As the year draws to a close, many people are wondering what can be expected in the year ahead for Metro Vancouver’s real estate market. Throughout 2012 we’ve seen the conditions shift from a seller’s market, to a balanced market, and closing in more of a buyer’s market. So what can we expect for 2013?
The strength of the real estate market is closely linked to the overall economy and as we know we have some good fundamentals working in our favour. For 2013, Western Canada is expected to dominate growth compared to other provincial forecasts (RBC Economics Research, 2012). The stabilization of the European financial markets, predicted Chinese reacceleration, and strengthening US economy will all assist in increasing the strength of the global economy as well as our local market.
Real GDP is expected to grow in 2013 for British Columbia, with the job market showing further improvement due to decreasing unemployment, and new major capital projects with Seaspan Marine and Rio Tinto Alcan beginning next year.
Increasing strength in the economy leads to increasing consumer confidence as well, and retail sales are at their highest levels in the last two years. With inflation and interest rates predicted to remain low for the immediate future, this means the borrowing costs associated with housing are also expected to remain low and therefore there are many exciting opportunities for homebuyers in the short to mid-term. Net migration is an important factor to consider in the Lower Mainland as well when analyzing the real estate market, housing starts and increasing net migration will continue to be a factor that drives the Lower Mainland real estate market due to the highly livable nature of the region.
When we look at the statistics from 2011, recently the overall the number of home sales is down just over 15% and the average price is down about 2% but still more than 10% higher on a 3 and 5 year comparison. With sales to active listings ratios increasing to about 11%, homebuyers have the luxury of making thoughtful purchasing decisions. This is great news for homebuyers as this means more product choice, and flexible offerings. With prices expected to remain relatively flat or with nominal increases, there’s ample opportunity for many to enter one of North America’s strongest real estate markets.
According to CMHC, Canada’s new home market is expected to be quite stable with no major shifts in early 2013. Sales are expected to increase due to less upward pressure on pricing, with prices expected to hold stable. Based on the real estate cycles of recent years and our positive fundamentals, I anticipate now is a good time to buy with prices likely to end up higher in a year from now in most multifamily markets than today. Some great new communities are expected to be available in the Spring so review your financing options with your preferred financial institution today and be in a position to make an offer as soon as you find the home that best suits your needs.
Cameron McNeill
Sources:
www.rbc.com
www.cmhc.ca
