2009… Bust or Boom
2010…Strong and Balanced

Last year was a roller coaster for the real estate industry. January to April was dismal in transaction volume and May to December made up the volume missing in the first part of the year. The total volume of sales for 2009 ended 24 percent higher than in 2008, and the value of transactions rose 20 percent above 2008’s figures. Although there was an increase in the number of transactions, surprisingly overall average prices remained relatively static with single family dwellings declining by less than 1 percent, condominiums declining by less than 3 percent and townhouses remaining unchanged, a remarkably balanced market for the sudden surge in sale volume in the latter part of the year.

This year with interest rates remaining low and unemployment not increasing we should keep our market in balance as long as our stock of listings builds back to a normal 3500 plus units. Currently we are starting the year with only 2557 listings. If any of these factors change dramatically the balance will shift. The slower income growth predicted for Canada as we work our way through the current recession will also tend to slow price appreciation. New housing starts in Greater Victoria declined last year 45.7 percent from 2008. Tacking new housing starts this year will be a good indicator of the health of our market.

The impact of the new HST planned to be implemented in July 2010 will definitely affect our market. The rebate on new construction is capped at $26,250 which is reached at a sale price of $550,000. HST will add $12,250 to the cost of a $550,000 sale after the rebate. To a $700,000 sale it will add $22,750. For a more in depth discussion of this new tax call me.

Condominium owners take note that the provincial government enacted significant changes to the Strata Property Act in December of 2009. These changes took effect on January 1, 2010. Major changes were made to: special levies accounting procedures, interest charged on unpaid balances, and where special resolutions narrowly fail a three quarter vote, the Strata Corporation may apply to the courts to authorize a special levy; Rental Restrictions and Age Restrictions. For an in depth explanation, please call or e-mail me for a written report.

In my opinion, the coming year should maintain a balanced market with the potential for price appreciation, a good time to trade real estate in an orderly fashion with minimal stress. Thinking of selling or buying “Let’s Talk”.