Happy Holidays 2020
Keep safe and healthy! As my final blog post before 2021 – Happy New Year!
Keep safe and healthy! As my final blog post before 2021 – Happy New Year!
The City of Kamloops offers a comprehensive website with various information services for residents. Often as neighbours and homeowners it is common to have lots of questions about your home and your neighbourhood.
Many of us are already familiar with the Waste Wise App which provides more details about recycle vs non recycle items, and customized reminders of your garbage collection day. A little less known information web service is the Property Information Portal, with public access to many details such as:
As a real estate agent, this property portal offers an abundance of information about the homes we are selling but also as a Home Owner I find myself returning over and over again. It is becoming easier and easier to dig out more details on your own than ever and want a great tool to have when you are just curious what type of development is being constructed down the road or that you, yourself never closed your hot tub permit!
Of recent there has been plenty of chatter in the media surrounding Strata Corporations or Strata’s across Canada, especially in BC where we have seen upwards of 40% increase in rates or 50% in the Vancouver area. It’s important to understand some common terms to fully comprehend what an insurance policy covers in respect to a Strata building or unit and the importance of those policies.
What is a Strata? In British Columbia, the word condo and strata are one in the same and often used interchangeably depending on whom you speak too. Often a strata unit is divided by walls, ceilings and floors within the same building as seen in an apartment building with common hallways, elevators, stairwells and entrance spaces. In a townhouse complex, strata units are separated by the walls and could be attached to one or more neighbors or none at all as often seen in a ‘bareland strata’ where owners own the building and specific set of land space with a common interest in the roadways and amenity spaces.
What is common property (CP), how is it different from limited CP (LCP)? Any area that is available for use by all strata unit owners is considered common property Examples of CP: entrance lobby, elevators, gardens, swimming pool and other recreational facilities. In some strata developments, certain areas are for the use of individual owners and are considered LCP. Examples of LCP: balcony or patio spaces that can only be accessed by that individual owner, the interior space of the garage etc.
The Strata Property Act legislates that the Strata Corporations are responsible for common property and strata unit owners are responsible for their individual units. For this reason, the insurance policy for strata unit owners and strata corporations are separate contracts with their own terms and conditions. The policy must cover the full replacement value of the buildings and fixtures, with increased construction costs and services this has pushed values to rise without any other circumstances.
In the event of a building fire or a visitor becoming injured on the property (fell on snow/ice) insurance would typically provide financial coverage to the Strata Corporation for loss or lawsuit. Condo insurance is more than just a policy guarding personal contents and liability; it represents peace of mind.
So what does the Strata Insurance Policy cover?
So why the increase? “Insurers are incurring losses mostly from minor claims (particularly those resulting from water damage) due to poor building maintenance practices and initial construction quality issues,” the interim report from the BC Financial Services Authority said, and added “there is not enough capacity in the strata insurance market to support future expected demand.”
Vice-president of the regulatory agency Frank Chong called it a complex issue with no easy solutions. “We recognize that there is a tremendous amount of pressure exerted as a result of the increase in strata insurance,” Chong said, added the agency gets a lot of questions and complaints from the public. “We believe that obviously that this particular issue will not be going away immediately. There will be continued pressure over the medium term.”
The increase of some of these policies are resulting in the increase of Strata Fee’s from a couple hundred up to a thousand dollars a year. A substantial amount that most owners are not prepared for, especially when some Corporations were completely unaware that there was trouble brewing.
In a press release, opposition critic for housing Todd Stone said the problem is getting worse. “The government cannot delay action on this issue any longer,” Stone said. “It is time to see the government take real steps to improve this situation and provide much-needed relief for condo and townhome owners around the province.”
In February, Stone introduced a private members bill proposing changes to the Strata Property Act, including a measure to clarify what issues a strata or owner are responsible for. The BC Financial Services Authority said it will be meeting with stakeholders over the next few months to gather input. A final report is expected sometime in the fall.
At this point, its all caution ahead for Home Buyer’s when considering purchasing a Strata unit. Until, the Province returns with their findings in the fall no one can anticipate what the short and long term outlook will be. With over 10,000 corporations in BC, failure to do anything will put a lot of pressure on the housing market and individual unit owners which will overflow onto the governments lap.
The real estate market here in Kamloops is now in full spring mode now, just a little later with some carry over into summer. When looking at the direct sales numbers, we had more sales in June 2020 than in June 2019, while not a huge jump of numbers it shows that while there was a short fall in early spring due to Covid, it was not a lasting effect for our market at least. Which is great news if you’re a Buyer or Seller here.
January 2020 we were right on target with 2019, February ’20 sales surpassed ’19, with a huge downward turn from March – May. While early spring we tentatively held our breathes unsure of how our market would respond, we can comfortably say we are rebounding.
From end of June last year to this year, we’re down a total of 300 sales directly within the City of Kamloops but listings were slightly down as well. For a couple months, Seller were cautious about bringing their homes to the market and rightfully so, but as BC Covid nunbers decreased we saw a stronger listing presence in June which so far has carried on into July.
In the month of July 2019, there was 239 sales (all types/Kamloops only), it will be interesting to see if we surpass that number this month with fewer residents travelling and temporarily putting home searches on hold.
Neighbourhoods with the most sales in May:
JUNE 2019 | JUNE 2020 | Year to Date | |
---|---|---|---|
NEW LISTINGS | 313 | 380 | 1647 |
TOTAL SALES | 213 | 218 | 902 |
AVG. RESIDENTIAL SALE PRICE | $439,882 | $508,064 | $460,092 |
AVG. DAYS ON MARKET | 34 | 59 | 55 |
ACTIVE LISTINGS | 703 | 843 |
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YTD | 2019 | 2020 |
---|---|---|
NEW LISTINGS | 1731 | 1647 |
TOTAL SALES | 1202 | 902 |
AVG. RESIDENTIAL SALE PRICE | $439,626 | $460,092 |
DAYS ON MARKET | 47 | 55 |
* Stats are for Kamloops area only, all types of housing as of July 6/20 *
The Canadian Housing Mortgage Corporation (CMHC) the largest mortgage insurance provider in Canada is making changes to their qualification rules. As of July 1, 2020 all high ratio mortgage applications or those with less than 20% down will have to comply to tighter qualification rules.
CMHC is noting that this change is as a result of the global pandemic and a means to reducing household debt and ensuring Canadians are not over extending themselves.
New Mortgage Rules:
It’s important to understand the difference between the two calculations as you need to be below both calculations in order to purchase a home.
CMHC is only one of Canada’s mortgage insurers. There are two private-sector options; Genworth Financial and Canada Guaranty Mortgage Insurance Co. Both have confirmed that they will not follow suit, noting that they feel the rules in place already protect Canadians. So if you are a purchaser already feeling the pinch – don’t fret yet. In the past when mortgage rule changes have been announced it has caused an increase of activity before the rules took effect. With everything that is happening already in our economy plus the one off approach that CMHC is having, activity here in Kamloops will remain relatively on track as the previous 30 days.
I think this time it’ll be a little bit less of a frenzy,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Typically, when CMHC changes their requirements, the other insurers follow suit. This time they didn’t, so I think this is going to create better balance heading into the summer.
In my experience, the reduced calculation won’t put a damper on our market. The majority of the time when working with Buyers, the maximum mortgage amount that was calculated wasn’t a monetary figure that the purchaser was comfortable spending. So while the calculations are in place to protect Canadians – if you’re ready to purchase a home you likely have a figure in mind that you are comfortable with… and often it’s less than what you can qualify for in the first place.
If you have more questions about the new rules and how it may affect your purchasing file, please contact your mortgage broker at the earliest possibility to discuss.
Don’t have a mortgage broker yet – contact me today for my list of recommended partners and get your home search started today.
Saying April was an interesting month would be an understatement! Between the world health crisis, murder bees and households turned school rooms – there was not much time for real estate it would seem. All jokes aside, this month compared to last year – no surprising numbers. Naturally year over year with all that is happening the number of house sales are down but price and days on market remained relatively close and unchanged.
Fewer sales has increased the amount of inventory available and with Buyers more cautious to pull the trigger seeing a creep up on the days on market.
Brock, Sahali and North Kamloops saw the most neighborhood sales; making up 40% of the total house sales. Those areas are primarily a good source of condos and townhouses which was the largest sale category overall across the city.
As we near the first half of the month of May we are beginning to see more confidence in the market with more sales and listings each day than the average day in April. So a good sign that while Sellers and Buyers slowed down to feel out the market end of March and April, the Spring market will return to normal – or at least a ‘new normal’ for us here in Kamloops.
As always, if you have questions about your specific situation or want to chat – feel free to give me a call direct. Indy Bal 778-220-4639
April 2019 | April 2020 | Year to Date | |
---|---|---|---|
NEW LISTINGS | 384 | 218 | 1071 |
TOTAL SALES | 252 | 66 | 535 |
AVG. RESIDENTIAL SALE PRICE | $431,736 | $428,482 | $440,214 |
AVG. DAYS ON MARKET | 45 | 53 | 51 |
ACTIVE LISTINGS | 803 | 1239 |
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*Information as of May 11/2020 – Kamloops region only/all types of housing*