Winds of Change
I try not to sensationalize everything in these market updates, and for the past 4 months I have been hinting at subtle yet important markers that the market was getting ready for a shift in direction. This month the indicators went from subtle to loud, a 26% decline in sales, and a 6.9% increase in total number of listings from last month. This will go a long way to giving more options for buyers, less competition and a more even playing field. Prices edged up another 1.9% across the lower mainland but I expect even more listings with less sales and buyer activity going forward which should even the playing field for buyers even more. I will go into further detail on why that is my expectation at the bottom of this report, truly a must read so don’t skip it!!
The Quick Numbers
REBGV Video Update
Winds of Change: Where Does The Market Go From Here?
Carrying on from my intro to this report, I anticipate more of a downward shift in the following months partly as a result of the foreign buyer property transfer tax rules, but not for the reasons you would expect.
The key here is that foreign investment has so far been shown to be less than 5% of the buyer pool, with probably a larger portion of foreign money with landed immigrants and people this rule change will not target. The real effect of this rule change in my opinion will be two-fold:
- Sellers will be concerned about a cooling market and rush to list their homes all at once
- Buyers opting to wait and see if the market shifts before purchasing in the future.
I have already seen an increase in seller activity, having listed 3 properties this past week alone, and I have had plenty of people considering selling. On the buyer side, our open houses from this past weekend showed slower attendance and less offers, however the long weekend should also be considered a factor.
It is yet to be seen if buyer’s will truly hold out or if they will get back in right away. In the end, this may be only a speedbump where buyer activity picks up again as historically the fall market is one of the busiest, and as I have wrote in the past, with interest rates so low there are plenty of people still able to afford property in this market..