So there is an opportunity in the market now for first time buyers, families and investors.
A new selection of undervalued properties have recently become available with values more than 10% BELOW MARKET. If this sounds too good to be true, it's not. Here's why.
In an effort to increase the supply of more "affordable" housing, the provincial government has just introduced new legislation that prohibits long term rental restriction bylaws in strata properties. They have also said, any age restriction bylaws of less than 55+ are not enforceable.
With the introduction of this new legislation owners that live in rental restricted buildings are now able to rent their homes if the need to. Also, if they live in an age restricted building, with a restriction of less than 55 years of age, they are free to rent their home to anyone - no matter what their age. This is great news for families or younger adults who are looking to rent as these new rules should increase the supply of some much needed rental housing.
So where am I going with this?
Well strata properties with age and rental restrictions generally sell for less than non restricted buildings primarily due to the smaller pool of buyers that they appeal to. Buildings with rental restrictions generally do not appeal to investors and buildings with age restrictions prevent anyone below a certain age from buying them. When you exclude these two groups of buyers from a properties buyer pool the net result is less demand and therefore a lower sale price.
For example, if we look at condo sales over the last year in buildings built in the 80's and 90's in Greater Vancouver and compare the median sale price of condos with age and rental restrictions vs condos without these restrictions, we see an 11% difference in price ($650k for non-restricted vs $577K for a restricted building). Yes that's right! Condos without restrictions have an 11% higher median selling price compared to condos with an age and rental restriction. The spread in price is even larger at the moment for currently active listings.
The opportunity here is the highly probable increase in property values for these "restricted" buildings as their market values align with the non-restricted club.
If you're interested in finding out more and exploring current opportunities please reach out. I am here to help. Cheers.
Sources: BC Government; Sales data supplied by Real Estate Board of Greater Vancouver