In the real estate world every month at this time the pundits come forth with ideas of why the market did what it did in the previous month and predict what the future might hold. Early November 2010 is no different.
Monthly sales have been declining in the Greater Victoria area since Easter weekend…but we must remember that the years from 2003 onward have been exceptional years. Anyone who has owned real estate in Victoria either before or during the active periods of that boom has benefited and will continue to do so. Amazingly enough, up until now, activity has slowed but average prices and year over year increases in price are still a part of the Greater Victoria real estate market.
Our world is changing – we are bombarded with information to that effect on a daily basis. Recession is influencing people’s slant on “values” and people are reassessing their choices. Fortunately, here in Victoria, our local economy is more robust and stable than that in many other parts of the world and as everyone knows we are a world class retirement destination. Every year buyers and sellers become “better educated” through online tools and information available to them which can only be regarded as a “good thing”.
What else might be contributing to less activity? Mortgage rates are at historical lows yet mortgage regulations have been tightened. There is a misconception in the eyes of buyers both in British Columbia and Ontario about the HST (harmnonized sales tax) implemented in both provinces in July 2010. This tax does not apply to “resale properties” except as to the transaction fees for services associated with the purchase of a home. Sellers must now pay HST on real estate commission which is a service.
The way people “think” about housing/shelter is changing. Urban renewal efforts in many Canadian cities are drawing buyers downtown. The condo is turning out to be an affordable option for first time buyers and as long as the price of a single family detached home remains high this option will remain in the forefront for years to come. In the future, there will be Canadians who can not afford the luxury of a single family detached home. They will bring up their families in a smaller space, much as families in many other parts of the world do now. Change is upon us and we will adapt…..