We hear a lot about housing affordability in and around the Vancouver market, and questions about the spillover into smaller communities such as Nanaimo can become a concern about our affordability. Nanaimo remains close to the National average price of $487,000, and remains an attractive alternative to those that have remote work capabilities, and with the increase in building our construction-related jobs have increased, as well as those entering their retirement years. Yet, our housing price is fundamentally linked to the relationship between housing inventory and market demand.
The strong economic growth in BC has created rising labour demand and consumer confidence. The weekly barometer of Canadian consumer confidence from Bloomberg and Nanos shows an uptick to 59.46 for the week ending November 17th up from 58.83. with the average of 2017 around 58.41. BC currently has an increase in net migration and the wave of millennials entering the market has created an exceptionally strong market, which has affected the supply of resale homes on the market. Whether this trend continues at its current pace is hard to predict and many factors can affect these changes, including Government policy on housing. Government decisions, including slightly higher interest rates and the new mortgage stress test, could affect the housing market in 2018, but it is too early to say in what way. These attempts to temper rising home prices – aimed mainly at overheated markets in Vancouver and Toronto – will likely be counterbalanced by demographic factors, such as baby boomers entering their retirement years, millennials purchasing their first homes, and migration.
The Vancouver Island Real Estate Board reports that single-family home sales in October 2017 rose by 16 percent from one year ago, but dipped 10 percent from September. Last month, 460 properties sold on the Multiple Listing Service® (MLS®) System compared to 398 one year ago, and 511 in September.
As previously predicted, some market adjustment were expected in our region for 2017, but sales activity is still robust. Further, you can somewhat contribute most of the decline in sales numbers to ongoing inventory challenges.
Even though the supply of single-family homes for sale has been steadily rising each month, since VIREB hit a historic low of 859 in December 2016, inventory in October was just 1,138, down two percent from last year and eight percent from September.
The southern half of the province continues to thrive due to strong economic fundamentals. B.C.’s GDP is currently tracking at four percent and is expected to average 3.7 percent for the year.
We will continue to update you on the impact of the new mortgage rules, as well as the new changes for Realtors® on dual agency and how they will potentially impact you, if at all.
*Information provided in part by VIREB and BCREA
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