PETER DOLEZAL: Is real estate rebounding?

Buyers are still in the driver’s seat in Greater Victoria

Across Canada, Real Estate Boards, including Greater Victoria’s, continue to use statistics selectively, to proclaim that the softened real estate sector is recovering from sluggish volume and price movements.

Is this really the case?

With respect to the national scene, some 50 per cent of the upswing in both sales volumes and price is accounted for solely by the activity in Greater Vancouver — which, heavily influenced by offshore buyers, seems to march to its own drummer.

Mortgage rates are clearly on a rising trend for the first time in years.

In the past three months, posted five-year rates have increased by 0.6 per cent, with the average mortgage in Canada now at 3.52 per cent.

As a result, we can expect the usual rush of buyers, particularly the first-timers, seeking pre-approval of mortgages while rates are still very low.

It usually takes a number of months for this group to clear the purchasing cycle.

The result is increased sales volumes and price support in the short term; however once this new-buyer interest passes, volume and price support both diminish.

Both Canada’s Minister of Finance and its banking regulator remain concerned about the overall, and increasing, indebtedness of Canadians.

This includes mortgage debt.

Should rising interest rates not sufficiently dampen the public’s enthusiasm for debt, a further tightening of mortgage lending regulations is clearly on the table.

With a sales-to-listing ratio of about 12 per cent in Greater Victoria, we are still well below the 15 per cent minimum at which a market is considered to be moving into balanced territory. As we move into fall and winter, we can also expect buying activity to abate.

Tellingly, August’s single-family home sale numbers dropped by 16.5 per cent, compared to July.

We should be pleased with the relative stability of the local real estate market — the result due in large part, to our attractive location in Canada, and our demographic, which includes a high ratio of retirees.

Notwithstanding the Real Estate Board’s enthusiasm about the vibrancy of our real estate market, those trying to sell their home in the next few months must recognize that buyers are still in the driver’s seat.

Sellers  need to ensure that their pricing is truly competitive, rather than based on wishful thinking.

Failure to do so is likely to impede a successful and timely sale.

 

A retired corporate executive, enjoying post-retirement as an independent financial consultant, Peter Dolezal is the author of three books.

His books, including the most recent, The SMART CANADIAN WEALTH-BUILDER, are available online, and in bookstores.

 

Just Posted

Mad Hatter’s Ball offers laughs in support of Boys and Girls Club

Annual fundraising event features improv performances at McPherson Playhouse May 24

Carbon dioxide at highest levels for over 2.5 million years, expert warns of 100 years of disruption

CO2 levels rising rapidly, now higher than at any point in humanity’s history

SidFest 7 ready to rock the Mary Winspear Centre

The Bankes Brothers and Madrona Drive headlining May 24 concert

Penelakut filmmaker Steve Sxwithul’txw finds success in film and TV

Cop-turned-storyteller reaches back to his past for Tribal Police Files

Choir offers a capella take on Beatles hits

Soundings will perform concerts in Oak Bay and Sidney May 24 and 25

VIDEO: Horseshoe pitching association appeals to Greater Victora youngsters

Youth horseshoe pitching club offers fun for all ages, says GVHPA

Update: Mother dead, child in critical condition after carbon monoxide poisoning at Shuswap campground

The woman was found unresponsive insider her tent and the youth was taken via air ambulance to hospital

Canada’s parole officers say correctional system has reached breaking point

About half of Canada’s federal parole officers work inside penitentiaries and correctional institutions

Montreal researchers create audible hockey puck for visually impaired players

Three years ago, Gilles Ouellet came up with the idea for a puck that makes a continuous sound

Vancouver Island MusicFest: ‘House bands’ from the golden age of rock and R&B

Some of America’s greatest session musicians are coming to the Comox Valley this summer

Former B.C. Greyhound bus drivers head to Penticton for goodbye party

Big bash runs until Sunday, funded by drink cans left behind on busses over the years

Boy, 12, arrested after allegedly pulling a knife on another child at a Surrey park

The child was later released into his parents’ custody as Surrey RCMP continue their investigation

Full-scale search underway for missing kayaker on Okanagan Lake

Kelowna Paddle Centre member Zygmunt Janiewicz, 71, failed to return from his ‘daily kayak’ on the lake

Bucks hammer Raptors 125-103 to take 2-0 playoff series lead

Toronto heads home in a hole after second loss to Milwaukee

Most Read