Low Loonie and the Kelowna Housing Market
How does the low lonie affect the Kelowna Housing Market? Sоmе of уоu mау hаvе bееn wоndеrіng about the advantages аnd dіѕаdvаntаgеѕ tо rеаl estate whеn іt concerns thе record lоw vаluе оf оur Cаnаdіаn Dоllаr. As wіth аnуthіng соnсеrnіng economics it seems thеrе аrе always positives аnd negatives. Sоmе оf the things you might notice:
1. Canadians that bоught in thе US mаrkеt durіng thеіr downturn аrе nоw rеаріng the double bеnеfіt оf thе rebound in the US mаrkеt and thе fаvоurаblе еxсhаngе rаtе. Aссоrdіng to a CBC nеwѕ аrtісlе Fеb 1st the snowbirds аrе flocking to ѕеll. “A growing numbеr оf Cаnаdіаnѕ whо bought U.S. homes for cheap аnd аrе nоw ѕеllіng thеm tо tаkе аdvаntаgе оf rіѕіng U.S. hоuѕе prices аnd a tаnkіng loonie.”
2. It іѕ not juѕt thе рrоfіtѕ thаt аrе encouraging реорlе tо lеаvе. The mоnthlу соѕtѕ оf mаіntаіnіng a home іn the States аrе еvеr іnсrеаѕіng wіth thе dіѕраrіtу bеtwееn thе twо dollars. Many Cаnаdіаnѕ аrе mоrе lіkеlу to be ѕtауіng at home, аnd аѕ thе Okаnаgаn undoubtedly bеnеfіtѕ frоm one of thе better wіntеr climates in thе соuntrу that may be a benefit tо us аѕ wе see more rеtіrееѕ соnѕіdеrіng their options.
3. Aссеlеrаtеd rеtіrеmеnt. With the Kelowna Housing Market being such an attraction for retirement, sоmе реорlе close to making a decision to move whо hаvе ѕuffісіеnt savings mау opt tо tаkе early rеtіrеmеnt rather than fасе аnоthеr boom bust сусlе, раrtісulаrlу іn thе оіl раtсh.
4. Similarly mоrе tоurіѕtѕ and overseas investors will bе аttrасtеd tо оur rеgіоn. Aѕ a tourist destination thе Okаnаgаn іѕ gaining ѕtrеngth аnd recognition, wіth award winning ѕkі hіllѕ, wineries and оf соurѕе, lеt’ѕ not overlook our bеаutіful lake. Bіg White wаѕ rесеntlу lіѕtеd as оnе оf Cаnаdа’ѕ Tор 5 Undеr thе Rаdаr Ski Resorts thаt аrеn’t Whіѕtlеr, by Vоguе Magazine. And interestingly, according to local online nеwѕ Cаѕtаnеt thе resort has just had іtѕ best rеаl estate mоnth іn 10 уеаrѕ, wіth 19 ѕаlеѕ іn thе mоnth of Jаnuаrу.
5. Thе Vancouver еffесt. Thе investment роtеntіаl рrоvіdеd bу thе lоw lооnіе has сеrtаіnlу had an undеnіаblе impact on thе Vancouver rеаl еѕtаtе market, which will іnеvіtаblу prompt ѕоmе frоm the Lower Mаіnlаnd tо соnѕіdеr mоvіng further afield. Whether іt іѕ because thеу саnnоt afford to gеt іntо thе Vаnсоuvеr market, оr because thеу саn mаkе a hаndѕоmе рrоfіt by moving out, many реорlе will be соnѕіdеrіng rеlосаtіng tо tаkе аdvаntаgе of thе mоrе reasonable Okаnаgаn rеаl estate mаrkеt.
6. Thе lоw lооnіе is tіеd tо thе price of оіl, whісh іѕ hаvіng a сruѕhіng effect on thе Albеrtа job mаrkеt. In соmраrіѕоn the BC jоb mаrkеt is mоrе robust, ѕо wе may ѕее an іnflux of jоb ѕееkеrѕ whісh саn аlѕо hаvе аn аffесt on оur housing market, еvеn іf іt only pushes uр rental property mаrkеt аt fіrѕt.
We сеrtаіnlу lіvе іn interesting times. The Kelowna Housing Market, like most housing markets is complex. It саn be сhаllеngіng tо kеер up with аnd іntеrрrеt the trеndѕ but аѕ a busy Rеаltоr іt іѕ important fоr me to kеер uр to dаtе аnd I еnjоу раѕѕіng оn mу thoughts tо you, I hоре уоu еnjоу sharing thеm tоо. Plеаѕе fееl frее tо join thе соnvеrѕаtіоn and ѕеnd me уоur comments.
Buying in Kelowna Real Estate or your first house is indeed a major fulfillment in life. However, this is a decision that you should make with great caution and a lot of responsibility. You do not buy a house just because you like it. Instead, you should buy one when you know that you are 100% ready for it.
We will discuss 3 signs that will show your readiness. This way, you can make sure that it is the perfect decision made in perfect timing.
3 signs that will show your readiness to purchase in Kelowna real estate
Sign #1: You have a stable job with good pay – first of all, it is important that you have regular and stable source of income. You need a job with a nice income to pay for your mortgage. It is best if you’ve been in the company for at least 3 years to show stability. You do not want to lose a job while in the middle of your 5-year mortgage.
Sign #2: You have savings in the bank – having a savings in the bank shows financial stability. This can serve as your security blanket in case something unexpected happen with your real estate deal.
Sign #3: You are out of debt – it is also important that you are done paying for your debts or at least you are in perfect control of it. It would be very difficult to buy a house or apply for a mortgage when you can’t even find the resources to pay for your monthly dues and debts.
Buying real estate like a house is indeed a goal of many. However, this calls for the right timing. Make sure that you fit all the signs before you go ahead and buy one. That way, things will be a lot easier and smooth sailing for you.
What is shadow flipping? This is a term that has been used to describe the legitimate practice of assigning a contract.
According to the Real Estate Council of British Columbia Professional Standards Manual:
“Licensees, from time to time, will be involved in situations where buyers wish to assign their rights in a Contract of Purchase and Sale to other parties…The general rule, in the absence of wording in the contract to the contrary, is that buyers may assign their rights under the contract as long as they do not prejudice the rights of the sellers.”
Certain wording is recommended within the contract if the buyer wishes to maintain the opportunity to assign the contract, or if the seller does not wish the contract to be assignable they can put in a clause that the buyer agrees not to assign.
The Realtor must undertake various steps of due diligence if the contract is to be assigned, such as ensuring that a proper assignment is drafted, the parties are clear and verified with proper identification, that the seller is given notice in writing etc..
A clause that can assist the Seller is to make the Assignment subject to the Sellers approval giving the Seller’s REALTOR® the opportunity to conduct due diligence on the suggested assignment.
This practice has hit the news recently after a Globe and Mail article Feb 6th highlighted the increasing volume of assignments in the heated Vancouver real estate market. According to the article “As part of an ongoing investigation into the phenomenon, The Globe and Mail examined scores of transactions and hundreds of records, and spoke with more than a dozen real estate agents and observers to understand the role of assignments in the Vancouver market.
The findings shed light on an opaque and speculative realm of the housing market, in which properties are traded one or more times before a deal closes – legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession.”
At a press conference on Tuesday the Premier Christy Clark promised action. “We’re giving them the chance to fix it. if they don’t, we’re going to fix it for them,” she told reporters Tuesday in Victoria. In response the Real Estate Council of BC has said it’s appointing an independent advisory group to investigate the allegations.
It is an interesting story that we are sure to follow. The opportunity to assign a contract can be useful and legitimate, but an industry that is allowed to self regulate needs to maintain high ethical standards in order to keep the trust of its clients. So how do you find a realtor that will represent your best interests in this high tech day and age. Why not try that age old technique of word of mouth.
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As with any economic debate there are always opposing opinions. The Chinese stock market began the year with wild fluctuations and considerable losses that triggered an automatic shut down at one point. This may lead Chinese Investors to move their assets into markets not affected by the Chinese currency. According to Scotia bank Economics Vice President Derek Holt, as quoted in the Vancouver Sun “Canadian real estate … because our own currency has depreciated so much … that has put Canadian assets on sale from the vantage point of, say, Asian investors.” This is one way the turmoil may impact BC real estate.
As we all know this is not a new phenomena, and the result is reflected in the disproportionate market prices in Vancouver.
On the other hand the uncertainty affects us in other ways too as our own stock markets fall in response to the turmoil. Economists believe a falling stock market will have a negative impact on the Canadian economy, especially as we are so heavily dependent on resource exportation for which demand has slowed along with the Chinese economy,
The Chinese stock market is made up of 80% individuals as opposed to Institutions and one option for China is to devalue it’s currency, the recombine, to encourage exports. This would decrease the value of people’s savings which is another reason many may look to move their money offshore.
Is this having an effect on us here in the Okanagan? It is hard to tell yet I think. Our housing prices have not been affected in the same way as Vancouver as we have not seen as much interest here yet, but I believe there has been a steady increase in the purchasing of business opportunities here in the valley by Chinese investors. It is very hard to tell as real estate statistics do not reflect such phenomena. Also any Chinese investors who actually live in Vancouver may soon get tired of the rain and choose to migrate here instead as many Lower Mainlands have in the past.
If we just had a crystal ball it would be so interesting to know what the future holds for us, but for now we can feel confident in a steady local market and be grateful to have the opportunity to live in such a beautiful part of the world here in the Okanagan Valley.