Inventory of single-family homes in the Vancouver Island area dropped yet again in November 2016 to reach a new historic low of 1,034, a 37 per cent decrease from one year ago and dipping below October’s 1,158 available listings. Keep in mind that this is for homes under $700,000 as Vancouver island areas, like Nanaimo, have witnessed an increase of higher end homes entering the market in 2016 resulting in a 5 year high in some price points.
Sales of single-family homes in November decreased by 13 per cent from October 2016, but remained flat year over year, with 347 homes selling last month compared to 349 in November 2015. Nanaimo contributed 98 single family sales in November compared to 107 a year earlier.
Robust housing demand continues to be driven by a provincial economy underpinned by consumer confidence, surging retail sales, population growth, and a strong GDP. In its 2016 Fourth-Quarter Housing Forecast.
In November 2016, the benchmark price of a single-family home in the VIREB area was $395,300, up 17 per cent from one year ago. Prices increased in every zone, ranging from 13 per cent in Port Alberni to 22 per cent in Nanaimo.
With the recent rules outlined below and some upward pressure on interest rates along with a less robust economic condition we could see a slower housing demand by more than 15 per cent in 2017 in some regions, but BCREA feels unit sales should remain well above the 10-year average of 85,000.
In October the Change in tax rules targets some speculators who’ve been trading Vancouver and Toronto properties like penny stocks while not paying taxes on their gains. The new rules requires home sales to be reported to CRA in your tax returns, whether tax is owing or not.
Mortgage Stress Test changes how home buyers qualify for high-ratio loans (20% or less down). As of October 17th insured mortgages must be tested at a higher interest rate.
The BC Government is implementing the following program as an initiative to maintain the inflow of new money into the housing market from First-time homebuyers.
BC Home Owner Mortgage and Equity Program
This new program will help first-time homebuyers in Nanaimo and Central Vancouver Island, where a little boost or help, combined with the fact that we still have an affordable average home price will help them get into home ownership. Applications are being accepted as of January 16, 2017.
The Foreign Buyer Tax imposed at the beginning of August has adversely affected the Vancouver market, however there appears to be no negative fallout thus far in the VIREB area.
As Market Stats run 1 month behind, I will be doing a Year In Review and 2017 Forecast Video in January 2017.
This Information was obtained through VIREB.
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