Qualicum Beach Parksville Fairwinds Nanoose Bay & Area Real Estate Market Newsletter September 2018

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Up to Date Information & Insight into the Qualicum Beach Parksville Fairwinds Nanoose Bay & Area Real Estate Market

  • Photograph of Tom Whitfield
  • Parksville Qualicum Beach REALTOR®
  • Published: Sep 12th, 2018 at 3:35 pm

For an informative update on the current real estate market in the Qualicum Beach, Parksville, Fairwinds, and Nanoose Bay areas of Vancouver Island, listen to Tom Whitfield's radio interview, on August 25, 2018, on CKNW 980 AM MoneyTalks hosted by Victor Adair. Click Radio Interview for the full audio.

In BC, real estate property transfer tax revenue has exceeded the total of all tax revenues generated from mining, forestry, agriculture and hydro. Amazing but true! Recently, revenue generated from the sale of real estate has been reduced as the market cools. In BC, the housing sales statistics from April to June showed a decline in home sales of about 17% but home prices have yet to soften.

Locally, our real estate market has shifted from a strong sellers’ market to more of a balanced one. This is better for buyers and results in less stress during the home buying process. Our market has cooled somewhat during the late spring and summer months. In the previous two years buyers were almost always faced with a competitive multiple offer situation. This, however, is occurring less often now. Over the May/June/July period compared to 201, sales were down by 30%, the number of listings increased by about 30% and single family home prices rose by about 15%. Then in August, activity picked up with the number of single family home sales 6% higher and sales dollars 10% higher compared to August of last year. At the same time, single family home sale prices were up 3% to $604,254 with patio-home condos up 15% to $370,625. There were no reported sales of building lots in the region during August. Building lots are scarce and current inventory is low. It's important to price your property competitively given the shifting dynamics in the real estate market.

A great gray wave of boomers are retiring to the region. Retirement and tourism drive our local economy. In BC, real estate is the main topic of conversation second only to the weather and more recently the forest fires! The big real estate story continues to be concern about increases in home pricing in the Greater Vancouver area and how best to curb the impact of foreign buyers over there. Issues concerning affordable housing, densification and rentals (Airbnb) are other hot topics. Lower Mainland sales continue to net big returns for sellers who are then able to either downsize and stay on the Mainland or perhaps come to Vancouver Island and purchase real estate for far less money. Many boomers are then in a position to help their kids with a sizeable down payment thereby allowing them to enter the real estate market. Recreational properties are often purchased here by the aging boomers who want to escape the urban lifestyle and get out of that hectic traffic. Don’t forget that the new ‘speculation tax’ does not apply to the Parksville/Qualicum Beach area but does apply to other regions of BC. 

New mortgage rules have affected real estate in BC. In Canada, a more stringent mortgage ‘stress test’ took effect January 1st, requiring applicants to qualify for mortgage rates 2% above what they could otherwise get from their lender. This applies to all borrowers regardless of a 20% or 5% (CMHC insured) down payment.  Interest rates in 2018 have risen marginally and are expected to rise a bit more. The mortgage stress test has had an impact on buyers’ ability to qualify. I have read that 1 in 5 applicants are getting turned down for a mortgage.

In its budget delivered on Feb 20, the NDP minority government announced a variety of measures designed to reduce home prices primarily in the Lower Mainland. The 'speculation tax' is intended to stimulate rental availability. It does NOT apply to the Qualicum Beach /Parksville area but does apply to the City of Nanaimo. The NDP also increased and expanded the province's foreign-buyers (non-Canadian resident) tax from 15% to 20% of sales value and applied this tax beyond Metro Vancouver to other regions of the province. Changes to the Property Transfer Tax have also been implemented that will impact only the higher-end luxury properties. Again, the Lower Mainland is the target but the changes cover all of BC. Since 1987 when the average home price in Vancouver was $187,000, the PTT has been 1% on the first $200,000 and 2% on the balance. New measures in February included an additional 3% tax on the purchase price between $2M and $3M and 5% over that. Very few properties in this region will be impacted by this change however. The 'speculation tax' has some home-owners very concerned who own a second home in BC which they use for part of the year but their primary residence is outside of BC. Please keep in mind that the new ‘speculation tax’ does not apply to the Qualicum Beach Parksville area. Also, the ‘speculation tax’ does not apply if the home is rented longer term (for more than 6 months).

In addition, as of June 15 of 2018, the Superintendent of BC real estate put in place a host of changes to the way in which realtors represent their clients in BC. I’m told that BC realtors are now the most heavily-regulated profession in Canada.  One big change is enhanced disclosure, which is a document you get back from your realtor stating exactly what your realtor will get paid in commission. The second major change prohibits dual agency which bans realtors from working on behalf of both the seller and buyer in an effort to protect the public from potentially being underrepresented in their transaction. The new rules brought in the requirement of realtors and their clients to complete many new forms. Expect to be asked to sign additional paperwork prior to the transaction process. Contact Tom for the details.

Where do Tom’s Buyers come from?
30% are from Vancouver & Lower Mainland & Victoria, about 15 - 30% from Alberta & Saskatchewan and the rest come from other parts of BC, Canada & internationally.

Personal referrals and repeat clients make up about 25% of Tom’s client base. About 60% of buyers and sellers contact Tom initially through the website www.tomwhitfield.ca which attracts about 24,000 visits annually 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.

This locale is 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!

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