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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.

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.

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.

real estate market trends 2020

Current Real Estate Industry Trends

COVID-19 Halts the Vancouver Island Real Estate Marketplace

At the start of the COVID-19 pandemic, no aspect of the Canadian economy was left untouched and the real estate market felt this acutely with a major slump during March and April. During this period, many British Columbians experienced layoffs, placed themselves in social isolation and were hesitant to open their homes to strangers. For many, listing their homes or searching for a new home took a backseat to navigating the “new normal” during this very odd time in history when schools, workplaces, and all public spaces shut down, seemingly overnight. Also, as restrictions on rental properties were put into place to protect tenants from eviction during the lockdown period, owners of these properties were unable to list these homes. With realtors also self-isolating and avoiding in-person meetings, the market in the Victoria Real Estate (VREB) region was uncharacteristically quiet during what would normally be peak season. Live-streamed open houses, virtual walkthroughs, masks and sanitizer waiting at listed homes became common as the first weeks wore on.

The Vancouver Island Real Estate Market Bounces Back

The market experienced a stronger than expected bounce-back in late May and June, closely timed with the start of Phase 2 of the BC Restart Plan. As a result, in June the number of homes on the market was much closer to 2019 numbers and sales in June 2020 in the VREB region surpassed sales from June 2019. Despite a slow spring, home prices continued to rise. The sale price of an average single-family home in Victoria topped $1 million in June. Competitive/ multiple offers have also become common due to limited inventory. The BCREA, VREB, and VIREB, Real Estate professionals and other industry experts report this is likely due to a pent-up demand from buyers and sellers having to wait throughout the spring (normally the ideal time to buy and sell) to make their move.

real estate market trends 2020

Changes by the Canadian Mortgage and Housing Corporation (CMHC) may also have played a role in demand with new changes resulting in reduced borrowing power. The eligibility rules for a mortgage have now changed to include an inability to use borrowed funds for a down payment, requirements for a higher credit score, and a lower amount of debt that an applicant is allowed carry. Some buyers, particularly first-time buyers, may have felt a push to purchase a home before those changes came into effect July 1. “COVID-19 has exposed long-standing vulnerabilities in our financial markets, and we must act now to protect the economic futures of Canadians,” says Evan Siddall, CMHC’s President and CEO, of the changed eligibility rules for borrowers requiring mortgage insurance.

Changes in Pricing Could Lead to New Opportunities

Rising home prices are believed to be a result of limited inventory and more competitive/multiple offers seen through May and June as the market began to recover. Despite this initial rise, lower valuations may come into play as the COVID-19 pandemic continues, and as we experience a potential second wave.

The Vancouver Island Market Moving Forward

The Real Estate market on Vancouver Island is a mixed bag and it remains to be seen how it will fare long-term, particularly after Canadian Emergency Response Benefit (CERB) and other government assistance programs wind down during the next few months. The CERB benefit, for example, is available from March 15 to October 3, 2020 but can be applied for retroactively up until December 2, 2020. These programs have temporarily taken the pressure off to pay the mortgages and bills and even defer taxes Industry professionals believe it’s possible there may be a surge in sales as these programs phase out, forcing homeowners to list their properties.

A bit of good news: in the most recent market intelligence report by the British Columbia Real Estate Association (BCCREA), it is “anticipated that while the economic impact of the COVID-19 outbreak will be deeply felt, the bounce-back will be faster than in previous recessions. As the protection measures are lifted, as we have already seen in parts of the Province, the pent-up demand will return to local markets with buyers keen to take advantage of low interest rates.” The long-term effects remain to be seen, but on the positive side, a combination of lower interest rates, increased inventory and a drop in valuation have the potential to create an ideal buyer’s market and faster sales.

 

The Numbers:

  • In April 2020, sales in the VREB dropped by 58.8 percent compared to April 2019
  • Condo sales are down 3.2% with 209 units sold in June 2020- believed to be at least partly a result of rising Strata insurance costs.
  • Single family home sales are up 16.8% with 460 homes sold in June 2020
  • Sales in the VREB region were up in June at 808 properties sold, compared to 740 properties sold in June 2019
  • There are currently 2,698 active listings on the VREB Multiple Listing Service (MLS) as of the end of June 2020

Full VREB Stats

 

As one of Victoria’s longest-standing appraisal firms, rely on our years of expertise if you are considering buying, selling, or re-financing. At D. Fritz Appraisals Inc. located in Victoria BC, our expert team understands that these are uncertain times and its of utmost importance to have the most accurate and comprehensive valuations possible. To get the full picture of the value of your property, contact us today.

Purchasing an Income Property with Equity

Purchasing an Income Property

Appraising Your Home to Access Capital for Purchasing an Income Property

How to get the best appraised value possible out of your current home to help you purchase an income property.

Own your own home and thinking about buying another? Excellent idea! Purchasing a secondary property to use as an income property or rental property is a smart investment and is often more possible than you’d think, especially if you have capital or home equity building up in your existing property. A local appraisal company working with a mortgage broker local to Victoria BC, can help you find out if you have enough capital or home equity in your existing property to qualify for a mortgage refinance so you can purchase another property.

Using your existing home’s equity, or increased value, to purchase an income property is something financial advisor and mortgage brokers advise all the time in order to help homeowners get ahead and secure financial freedom into their retirement years. With an income property, you’re allowing tenants to pay down your mortgage for you, and once it’s paid off, you have a property that has increased in value that you can either sell, pass on to your grown children, or downsize into and enjoy yourself.

Owning more than one property is made easy with a simple refinance of your existing mortgage. Mortgage refinancing involves having your existing mortgage re-evaluated so that you can borrow additional funds (access your home equity) from your lender to put towards a second property, or spend however else you’d like. This borrowing of extra money is made possible only if you have enough equity on your first home built up – and that is precisely where a real estate property appraisal company comes in!

Here are 5 things you should know about getting your home appraised to access your home equity.

1. An accurate appraisal of your property’s current market value is essential to the refinancing of a home.

If you’re like most homeowners, you are likely already somewhat aware of your home’s value in the current market. After all, you get annual assessments from BC Assessment, and you may see your neighbours selling their properties for top dollar, or receive letters from hopeful realtors informing you of how much your home is worth.

However, when it comes to something as important as refinancing, you want to make sure your home’s indeed got enough equity to refinance. A property appraisal company can confirm what you already know to be true, and in many cases delight you with an even higher number than you or your lender were thinking possible.

Remember, the cost for a property appraisal is a flat fee – it is NOT calculated as a percentage of your home’s appraised value.

2. The higher your home is appraised for, the more money you can borrow for your income property.

When refinancing, homeowners can borrow up to 80% of their home’s appraised value, minus the amount that is left still owing on their mortgage. For example, if your home’s appraised value is $500,000 and you have $125,000 still owing on the mortgage, you can apply for a refinancing amount up to $275,000. (80% of $500,000 is $400,000, minus the $125,000 still owing). This is $275,000 you can put towards your income property.

3. A home appraisal company comes to see your home in person, which provides a more accurate appraisal for your lender.

Depending on the property, some lenders can tell when a homeowner has equity or not, without even having to step foot on the property. They use an automated system that computes enough of an appraisal for them to deem that you have equity you can access during a mortgage refinance.

However, if you’re looking for a more on the nose appraisal, an on-site visit by a certified real estate property appraisal company is recommended and make a difference of tens of thousands of dollars in your appraisal, and therefore how much capital you can access for your desired income property.

See: Home Appraisals vs Online Home Value Calculators

4. There are several things you can do around your existing property to better your chances of a high appraisal.

Again, the more your home is deemed to be worth, the more capital you’ll be able to access to purchase a second property. To get the highest appraised value possible, you might have to work with your appraiser a little bit to make sure they have all the details they need to complete a fair assessment. For example, be sure to point out any renovations, additions, or value-added features to the home. Pointing out these items to the appraiser should be done in addition to Doing These 8 Things to Increase Your Home’s Appraised Value.

5. When you receive an appraisal that was much higher than you expected, you don’t have to borrow the maximum 80%.

As mentioned above, you can borrow up to 80% of your home’s equity to put towards your rental property, but that doesn’t mean you have to take the full 80%. It’s up to you when it comes to what amount to borrow. Take only what you need!

On a similar note, you don’t have to spend the borrowed money right away. When you access your capital and your refinancing is completed successfully, you’ll receive a cheque with the amount of money you’ve decided to borrow, which can be put into a savings account until you are ready to buy that perfect investment property. So, there’s no need to rush into anything, but it can be a nice comfort in knowing you have the highest amount possible ready to go when needed – achieved through a top-notch property appraisal.

Contact D. Fritz Appraisals at 250-413-7319 to book your next appraisal in Victoria, BC. We offer the fastest turnaround time in the region and can often deliver an appraisal within 24 hours. specialize in real estate appraisals for all situations, such mortgage refinancing, new construction, division of assets, and estates.

 

landscaping improves the value of your home

8 Ways to Increase the Value of Your Home

Doing These Eight Things Will Help Increase Your Home’s Appraised Value

Looking for ways to increase the appraised value of your home? There are many things you can do to boost its overall value.  The biggest things determining the value of your home are its location, its size, and the current market conditions. While these three factors are out of your control, there are still many things you can do to impress appraisers and list your house for top dollar.

Before you go spending thousands of dollars in renovations, however, make sure you follow this advice from the outset.

  • Create a Budget – Do your research and come up with a realistic budget and do your best to play within it. You need to be careful that what you spend on renovations is less than the potential increase in value of your house.
  • Keep Careful Records – Every trip to the hardware store adds up, so write everything down, keep receipts, and make note of any warranties you get. This information will help you impress the appraiser as well as prospective buyers.

Now that you’ve got the “bookkeeping” out of the way, here are 8 things you can do to increase the value of your home.landscaping improves the value of your home

    1. Consult pros along the way – Ask your real estate agent, your contractor, or even the owner of the paint store for advice along the way. It’s often free!
    2. Book a Home Appraisal – Hiring an accredited appraiser at the beginning can help you understand what your home is worth in its current condition. It can also help you qualify for a home equity line of credit for larger projects.
    3. Consider Your Neighbourhood – Check to see the listing prices of homes in your neighbourhood before getting too deep into a renovation. The neighbourhood will dictate the upper limits of what you can realistically expect to sell your house for. This ultimately affects how much money you should invest in improvements.  For example, fancy fixtures might be over the top and quickly eat up the budget without adding any value to your listing price. You might not get back the cost of those $1,000 lighting fixtures. Likewise, a prospective buyer won’t be willing to overpay for your property just because it has a sauna.
    4. Enhance Your Curb Appeal – A house that looks well taken care of from the outside can impress appraisers and prospective buyers alike. Enhancing your home’s curb appeal includes things like:
      Cleaning the roof: Get rid of that overgrown moss. For most houses, it’s not a charming look.
      Repairing the roof: Attend to roof repairs. A roof in poor condition will be flagged during a home inspection, allowing people to low ball or withdraw their offers.
      Fixing the fence: Fix your fence if it needs fixing but note that adding a fence where there wasn’t one there before might cost a lot without adding value.
      Power wash: A thorough power wash can quickly revive patios, driveways, and paths.
      Lawns: Keep the grass green and trim.
      Landscaping: Weed the garden, trim the hedges, and check with your municipality about removing hazardous looking trees.
    5. Fix the Small Details – Inside, a lot of small fixes can add value. Things like leaking faucets, noisy bathroom fans, cracked windows, holes in the walls, burned out lightbulbs, carpet stains, and aging or outdated electrical fixtures can make your home seem like it needs a lot of work, thereby reducing its value. So, take care of these easy fixes.
    6. Fresh Coat of Paint – A freshly painted house will clean and brighten everything up. Pick neutral colours, shop around for reliable painting companies, and be amazed at how quickly your value has increased.
    7. Make It a Smart Home – Adding a few “smart” features to your home can add a touch of modern tech and appeal, without costing a lot. Consider installing Wi-Fi-enabled thermostats, doorbells and other gadgets to increase appeal.
    8. Kitchens & Bathrooms – In many cases, a kitchen or bathroom reno can increase the value of your home. But proceed with caution because these types of projects can end up costing more money than what they add to your home’s selling price.

Every home is different. A kitchen renovation might make sense in one home, whereas in another house, adding a second bathroom instead of replacing the kitchen might make more sense.

Sometimes you can avoid going the whole nine yards and can get away with just swapping out the appliances and adding a fresh countertop. Make kitchen and bathroom renovation decisions wisely and consult an expert before you begin ripping out cupboards and bathtubs.

To learn more about the appraisal process and what appraisers look for when they visit your property, contact D. Fritz Appraisals – your Victoria, BC property appraisal experts servicing Vancouver Island and the Gulf Islands.