Are you looking to purchase a home? Exploring your real estate options in Vancouver, Surrey, Kelowna, or elsewhere in BC? Whether you are looking into buying a summer home in the Okanagan, or purchasing an investment property in the Lower Mainland, it’s best to do your research and understanding the 5 main areas that affect real estate prices. Let’s take a look!
Location, location, location. This is one of the most significant factors which influence the price of real estate in BC. You could be looking at purchasing a property in a certain neighbourhood of Vancouver or Surrey, or perhaps a summer property in Kelowna or Vernon, but essentially – the more desirable the location, the greater the value and pricing. As you assess the location of real estate, it is important to factor in amenities, appearance, centrality, along with potentials for development and expansion. It is often said that value-wise you are likely better off having and average house in a great location, than having the best house in a poor location. Further, location is one of the most determining factors in resale value and ability. Property location creates desirability, and this desirably creates an unwavering demand for such real estate.
Supply & Demand:
The amount of supply vs the demand for housing will certainly affect the price of real estate in BC. As previously stated, location creates desirability, desirability creates demand, and this demand raises property prices. The lack of the availability of desirable property will also affect prices in the area. The fewer the number of desirable properties, the more expensive and valuable they become. The opposite is also true. If there are too many properties available to purchase in one particular location, the prices will tend to weaken.
A strong economy is extremely important in stimulating the real estate market. If the economy is strong and the overall feeling is positive, the market activity will be positive, and this should push prices upward. On the flipside, if there are negative or doubtful feelings of the economy, this will seemingly lower the price of real estate.
This segment would include many of the property taxes buyers or investors may be challenged with. High property taxes, property purchase tax, capital gains tax, speculation tax… all may be compounded and affect property values negatively. These taxes will not only affect prices, but the overall market activity in certain areas. Generally, taxes play a large deterrent for many real estate buyers and investors, as they can become quite expensive.
Shift in Population/Demographics:
If a certain location has plenty to offer, such as amenities, industry, infrastructure, natural beauty and opportunities, there will be a desire for residents to settle and remain. This attraction of residents will certainly fuel demand and the upward push of property values. Conversely, if there are economic woes and industries move or close down forcing folks to leave, this will affect property values negatively.
There are other factors which may affect the price of real estate in BC and these would include: borrowing interest rates, rent controls, vacancy levels, seasonal factors, public perception, and the type of government party currently in charge. If you are a current homeowner looking to purchase a property or are looking for a private mortgage loan and are located in Vancouver, Surrey, Kelowna, Langley, Victoria, or elsewhere in BC, apply now for a free quote or call us today at 604.620.2697. We’d be happy to help you understand your options.
Silver Hill Blog
Jim Horvath is the principal broker and director of Silver Hill Mortgage Corp., arranging mortgage loans for over 25 years.