canadian real estate trends 2020

Cost Comparison and Trends in Canadian Real Estate

2020 has been a year of highs and lows for the Canadian Real Estate Market

Fitting with the times we’re in, the CREA (Canadian Real Estate Association) couldn’t even publish a quarterly trend forecast in June. Instead, a notice on the webpage stated that “as providers of the most accurate and timely housing data and statistics, CREA believes the outlook to still be too uncertain to release a forecast at this time.”

However, there are still monthly forecasts. As of August 2020, the CREA’s monthly stats and forecast was quite positive, showing home prices and sales increasing across Canada (on average).

Canada’s Real Estate Market is Still Hot

July 2020 was a record-breaking month for many markets, which otherwise floundered during April and May. In fact, according to the CREA monthly stats report, home sales rebounded by 26% in July 2020. Transactions increased country-wide on a month over month basis.

At this point, supply has exceeded demand in many markets, creating a competitive and busy market as we close out summer 2020. Major markets like London-St Thomas, Montreal, Ottawa and Vancouver have seen large jumps in average home prices in the past year.

Sales Increases in the 11 Largest Markets

  • 49.5% in the Greater Toronto Area (GTA)
  • 43.9% in Greater Vancouver
  • 39.1% in Montreal
  • 36.6% in the Fraser Valley
  • 31.8% in Hamilton-Burlington
  • 28.7% in Ottawa
  • 16.9% in London and St. Thomas
  • 15.7% in Calgary
  • 12.1% in Winnipeg
  • 9.7% in Edmonton
  • 5.4% in Quebec City

Housing Prices Across Canada

Note that this statistical information includes all housing types. This average price information is used for determining trends over time and doesn’t account for price ranges between dramatically different neighbourhoods or geographic areas.

  • Home prices have been rising nearly constantly for the past 17 years and between 2016 and 2019, pricing rose by 27.8% (18.5% adjusted for inflation).
  • Across Canada, the average home price rose to $571,471 in July 2020, compared to $500,164 in July 2019. B.C and Ontario are currently the most expensive markets, with average pricing of $699,300 and $606,400.
  • During 2019, Ottawa’s home prices rose the most at 7.38% (on average). Next was Halifax at 7.35%, Montreal at 6.37% and Toronto at 4.48%
  • There were also smaller increases in Quebec at 1.49%, Victoria at 1.13% and Winnipeg at 1.02%
  • Pricing fell in Vancouver at -4.05% and in two of Alberta’s major markets: Edmonton at -1.49% and Calgary at -0.94%

Average Housing Prices in Major Canadian Cities

East of Saskatchewan, most markets have seen strong sales and increasing prices. While prices have also risen in B.C. and Alberta, they haven’t been as distinctive. According to the CREA’s monthly statistical report, the actual (not seasonally adjusted) national average price for homes sold in July 2020 was $571,500, up a record-setting 14.3% from July 2019.

This number is influenced by the increases in Canada’s two hottest and most expensive markets- Greater Toronto (GTA) and Greater Vancouver. Without the increases in these markets, the national average home price would be around $117,000 less.

View CREA’s National Price Map

Greater Vancouver

Average Price- $1,031,400 in July 2020 compared to $987,200 in July 2019

Fraser Valley

Average Price- $858,300 in July 2020 compared to $824,500 in July 2019

Victoria

Average Price- $724,600 in July 2020 compared to $700,300 in July 2019

Edmonton

Average Price- $319,000 in July 2020 compared to $323,800 in July 2019

Calgary

Average Price- $411,200 in July 2020 compared to $417,200 in July 2019

Regina

Average Price- $272,200 in July 2020 compared to $269,000 in July 2019

Saskatoon

Average Price- $296,900 in July 2020 compared to $291,300 in July 2019

Winnipeg

Average Price- $284,000 in July 2020 compared to $270,500 in July 2019

Hamilton-Burlington

Average Price- $687,000 in July 2020 compared to $608,600 in July 2019

London-St Thomas

Average Price- $485,802 in July 2020 compared to $406,125 in July 2019

Montreal

Average Price- $401,300 in July 2020 compared to $351,700 in July 2019

Greater Toronto

Average Price- $880,400 in July 2020 compared to $800,200 in July 2019

Ottawa

Average Price- $506,700 in July 2020 compared to $428,100 in July 2019

Quebec City

Average Price- $258,000 in July 2020 compared to $244,800 in July 2019

Halifax- Dartmouth

Average Price- $363,692 in July 2020 compared to $310,251 in July 2019

St John

Average Price- $202,297 in July 2020 compared to $185,632 in July 2019

The Price Gap Between Condos and Single-Family Homes is Shrinking

The mortgage stress test is potentially making it tougher for home buyers to get into single family and more expensive types of homes (particularly in major cities). First time buyers in major markets may opt to purchase a condo over a single-family home. Condo prices are rising due to increased demand (4.2% year over year) and single-family home prices remain relatively similar – the gap between condo pricing and single-family home pricing is narrowing.

Single Family Homes Under Development

In 2018, there were 46,747 units under construction, according to the Canada Mortgage and Housing Corporation (CMHC). This was down from 55,000 units in 2017. As people move further away from the larger cities (Toronto and Vancouver) there are more opportunities for development and more affordable housing prices.  Within pricier markets, home buyers may often look for properties with rental income potential to offset the cost of the mortgage.

Multi-Family Homes Under Development

Condos are the leader for new home construction. In 2018, inventory still under construction reached almost 121,000 units (54% of new builds). Condos also eclipsed single family and rental homes (apartments) at 46,747 units and 56,394 units, respectively. Condos purchased by investors also supplement and supply the rental market. Thinking about getting into the market this fall? Whether you’re considering buying or selling or just want to know what your home is truly worth, our team offers accurate, comprehensive and professional residential real estate appraisal services. D. Fritz Appraisals serves clients from South to Central Vancouver Island (Victoria to Nanaimo) as well as the Gulf Islands. For any questions or to order an appraisal, contact us today.