Greater Victoria real estate outlook in 2013

Greater Victoria’s residential real estate market performance numbers, now in for 2012, provide a few clues to trends we might see in 2013

Greater Victoria’s residential real estate market performance numbers, now in for 2012,  provide a few clues to trends we might see in 2013.

The 2012 market, in combination with an increase in inventory, ended on a substantial softening in both sales activity and prices. Understandably, the industry tries to apply the best possible spin on the statistics, but some facts are indisputable.

In December 2012, the most meaningful indicator of price trends – the median price – showed a modest decline.

Single family dwellings, at a year-end median price of $515,000, were 3.8 per cent lower than a year earlier.

Condominiums, at a $259,000 median price, were 4.1 per cent lower, while townhomes, at a median price of $274,000, remained virtually unchanged.

Certainly not a sign of a market collapse, but clearly a softening trend – especially given the 4.7 per cent reduction in the number of unit sales and the coincident increase in the number of listings.

In 2013, what factors could affect residential real estate?

On the positive side, interest rates are almost certain to remain at record low levels. Also, new-construction pricing will benefit from the elimination of the HST in April.

Among the negative factors are not only the uncertainty inherent in the coming provincial election, but also the full-year effect of the Federal government’s tightening of mortgage lending rules which came into effect in mid-2012.

The condominium market in particular, will be adversely affected by the April expiration of the provincial government’s $10,000 bonus incentive program for first-time buyers of newly-constructed units.

Typically, a reduction in first-time buyer activity results in less upgrading by buyers to higher-priced homes.

Perhaps the greatest negative impact on real estate markets not only locally, but throughout Canada, will be the continuation of a tepid North American and European economic recovery throughout 2013. We won’t escape this continuing effect.

On balance, downward pressures on the market will likely prevail. As the year unfolds, we are likely to see buyers gaining greater market power than sellers.

Sellers will have to be very realistic in their pricing or their listing will languish. More than ever, the selection of premium realtors will become very important. Over time this will become easier, as marginal realtors will choose to leave the industry, and fewer replacements are likely to emerge during a challenging market.

Given the negative pressures, continuation of the modest downward trend we saw in 2012 is likely for 2013.

Regardless of the actual market outcome in 2013, the wise market participant, be he buyer, seller, or real estate professional, would be wise to pay close attention to the signals that clearly exist.

A retired corporate executive, enjoying post-retirement as a financial consultant, Peter Dolezal is the author of three books. His most recent, The SMART CANADIAN WEALTH-BUILDER, is now available at Tanner’s Books, and in other bookstores.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Stelly’s grads shocked after ‘anonymous friend’ pays for dinner

Friends took limo to Deep Cove Chalet to celebrate after graduation festivities cancelled

Undercover operation exposes prominent human trafficking problem in Greater Victoria

VicPD’s Operation No More took place in mid-June at a local hotel

Saanich serves up virtual Strawberry Festival

Residents invited to look back on 54 years of festivals

PHOTOS: Dual rallies take over Legislature lawn on Canada Day

Resist Canada 153 highlighted colonization and genocide, Unify the People called COVID a hoax

VicPD investigating possible hate crime on BC Transit bus

A young Black man was randomly struck by a Caucasian man who he did not know

‘This year is unlike any other’: Trudeau delivers Canada day address

Sophie Gregoire Trudeau and the Prime Minister release video celebrating the national holiday

Gov. General honours Canadians for bravery, volunteer service

Five categories of winners presented on Canada Day

COVID-19: Should non-medical masks be mandatory in Canada?

New poll shows Canadians are divided on the rules around mandatory masks

‘A little bit scary for everybody’: Air passengers wary as new rules take effect

Masks or face coverings have been mandatory on flights since April 20

Library’s Summer Reading Club goes virtual

This literacy program is usually offered in person

VIDEO: Prince William and Kate chat with B.C. hospital staff about COVID-19

Seven-minute video posted to Youtube on Canada Day

River centre says heavy rains could bring flooding to central, northeastern B.C.

Water levels are already unusually high and river banks can be extremely unstable

Campbell River’s defunct cruise ship terminal to undergo evaluation for future plans

With no cruise ship coming through, the $16million terminal has been a white elephant for over 13 years

Most Read