What’s Happening with Housing Sales Across BC?
No one was surprised to hear reports on the decreased number of properties sold in December. Of course, sales are normally lower through the Christmas season anyways, but the seasonally adjusted numbers reveal a dramatically cooling market.
All the efforts by various levels of government have had an impact, and BC residents have mixed emotions, depending on their relationship to the market.
Would-be home buyers are not happy they lost 20 per cent of their purchasing power due to the federal government’s change to mortgage lending qualification rules.
Land lords are not happy they’ve been restricted to a 2.5 per cent rate of rental increase imposed by the Provincial government in 2019 despite costs that are rising faster than inflation rates. Last year, the BC government recognized that fact. They allowed landlords to raise the rental rates at 2 per cent over the inflation rate, or a total of 4 per cent. This year, they set allowable rent increases to match inflation.
“As a small-time residential landlord in Victoria, I have sold 5 of my rental properties over the past 18 months,” says P.D. (Phil) Wooster of First Island Financial Services Ltd. “That’s because of all the NDP new regulations that create headaches and make it most difficult as a landlord to obtain a reasonable return on investment, or evict a bad tenant, and which regulations provide the tenant disproportionate rights.”
On the flip side, renters are certainly happy they are not facing a potential 4.5 per cent rental increase, especially since many who are currently renting but want their own home now face a greater challenge due to the Federal government stress test.
Meanwhile, municipal government has been leveraging and acquiring new land and creating partnerships with private and non-profit organizations to bring new affordable units to market. And the provincial government has committed itself to substantial investments into affordable housing.
Government involvement is a mixed bag. Some people say the government(s) should let the market dictate, while others say government(s) are not doing enough.
Numbers never lie, so let’s look at the December sales numbers for a variety of cities and regions:
In Victoria, 7,150 properties sold over the course of 2018, 20 per cent fewer than the 8,994 sold in 2017.
The rest of Vancouver Island north of the Malahat saw 4543 units sold in 2018, which is a 19 per cent drop from the 5613 units sold in 2017.
The Real Estate Board of Greater Vancouver reported 2018 saw the lowest number of sales since 2000 with a year’s total of 24,619 detached, attached and apartment properties on the Multiple Listing Service, a 31.6 per cent decrease from the 35,993 sales in 2017.
Okanagan Central, North and Shuswap saw 370 units sold in December 2018, which is a 31.35 per cent drop over December 2017. They sold a yearly total of 8,325 units, a 20.4 per cent drop over 2017’s year total.
After seasonally adjusting the numbers, it’s easy to see the real estate sales juggernaut has the brakes on, and some areas, most notably Greater Vancouver, are seeing prices drop as a result. Can the rest of the province be far behind?
Mathieu Powell I President
Coastline Marketing Inc.
Main Office: 778-425-4644
Sales: 250-516-6287
mathieu@coastline.marketing
www.coastline.marketing