TGIF: Unintended consequences!

TGIF: Unintended consequences!

I, Sheila, have just returned from holidays travelling through the UK in places big and very small, then a bucket list stop in Malta. Nowhere did I mention being a realtor, yet the chief topic of conversation everywhere was real estate – no affordable housing, cost of land & building and unwanted densification.

Sound familiar? In most instances the efforts of Government to turn the tide, curb foreign ownership, create “affordable housing” not only to a large extent failed, but also had those unintended consequences we are experiencing here. London’s vacant homes tax is now laughingly referred to as the “table and chairs tax” as placing furniture in the homes ducked the tax! While travelling we realize the world is getting smaller – investors don’t have to buy in London, Paris or Vancouver – they can go wherever it is most advantageous.

Tourist cities like Vancouver and Valletta in Malta are victims of their own success and need the accommodation for increasing numbers of visitors as well as those who want to stay permanently – therefore growth on the waterfronts etc. When the largest percentage of our economy is tied into real estate and tourism, we had better have a back up plan if we kill the goose laying the golden egg. The by-product and unintended consequences of Government intervention in our free market place has not only accomplished what was intended, a market slow down, it has also affected every aspect of the spin off work created by real estate sales – construction, furniture sales, engineers, architects, building material sales on and on.

Affordable housing can be created only by building purpose built rental units and subsidized housing. And guess what? The latest round of new rules from the Government to reduce the amount landlords can increase the rent, regardless of the price paid for the real estate, has caused two new rental projects to be cancelled. Unintended consequences again. Yes, it is complicated, but we need more than knee jerk reactions to public outcries – we need the obvious, and the creative, approaches to solutions. A person running for election in West Vancouver was honest enough to say that West Vancouver had never been an “affordable” place to buy a home. This is true of Vancouver itself and the reason we all raised our families in the suburbs. We are all wearing rose coloured spectacles when discussing the “good old days” when it comes to real estate. Let’s ask some serious questions of our municipal candidates this local election and hold our provincial representatives to account. We all need a robust economy.

From the trenches, the news is hopeful as our market stabilizes after 3 months of the slowest sales in a decade. Sellers are gradually coming to the realization that 100 days on the market means their price is too high. It takes time for a market to settle as no one loves the idea that their home is worth less than last year or the year before at the peak – we embrace rising prices much more readily! As reality sets in, reasonable asking prices are appearing along with sold stickers. Buyers are willing to jump in to avoid the next mortgage interest increase provided that the price is right. As first time buyers successfully navigate the financing rules, we’ll see the ripple effect upwards. There are always those who are transferred or who have other good reasons to move who will set the bar and price for their homes, so discerning buyers can make an excellent purchase.

Luckily we have been around these changing markets before and are here to keep you covered and see you safely through the process one step at a time. Happy to talk real estate with you any time with no unintended consequences, except good ones!

We are the Generations Real Estate Partners – Michelle, Scott, Sheila, Ray & Shane.

Continuing a tradition of trust and care.

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