Rising interest rates have resulted in a decrease in detached home prices in Greater Vancouver and in increased insolvencies across Canada. However, northern markets have not seen the same overall negative effects of rising interest rates couple with the more stringent mortgage stress test as seen in the Lower Mainland. Parts of northwest BC have seen dramatic increases in sales and a tightening of the market with predictions of a move from a balanced market to a seller’s market over time. On the political front, the upcoming by-election in Nanaimo at the end of January has the potential to trigger a provincial election and change in government from the NDP-Green Alliance to a Liberal majority.
IN THE NEWS
According to a Royal LePage house price survey released January 11, 2019, the aggregate home price in Greater Vancouver has decreased by 0.6% year over year to a current price of $1,418,252. However, the aggregate home price in Greater Vancouver as a whole grew 2.1% to $1,274,831 in Q4 2018 over the same period in 2017. The condo market appears to be relatively stable while sales activity in in the detached housing market has slowed down considerably and is facing higher inventory levels and fewer transactions.
Earlier in the week, the latest federal figures showed consumer insolvencies filed under the Bankruptcy and Insolvency Act rose 5.1 per cent in November compared to 12 months earlier. Insolvency numbers are made up of both bankruptcies and proposals. In the 12 months leading up to November, Canada saw a 12.1-per-cent increase in the number of proposals and a 3.6-per-cent decrease in bankruptcies.
The BC Northern Real Estate Board (BCNREB) reported an overall a 2.89% increase in sales and a 10.32% decrease in the number of active listings. Many communities, such as Kitimat and Terrace for example, saw increased sales year-over-year (59% increase in sales for Terrace and 147.96% increase in sales for Kitimat). Market conditions in BC Northern tightened and may move from a balanced market to a seller’s market over time. Northern markets are expected to perform better than the markets in the southern parts of the province for 2019.
The upcoming by-election in Nanaimo, BC on January 30, 2019 has the potential to trigger a provincial election. If the Liberals were to win the by-election, there would be 43-43 seat tie in the legislature, which would force the Speaker, a former Liberal MLA now sitting as an Independent, to break all deadlocked votes – including ones of confidence that could bring down the NDP-Green Alliance. A Liberal victory in a general election this year would create a conservative front across the West, assuming Jason Kenney and the United Conservative Party form government in Alberta after the vote there this spring, which could have implications for the next federal election.
BC UNEMPLOYMENT RATES
||Rate from January 2019 to February 2019
||Rate from December 2018 to January 2019
Table source: http://srv129.services.gc.ca/ei_regions/eng/rates_cur.aspx
REAL ESTATE ACTIVITY BY REGION
- Units sold: 46.8% decrease from Dec, 2017
- Active listings: 47.7% increase from Dec, 2017
- New listings: 25.6% decrease from Dec, 2017
- Benchmark price: $1,479,000 (7.8% decrease from Dec, 2017 for detached homes)*
- Units sold: 18.8% decrease from Dec, 2017
- Active listings: 43.6% increase from Dec, 2017
- Benchmark price: $832,000 (3.2% increase from Dec, 2017 for detached homes)*
- Units sold: 40.5% decrease from Dec 2017
- Active listings: 42.8% increase from Dec, 2017
- New listings: 23.4% increase from Dec, 2017
- Benchmark price: $710,593 (4.7% decrease from Dec, 2017)*
- Units sold: 29% decrease from Dec, 2017
- Active listings: 35% increase from Dec, 2017
- New listings: 8.4% decrease from Dec, 2017
- Average residential price: $504,581 (3% decrease from Dec. 2017) Please Note: This average is an estimate based on the information available on the OMREB site at time of writing.
- Units sold: 4.5% decrease from Dec, 2017
- Active listings: 13% decrease from Dec, 2017
- New listings: 6.8% increase from Dec, 2017
- Average residential price: $293,629 (11.9% increase from Dec, 2017)
*Benchmark based on the MLS HPI® benchmark for single family detached homes.