Kitsilano Real Estate Market Update for February 2018

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What’s Happening in Kitsilano’s Real Estate Market

Hello Kitsilano! It’s February and time for our new market update.

 

January is typically a slow month as inventory starts quite low and Buyers haven’t quite gotten organized enough to really jump into the market, especially with the new mortgage rules making everything a bit more complicated.

 

The lending environment has certainly gotten tougher for Buyers over the last few months. Not only is the stress test now implemented for every Buyer, but a variety of rules have changed regarding a ton of different faucets of the mortgage market. What this means is that you need a really smart and creative mortgage broker on your side – someone who understands your options and how to explain them to you.

 

Interest rates are on the rise (as reported by those in the know – they expect a few small increases throughout this year) and the new NDP Government is expected to release their new budget in the next couple of weeks. They have mentioned that they’ll be focusing on speculation, fraud and a focus on helping the middle and lower class. Ironically, the new Federal mortgage rules make it harder for the middle class to afford property (those stretching to afford their first or second home have had to drop down a peg in affordability, while the wealthy weren’t as affected since they have a bit more money to play around with) so it’ll be interesting to see how they can help the middle class, beyond pushing to build more “family” sized homes. My main concern is how they’re going to deal with speculation and even foreign investment. Rule changes around speculation and foreign investment may include further taxes or rules making it tougher to purchase, but we’ll have to see what they announce and how this may affect investors or the higher end market. It’s always tough to predict how the market will react and whether it will be more positive/negative to Buyers or Sellers, so if you’re curious give me a call to chat about your particular situation: 778-387-7371 or [email protected].

 

Overall, the new mortgage rules seem to have affected the higher end market more than the entry level condo and townhouse market (in part because the stress test for Buyers with less than 20% down was implemented last year) so we have seen a bit of a slow down when it comes to properties above $1-million.

 

Onto the numbers… the stats are based on January’s sales, and unfortunately there was only 1 townhouse sale the entire month and only 3 detached sales, so that will certainly skew the numbers. We saw 17 condo sales, which allows for a bit of an average, though it was still a low number of sales compared to a busy month.

 

Scroll down for graphs of the market stats!

 

Kitsilano Condo Market Update:

 

The Kitsilano Condo Market had a sales to active ratio of 59% last month (a Seller’s market), despite having much lower than average inventory. This shows that the Buyers are still out there looking to get into the market. The price per sqft was $971/sqft with an HPI price of $640,100. Both price indicators have been steadily, and ever so slightly increasing over the past year, and with all the changes, I don’t expect to see any major spikes in average pricing, especially with the East side still lagging behind Kits in price. There are 29 condos for sale in Kitsilano right now (14 one bedrooms, 12 two bedrooms and 3 three bedrooms). Last month, we saw 14 one bedroom sales and 3 two bedroom sales, so the market in Kitsilano is busiest in the most affordable price bracket (one bedrooms average about $629k while two bedrooms average about $850k).

 

Kitsilano Townhouse Market Update:

 

Like I mentioned above, there was only 1 townhouse sale in Kitsilano in January 2018, and as of now, 11 current listings. The average price of these listings is $1,562,965 with an average interior square footage of about 1300sqft. I don’t expect this market to see a huge increase in inventory over the next few months, but I do expect Buyers to have a little more negotiation room. For Sellers, ensuring your property is properly marketed and represented during negotiations, so contact us to chat about how we handle our sales.

 

Kitsilano Detached House Market Update: 

 

The detached house market in Kitsilano is showing an HPI Price of $2,399,600, a number which has been dropping slightly since September.   The new mortgage rules have affected this market the most, and with the East Side still significantly cheaper than Kitsilano, a lot of Buyers are considering other neighbourhoods. However, there are, and always will be, Buyers who’s focus is to live in Kitsilano and enjoy the benefits that only this neighbourhood can offer. The sales to active ratio was 7.3%, which is a Buyer’s market. There are 41 active detached house for sale right now, which is low, but normal for this time of year. It’s increased since December and I expect it to keep increasing through the Spring (when Kitsilano really shines).

 

If you haven’t spoken with a mortgage broker recently about your affordability, do so (we have some great people to suggest if needed – just contact me)! In addition to the new mortgage rules, rates and rising slightly and you need to know what to expect, and if they’re anything you can do now to prepare to purchase a property. I can almost guarantee that you’ll be surprised in how accessible your next property can be if you’ve built some equity in your current property.

 

Don’t hesitate to give me a call (778-387-7371) or email ([email protected]) if you have any other questions on buying or selling in Kitsilano, or the market in general.