All levels of government are taking steps to tackle the problem. Limitations have been imposed on short-term rentals, taxes have been levied against empty homes and new legislation is on the way in BC to tax profits on properties owned for less than two years. All of this leaves investors in a tricky position.
That said, property prices are still rising and homeowners stand to make a profit when they do sell, especially if you live in your home for several years first. So how do you choose a home that will be an investment in the long term? What’s more important - the location or the construction?
To guide you through the process, we compiled some tips for investors from the cast of RealTours Season One, expert agents who know Greater Vancouver’s best neighbourhoods.
Investing in the future.
As of February 2024, British Columbia's average home price increased by 10 percent year-over-year to $958,000. Even with recent high inflation impacting the cost of living, most homeowners are seeing a return on their original investment.
Not all communities are created equal, however. Victoria’s average home price has only increased by 3 percent year-over-year, compared to a 13 percent increase in the Fraser Valley. So choosing where to invest in property is as important as deciding what type of home to buy.
To explore what’s on offer for property investors, we spoke with a pair of top agents from the cast of RealTours: Jesse Dean Cook from West Vancouver and Vincent Lim from Richmond.
West Vancouver
Investing in West Vancouver makes sense because the city is hemmed in by oceans and mountains. Property prices are high here but they have also stayed high, meaning a loss is unlikely (although never impossible).
“I think property values in West Vancouver will continue to rise over the years,” says Cook. “A number of factors are there: scarcity of places along the waterfront, scarcity of lots with amazing views. I think along arterials and busier streets we're going to see more townhouses and low-rises built to bring more people into the community.”
Seaside neighbourhoods like Ambleside and Dundarave are seeing that growth in luxury condos and townhomes mentioned by Cook. Further up the mountain, the under-development Cypress Village also promises to bring much needed supply to the West Vancouver market.
For investors looking to rent out their properties, the median rent price in West Vancouver is around $6,200, 111 percent higher than rental properties across the inlet in Vancouver.
Richmond
Anyone flying into Vancouver’s airport can see the high amount of growth in Richmond. Cranes dot the skyline as more and more condo towers rise from the ground. With great Skytrain transport links, the city is becoming increasingly popular with homebuyers and renters.
The pre-sale market is huge here, offering buyers a chance to secure a brand new property without having to pay the entire deposit up front. But there are risks in this approach - developments have been known to stall, leaving buyers stuck without a home to move into when they originally expected it.
That’s one reason why Lim has advised clients to consider buying an existing home, at least in the current property market.
“Right now, pre-sale is marked up pretty high, in my opinion,” he says. “If you can find something that's a little bit older, closer to a transit, in a good area that’s developing in potential in the next five to ten years, that will probably be a good place to put your money in.”
Buying an older property also means you avoid paying 5 percent GST on the purchase price, something you have to factor into a pre-sale home. Plus Lim says you have a better idea of what you’re going to get with something that’s already been lived in.
“Until you live in a building for three or four years, you might not see what the problems are,” he says. “Everything's a risk, right? Let's just say you buy something that's older, five to ten years, you know how the buildings run, you know the strata, and you know about the common problems in a building.”
Expert Advice
Wherever you choose to start your search for your next home, you’ll need to be prepared for the process. While the RealTours agents might have their favourite neighbourhoods, they agree on some key advice for investors: pick a location that will be in demand in the years to come. Whether that’s in a well-established community like West Van that doesn’t have much more room to grow, or in a booming city like Richmond with up-and-coming neighbourhoods, there are great options for investors across the region.
For more tips, take a look at our ultimate checklist for buying a property in Canada.
