Many changes occurred in 2016 affecting real estate in BC. The big story concerned astronomical increases in home prices within the Greater Vancouver area and much discussion about the influx of foreign buyers.
Since the 1970s an influx of wealthy immigrants, largely from China, has pushed pricing sky high due to speculative buying stemming from the view that real estate has long been considered a safe investment. The various levels of municipal, provincial and federal governments implemented a variety of changes affecting the real estate industry in 2016. Perhaps the most surprising and controversial occurred in August with the imposition of a 15% foreign buyer’s tax solely for the Greater Vancouver area. Subsequently it seemed to have had the desired effect of slowing the influx of foreign buyers into that market. However, the impact was felt in other areas of BC such as here on mid-Vancouver Island as well as the Sunshine Coast and the Kelowna regions. For instance, fewer sales in the Lower Mainland resulted in about a 30% reduction in sales in the mid-Vancouver Island area following the imposition of the new tax. Additionally, the City of Vancouver imposed a 1% tax on empty homes in an effort to further slow that overheated market in terms of international demand.
A further tax on luxury homes has been implemented in BC with the Property Transfer Tax. The rate is set at 1% tax on the first $200,000, 2% on the balance up to $2M and now an additional 3% tax on the balance over $2M. However, new homes are now completely exempt from the Property Transfer Tax if the purchase price is less than $750,000 on less than 0.5 hectares or 1.24 acres for qualified buyers.
Also for first time home buyers who qualify, there is exemption on the BC Property Transfer Tax. The limit is now a $425,000 purchase price on a home registered before 2014 or less than $475,000 if the home was registered after 2014. New mortgage rules in 2016 permit a deposit of 5% down on homes priced under $500,000, 10% down on homes priced $500,000 to $1M and 20% down on homes priced over $1M.
Due to a robust real estate market and increased pricing throughout British Columbia, the BC Assessment Authority has raised home values considerably for 2017 taxation, based on market values as of July 1, 2016. For instance, Qualicum Beach is up over 15%, Parksville is up over 12% and the adjacent rural districts are up over 10%. However, Greater Victoria has reported increases of up to 40% and even 50% for some areas of metro Vancouver. So in 2016 we’ve seen municipal, provincial and federal government involvement in regulating the BC real estate industry.
2016 Qualicum Beach, Parkville, Nanoose Bay & Area Market Summary
The average sale price of a single family home in the local area for 2016 reached $482,475. This represents an increase of 19% over the previous year. The sale price of a patio-home style of condominium is now $314,224 representing an increase of 5%. Building lot average sale price of $207,143 is an increase of 10%. Low inventory and high demand pushes real estate sale pricing higher. December of 2016 compared to December 2015 shows a decreased inventory of single family homes, patio-style condos and building lots by 44%, 61% and 48% respectively. Due to a higher sales volume in 2016, our inventory of active listings needs some time to rebuild.
The average days to sell a single family home here during the month of December was 28 days compared to 71 days a year ago...faster by 60%. The list to sell ratio of 97% compares to 96% of last December. Some well-priced homes are still selling within a couple of days though and often with multiple offers, largely due to a lack of inventory. Overall for 2016, compared to 2015, the number of single family homes sold is up by 15%. Overall sales dollars were up by a whopping 37% in 2016 due both to a significant rise in prices plus more of the higher-priced homes sold as well. It's been a very strong sales year.
This year we have seen a large increase in the number of people 'cashing out' from what was an extremely heated Lower Mainland market and buying over here. For many, it's time to escape that crazy Lower Mainland traffic. The difference in real estate pricing between here and there is huge! Sell there if you can and buy here for much less. That's the big win! Plus the quality of life here is so very good. Hiking and biking trails are everywhere and it's a golfers and gardeners paradise over here! Events in our local small towns wouldn't be what they are without the level of enthusiastic volunteerism that exists. So come join in and get involved!
Where did Tom’s buyers come from in 2016?
42% from Victoria, Vancouver and Lower Mainland, 24% from the rest of Canada and internationally, 24% from within the same area and 10% from Alberta and Saskatchewan.
About 30% of buyers and sellers contacted Tom initially through the website www.tomwhitfield.ca which attracted about 24,000 visits in 2016 from about 80 countries. Over 85% of buyers start with a property search on the internet. Google is still by far the #1 search engine most often used. Tom’s website has been strategically designed and continuously updated to capture key word phrases typically used by buyers when searching for properties on the internet. The web is by far the most effective marketing tool.
Outlook for 2017
The year ahead looks quite promising for our local real estate market. We are somewhat insulated from other areas of Canada which are dependent upon manufacturing and resource extraction. The driving factors here are the tourism industry and retirees. The great grey wave of retiring boomers will continue to wash over this locale for quite some time to come.
We are only an hour and a half ferry ride or a 25 minute plane ride away from the big city of Vancouver for those who want to visit family and friends while perhaps taking in some of those world-class city amenities. Couple that with being a 2 hour drive from Victoria or Tofino and being located within a 'stone's throw' from the enchanting Gulf Islands and Discovery Islands for day trips, makes this a highly desirable place to retire to and enjoy life. That's the really big win! Call Tom!
Central Vancouver Island Market Statistics:
Remember, if you don’t see the listing you want on the website, please let me know and I will find it for you. Also, if you are coming out to house-hunt, please let me know ahead of time and I will schedule time to show you suitable properties. And a hearty THANK YOU to all my past clients. Remember, I am never too busy for the referral of your friends and family.