Victoria Real Estate Update – Fall 2016
Government Intervention – Good or Bad?
Wow! The Canadian and BC Governments are sure getting involved with the real estate market in Canada this year, with the intent to try and make real estate more affordable, help Canadians stay in a safer debt range, and to bring in extra tax revenue. The ultimate looser in all of this so far it seems has been the first time buyers and the under 20% down buyers across Canada that have just been stripped of about 20 percent of their buying power with the latest government intervention for mortgage approval guidelines. So not only has the top end been affected greatly in the lower Mainland with the tax on Foreign buyers, but the entry level starter markets across Canada have as well. The jury is still out on the overall effect of these changes, but my guess is that we could see a slowdown of sales in Victoria, and a possibility of some price drops over the next few months.
The government has made 3 significant changes that have affected the Local markets. One being the recent flipping rules, another being the tax on Foreign buyers in Vancouver, and the latest being the new rules for qualifying for a mortgage. The Victoria market and its price increases so far this year have been heavily buoyed by the Vancouver buyers that were moving to Victoria in the spring and summer due to the high prices these buyers were getting for their properties in Vancouver. The latest statistics have shown an incredible slowdown in Vancouver over the last 4 months, which has contributed to a slight softening of our market recently, and due to all of these government changes, this trend could continue over the next few months, and result in some price decreases in the Greater Victoria area. The latest statistics at the end of this month should be a good gauge as to where the market might be going. It appears that we may see a slight drop with average prices in the coming months. It is very hard to predict however, so it will be interesting to watch the market.
The Vancouver market has definitely been affected by these Government changes already, as sales have spiraled downward, and prices are now lower in some areas compared to the peaks in the spring of 2017. Victoria has seen a lot of Vancouver buyers this year, but it will not surprise me to see this segment of the buying pool start to slow down throughout the remainder of 2016. However, the local Victoria market is still strong, and we may not see any significant effects in Victoria for a number of months.
But for right now, it is still a great time to be a seller. Inventory is low, and prices are still at or near record pricing in most regions. If you are a buyer, interest rates are still great. Just make sure you watch the market, and buy only what seems like a good deal, and don’t over extend yourself by getting caught up in multiple offer situations in case prices do start to come down a bit. There have been economists predicting a 10% drop in local prices over the next year. Though I am not sure about that one, with the government so willing to jump in and interfere with the market, who knows where prices might go. My guess is that we should not see any significant price drops in the foreseeable future, but we should expect to see a slowdown in sales. A lot of that is due to the time of year as well, as sales usually slow as we get closer to the end of the year. The sales numbers for October will still be good, but not at the record pace we experienced throughout the spring and summer months. The remainder of this year should be interesting indeed. Stay tuned…
Here are a few links to various real estate sources that may be of interest to you:
1. Up-to-date real estate information on my Facebook page: VictoriaBCProperties
2. Latest Website Newsletter: Newsletter
3. Latest historical statistics from the Victoria Real Estate Board: VREBStatistics
4. Search for Victoria Properties at my website: www.DaleSheppard.com
All the best to you and your family, and enjoy the rest of this great summer!