Tuesday, August 23, 2011

Baby boomer sell-off may drive house values down for decades

Interesting research from the US Fed reported here today. I've taken the liberty of editing the piece to make it Victoria real estate market applicable. I'll let you readers trash or praise my edits in the comments.
Aging baby boomers may drive down house values for the next two decades as they sell their homes to finance retirement, according to researchers from the Federal Reserve Bank of House Hunt Victoria. 
Victorians born between 1946 and 1964 are beginning to retire as the local market is still bolstered from the hyper-low interest rates that began in 2009 with the collapse of the global economy. The timing is “peaking” and, since house prices have been closely tied to demographic trends in the past half century, “portends poorly for equity values,” adviser Smith and researcher Wesson wrote in a paper released by the bank. 
The house-price-to-rent ratio of Victoria homes multiplied drastically from 1981 to 2010 as baby boomers reached their peak working ages, according to Smith and Wesson. Overseas investors’ demand for Victoria homes might help mitigate the effect of a baby-boomers’ sell-off, yet the impact would probably be limited, they said. 
“For many primary purchasers of Victoria homes outside Victoria, their demographics are even worse than ours, in particular Europe and Japan, which have older age profiles prevailing than Victoria does,” Smith, vice president of the bank’s research department, said in a telephone interview today. 
At the same time, foreign investors, including those with mitt fulls of Hot Asian Money, may decide to hold a larger share of Victoria homes, Smith and Wesson said. Also, emerging market countries such as China may ease foreign ownership rules, allowing their citizens to invest in Victoria bed and breakfasts, they said. 
Just for a little balance 
“We’re well aware that a lot of other things can happen” that would buffer the impact from retiring baby boomers, said Smith, 82. “There’s not necessarily a rule that this is the only thing that’s going to drive prices down, going forward.” 
Still, “we do see it as something of a gale-force headwind as the housing market is attempting to stay high,” he said.
The VREB reported average has bounced around like a five-year-old with ADD, or about 13% since 3-weeks ago, but hasn't stayed even with this time last year, all year.
Wesson, 104, an adjunct finance professor at the University of Camosun’s Amor de Cosmos School of Real Estate Magnatism in Gordon Head, has also researched the link between demographics and home valuations. He said that growth in developing countries should generate enough demand to absorb a baby-boomer sell-off and “keep home prices high.”
As long as the economies of countries like China and India expand at an annual rate of at least 14% to 16%, investors “will have the resources to buy our homes” and “keep our housing market fully valued into the future,” Wesson, author of the 1978 book Home Valuations to Retire On, said in a telephone interview. 
“If we don’t get hyper-growth abroad and/or we block foreigners from buying Victoria houses, the outlook for our local market is much worse,” Wesson said.


Phil said...

Looks like the FED is gearing up for QE3 to re-fuel the stock market. Get ready for higher food and energy prices. Kinda squeezes that mortgage payment, eh?

DavidL said...

Stagflation is already here.

Food prices have been accelerating upwards for a couple of years and $1.20 seems to be the new norm for gasoline. Incomes have not been keeping pace with inflation for the past few years ...

Using the BOC Inflation Calculator, I tried to see how much the minimum wage that I earned in 1985 ($3.65/hour) would be worth today
... According to the BOC, inflation has been averaging 2.55% over the past 26 years, for a cumulative increase 92.34% - so $3.65 is now worth $7.02. Try living off that!

In real terms, I could buy more for $3.65 in 1985 than I can for $9.00 in 2011. In 1985, a modest family home in Vicoria could be purchased for $85K ... the equivalent of a $500K home in 2011.

poetic said...
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Marko said...
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Marko said...

$200,000 price drop to $699,000!

$699,000/2,690 sq/ft = $259.85 per sq for a concrete building penthouse....

Assessed at $1,332,000!

Obviously Bear Mountain is struggling but this is a huge drop -will affect other units in the building for sure...


EagerBuyer(Not) said...

Boomers are all coming to Victoria to retire aren't they?

This is the great navel gazing myth of Victoria.

Smaller cities buttering up baby boomers

Retiring boomers are craving a move to smaller cities and towns, says David Foot, a demographer and author of Boom, Bust & Echo. The first wave of boomers are selling their family homes in the big cities and relocating for their retirement.

And what are boomers looking for? Access to water and access to health care, says Mr. Foot.

“[Cities and towns] that have the right elements, that can generate peace and quiet, good health-care facilities and proximity to water, should be thinking about it,” he says.

Mr. Brown anticipates that cities on Canada's west coast, including Squamish, Abbotsford and Langley, B.C., will ultimately benefit from retirees downsizing from their big-city family home.

jesse said...

Marko how many units are to be sold in Bear Mtn? If one of the last ones they may just want it off the books and fold up the sales office.

Phil said...

Don't forget that food and energy (the stuff that is getting bid up with the QE money) isn't included in the CPI calculations. What we seem to have is an odd mix of consumables inflation with asset deflation.

omc said...

I read an indepth article on baby boomers and the sell off a few years ago. The gist of it was that while we will see declines in values due to it, areas like Vic will see an artificial rise in values for the next decade or two as retirees move here. After that we would see a drop. Basically our generation is screwed.

Alexandrahere said...

There are an incredible amount of boomers out there that are giving up there "retirement dreams". Instead they are looking after grandkids, giving their kids money after they have lost their jobs, helping with mortgage paymentsand or downpayments, paying into RREP's, providing accommodation for their kids that return home (or ones who never leave), paying for the grandchildren's extracurricular activities, and on and on and on....

poetic said...
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Marko said...

The penthouse I was referring to is 1001 - 1400 Lynburne Place.....

I think BM has about 5 units left....

at $699,000 for 2,690 sq.ft that is pretty cheap for concrete building.

Must suck to be the re-sale unit listed at $598,000 and only 1302 sq/ft....and all the other units in the building...


DavidL said...

Back in 2006, the CRD estimated Population and Household Projections through 2036. Two things stand out to me: the current 0.8% annual growth rate of the population slowly declining to 0.2%, and the household growth rate - which for the most part will grow faster than the population.

In both cases, no mass migration to Victoria ... just a gentle slowdown as boomers retire and then eventually tee off on the great golf course in the sky.

Jason said...

I'm baffled. If you are going to move a plane-flight away from your grandkids anyway, why would anyone retire here when you could buy a sizeable percentage of arizona for the same price? Even the medical insurance issue doesn't make it sensible to move here in your golden years. You could own a small mansion in PEI and another in Arizona, and own a small mansion on wheels to migrate between the two for much less than a crapbox here (presently). The weather here is certainly not super desirable.

Just Jack said...

Yet, those condominium complexes that tailor to the retirement community by having age restrictions sell for significantly less than similar condominium complexes without age restrictions.

Hmmmm, things that may you go hmmmm.

Just Jack said...

From my experience, its the Grand-Parents moving to where the grand children are - not moving away from them.

Most elderly people do not uproot themselves and travel thousand of miles away from friends and family to be alone in a new city in their twilight years. They travel here because their kids and grand kids are here.

The climate is just one of the reasons why they come here - not the only reason.

Victoria's re-occurring trend of retirees coming to Victoria, in my opinion, is most likely over due to the success or our real estate market of pricing most retirees out of the market.

I could live 6 months and a day in Windsor and the rest of the year in Arizona or Florida where everything is cheaper.

Just Jack said...

One more time, this time without a 6 year old banging a pokemon on my desk.

Victoria's re-occurring trend of retirees moving to the city has slowed considerably, do to the success of our real estate market.

omc said...

I will agree that there is a trend of moving to where the grandchildren are; but here it is after they discover Victoria can be a lonely place. And yes the retiree influx has slowed quite a bit, but it hasn't stopped. Back in 2006 and 2007 a new listing would have a steady stream of beemers and mercs each leading an Alberta licence plate.

From living in retiree central (south Oak Bay), my impression is that previous 2 years were the slowest recent market for out-of-town retirees. This year appears to have picked up considerably. I know of quite a few new Albertans in the 'hood, and I was seeing quite a few displaced Vancouverites at open houses. The Vacouverites are harder to spot, but I know of quite a few higher end homes bought by them this year.

For a while I was proposing that the # of retirees moving here was negated by those moving away. Now I am not so sure.

DavidL said...

TD warns of Canadian recession

Sweetrealtor said...
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EagerBuyer(Not) said...

This may be one reason why there are so many listings....

B.C. home buyers are moving up sooner than expected


Nearly six-in-ten B.C. repeat buyers are moving on to larger or more luxurious homes - and they're moving sooner than expected. In fact, the TD Canada Trust Repeat Home Buyers Report, which surveyed Canadians who recently bought or intend to buy a home that is not their first, found that three-in-four British Columbians are moving earlier than planned. More than half (51%) had no intention of moving but now find themselves on the house-hunt again and 22% thought they would move again but not this soon.

Among those who have purchased a second home and do not plan to sell their previous home, more B.C. buyers this year said they will keep the first home as a rental property (54% versus 48% in 2010). They are also more likely this year to say the new home they're buying will be a vacation home (15% versus 10%) or that that a family member will be moving into their previous home (15% versus 3%). Three in ten buyers say they will stay in their current home and the new home they buy will be a rental property

And what about cash strapped first time buyers?

About 75% of first-time buyers plan to move again in the next two years – 10 percentage points higher than a year ago.

a simple man said...

HST results to be released...Friday afternoon. Always bad news politically when it is released Friday aft.

Would the sinking of the HST sink Victoria RE?

DavidL said...

Thanks, EagerBuyer(Not). I just cannot understand the wash, rinse and repeat cycle of continuous mortgage debt that is endured by people who are "moving up the property ladder". As for renting the first home to help pay for the second - it is next to impossible to have a profitable residential rental property in Victoria, unless it was purchased prior to 2004.

I have about three years left until I'll be mortgage-free. I'm already celebrating, thinking of all the things I can do (more meals out, nicer family vacations, a new vehicle, hire trades people to do renos, etc.) when I will no longer be paying a mortgage.

Just think of all the money that mortgage holders pay to the banks rather than stimulating the local economy.

DavidL said...

@simple man: Always bad news politically when it is released Friday aft.

In your mind, is a majority "Yes" vote or "No" vote bad news regarding the HST?

a simple man said...

I am thinking bad news for the govt - so a return to the GST + PST system.

Gov't loses a lot of cash - layoffs in govt - layoff in Victoria = ease in already tepid demand for RE with increased inventories even beyond the inventory now.

a simple man said...

Well, I'll be. St. Ann has dropped its price to $799K. Now they only need to drop another $100K at least to get a sale. As least they are getting there. End of Nov makes a year on the market - can they do it?

pod_x said...

@a simple man

It would be interesting to know what that conversation went like. Marko/Sweet, how do you deal with sellers who refuse to drop their ludicrous asking price? How much time and effort do you spend on such a listing?

omc said...

St Anne is a flipper, and as such I strongly suspect the seller is in fact a realtor.

a simple man said...

Strangely enough on the realtors website their were property disclosure documents and title documents on pdf. The 95% owner is a postal manager. I think the 5% may be the developer. She may be over her head.

omc said...

I wonder how they got so many open houses. I had heard that the flipper was a woman.

HouseHuntVictoria said...

How do you know when housing is in a bubble? When postal managers become house flippers.

a simple man said...

They have taken the pdfs off of the agent website - I thought it was pretty creepy that they were there. Anyway, as a testament to how on the ball the realtors are, they have the old, old price on their website. How to say I don't give a damn to your client!

CanSpeccy said...

The TC had an article last Saturday in which it was argued that there is a steady demand for condos in the 169 - 399K range: the implication being that many, perhaps most, first time property buyers have given up on the idea of owning a house -- for now anyway. This in turn, means that developers could have a strong market for condos even if the price of houses were to fall significantly.

Another distinction seems evident between city and rural property. There are several, perhaps dozens, of nice rural properties, e.g., in North Saanich and Metchosin, which seem to be on offer well below replacement cost, if you add the current lot value to the cost of construction at $250 per foot. In other words, in some areas, the market for houses seems already to have collapsed.

Marko said...

"Marko/Sweet, how do you deal with sellers who refuse to drop their ludicrous asking price?"

I show them the facts; however, I don't pressure anyone whether it be a buyer or a seller.

Also after every single showing on my listings I request feedback from the buyer's agent...

What did you think of price?
What did you think of interior?
What did you think of exterior?

I then forward this to the seller - it can be helpful.

Also, I have started declining overpriced listings; however, I am starting to question the strategy.

Recently I declined to list a unit for $204,900 because I thought it should be $189,900, none the less I told the seller I would take it on for a max of $199,900.

Well, seller listed with someone else for $204,900 and a month later dropped the price to $199,900....

sooooo, taking an overpriced lising can work out sometimes as it gets your foot in the door.

Marko said...

"if you add the current lot value to the cost of construction at $250 per foot."

You can get a nice home built for about $150 per foot.

jesse said...

@Eager, from the report: "The large majority (81%) plan to sell their current home and four-in-five expect to sell at or above asking price (70% versus 62% in 2010)."

So most will sell their existing residence and most want list or overlist. Methinks this is a wee detachment from reality.

Other tidbits:
"British Columbians are among the least likely to have considered a Home Equity Line of Credit (HELOC) (37% versus 50% nationally)"

"Not ones to settle, B.C. residents are experienced movers; they are the most likely in the country to have owned more than four homes in their lifetime (39% versus 29% nationally)."

Not boding well for BC if prices start falling!

Jay said...

It looks like another "wee detachment from reality" or bubble bit the dust today. I'm kind of hoping the next bubble is star wars figurines. Maybe were witnessing the last of the great bubbles for a while; techno, stocks, houses, resources - what else is there? I mean, the babyboom are starting to hang up their hats, I hear. Maybe pragmatism is the next bubble.

Just Jack said...

Here are some market costs of what people will pay for new construction.

27 Chanery Place
Paid $300,000 for the lot
House sold for $780,000 or $183 per finished square foot including garage and landscaping. That gives you a 1,452 square feet of main floor and a 1,167 square foot basement suite.

950 Colbourne Gardens
Lot was $238,000. House bought for $555,000. That's $164 per square foot for a two level home (kitchen on main floor with bedrooms up). Included is a single garage, decks and landscaping.

Let's go custom, executive quality such as 6991 Brailsford. Lot purchased for $159,000. House sold for $624,900. That's $202 per finished square foot. Included is a double garage and a full height unfinished 1,000 square feet basement.

Sounds fair, until you realize that our American cousins in Seattle are paying $70 to $90 a square foot for standard quality construction.

Welcome to B.C. (Bring Cash)

CanSpeccy said...

Marko, Just Jack, thank you for the info on current construction costs.

Sweetrealtor said...

Not much that I can add about overpriced sellers. I agree with Marko.

If it is a decent property, I may still take the listing. The best thing to do is set the sellers up on PCS right away and get them to study current listings and pending sales in their market area. Trying to get them to agree about a lower price in the brief amount of time you spend together before listing can be next to impossible. Trust takes time and, until you earn it, everyone thinks you are undervaluing the property to try and make a quick buck.

My philosophy is that every seller has to face reality about price in their own time frame. Some can face it right away and list at a good price. Some have to let the market beat them up a bit first. The latter group often uses my favourite phrase: "I don't want to give it away."

Using feedback from agents is a good tool as they are quick to point out overpriced properties. The dilemma is when no one views the house for the first two weeks or longer. The seller may agree it's the price or they may blame the agent. It hurts when you spend time and money on an overpriced listing and they go to another agent - at a lower price!

The biggest thing about taking an overpriced listing is to let the seller know you think it is overpriced! At least you aren't deceiving them by feeding their fantasy. You just tell them we will try this price for a couple of weeks but if no one shows your property, it's not me - it's your price. Let them try the high price until they are ready to face reality. They'll get there eventually.

a simple man said...

All this bad press about how people are staying away from VI because it costs too much to get here on the ferries can't be good for RE prices.

Just Jack said...

That's fine when your working with a client that has a typical property in an area of lots of similar home sales.

But, how do you price the unusual, the waterfront, the acreage, the indoor pool and tennis courts? In my opinion, most of these unusual properties are vendor priced at the beginning. After 6 months and lost advertising money does reality start to set in. Maybe that's why we have over 300 listings of million dollar plus homes in the Greater Victoria area.

Frannie said...

And don't forget that other important boomer issue--health care. I know of families who are rethinking their moves to Victoria because their doctors in other parts of the country are telling them how hard it is to find a family doctor here--and it is. I also know people who have been here for two, three, five years and still don't have a family doctor. They have tests done in clinics where sympathetic doctors will perform them. I guess that's access to health care...of a sort. But I know I'm an end-of-the-boomer, and I'm very grateful that I have a doctor. If I were older, a retiree, and thought I might not get a doctor here, would I come? How many boomers have absolutely no health conditions that need following? Blood pressure medication anyone?

Just Janice said...

I think the access to healthcare story is a 'big one' that the 'best place on earth' has a whole lot of 'less than great things in reality happening' on that front. My grandfather is out visiting with my grandmother, recently he visited a clinic in Alberta for a health problem they did the needed tests in less than 2.5 hours and got called in for an MRI - the very next day! I think such service in BC is pretty much unheard of.

I think when you add it all up - the sky high house prices, inadequate access to healthcare, and generally high cost of living - a lot of seniors might just decide to be 'temporary residents' instead for January - March renting furnished accommodation at a cost of about $4500 per year ($1500 per month). In other words 'Victoria, a nice place to visit but I sure wouldn't want to live there'.

Just Jack said...

I also think the bloom has come off the Rose in Victoria. A decade ago, BC and Victoria were good places to retire to. I believe, the wave of retirees to Victoria has ebbed. A decade ago, one storey ranchers were the hottest and most profitable style of home to build (no step ranchers for the retiree market), but not any longer.

As for the rest of us. If it weren't for the high paying jobs related to the construction industry - we would be toast. How many painters and landscapers can this town support!

And so the pendulum swings.

SilverSurfer said...

From the macro economic front, Roubini has been warning for a few weeks now that the chances of a double dip recession are now greater than 50%. TD yesterday put a Canadian recession at 40% chance. The street is expecting 'The Fed' to announce QE3 after Jackson Hole tomorrow, but I'm betting he won't (yet). If I'm right, stock markets are ripe for more significant downside risk in the short term, PMs included.

I'm betting Ben Printochio and Owebama are for the stock markets to nose dive another good 15-25% in a few short weeks, so they can justify and play the money printing card (QE3) for one last Hurrah *later* this year, given 2012 is an election year after all, and stock markets aren't allowed go down on an election year for goodness sakes(!)... after that, 2013+... Look out below!

Add to this, the continuation of black swan events (Fukushima, Italy CDS event skipping Spain, then skipping UK & Germany w/ US getting downgraded; London burning, yesterday's Japan downgrade, BAC & HP cliff dives (is AAPL next?).Now it's Huricane Irene with NY city potentially facing evacuation over the weekend and the second Greek bailout proven to have failed yesterday. Wikileaks released a massive 55,000 cables yesterday covering Israel and China amongst a few other countries.

Anyway, needless to say, I'm 100% out of the stock market, primarily because another recession is practically in the cards, although they won't admit it for another 3 to 4 months.

The volatility we saw a few weeks ago, is just a taste of what's coming up in the next year or two. So regardless of BOC interest rate hikes that may remain muted until Canada gets its own taste of the bond vigilantes; first time real estate buyers saving up for their 5% down payments following the free you-get-what-you-pay-for-advice of financial advisors "buy and hold, diversify your portfolio" and other nonesense advice that killed 40%+ of average Canadian joe portfolios in the 2008 downturn, are about to see their housing affordability erode to new levels.

Oh and PS. Don't forget about China inflation crisis still to play out late this year and into 2012 + further war induced+peak-oil oil spikes to $120-$200 range triggering a recession by 2013 if other above factors don't do it on their own, to say nothing of EU contagion running out of cans to kick down the road.

The world is on fire, the marco risks are several times the size they were back in 2008, and the bailout moneys are running out... So I fully expect Western Canadian real estate will burn sooner or later.

Good luck out there! :)

TC-Parrot said...

Carla hasn't rewritten any real estate industry press releases lately. Andrew Duffy seems to be the CTL-C & CTL-P guy these days.

Here is his latest: Despite recent growth, housing still short of estimate

Though it has rebounded in recent months with a number of multi-family projects coming out of the ground, Greater Victoria's homebuilding sector will fall short of expectations in 2011, according to Canada Mortgage and Housing Corporation.

The CMHC's housing market outlook, released Wednesday, estimated the capital region would realize 1,820 housing starts this year, short of an earlier estimate pushing the 2,000 start plateau.

Prices are predicted to fall in resale housing but sales will increase

The CMHC's outlook suggests Victoria will post 6,350 sales through the multiple listings service this year, up from 6,169 last year. It expects that number to hit 6,800 next year.

The average sale price in Victoria this year is expected to be $495,000, down from the $504,561 last year. Next year the average sale price is estimated to be $498,000.

CMHC could be wrong again according to TD Economics

The outlook runs contrary to a report in July from TD Economics, which projected that Canada's housing market was poised to correct over the next two calendar years, with resale activity falling 15.2 per cent and average prices dropping 10.2 per cent.

EagerBuyer(Not) said...

Cameron Muir tries to pump again in today's BCREA press release but not much air is left in the compressor.

Moderate Growth in Housing Demand Through 2012 (pdf)

Here are some graphical highlights:

BC sales prediction

Victoria sales and price predictions

When that guy starts predicting prices will be flat you know a correction is on the way.

DavidL said...


Thanks for the pep talk! ;-)

Even if things are not as dire as you predict - the financial future does not bode well. Time to batten down the hatches ...

Marko said...

2508 Orchard Ave went today for 860k....previous sale 2009 for 645k.


Just Jack said...

The listing agents should get a bonus for selling the Orchard property. There are a few agencies in Oak Bay that seem to consistently get premium prices for their listings and Newport is one of them.

Frankly when you get into this price level of $800,000 and up, I have zero empathy for people who pay too much. Everyone should skim a little off these people. No freebie shoveling their walks when it snows - send them a bill for 100 bucks along with a note that if they don't pay, the next time the bylaw officer gets called. So, the next snowfall you'll see me out in Oak Bay with my snow shovel and my pockets full of cash.

JustWatching said...

Marko & Just Jack,

The Orchard property has had extensive renovations according to the agent.

New kitchen and SS appliances, electrical (200 AMP), plumbing, heat pump, insulation, painting etc. Built in 1929 so it needed a little updating :>)

Looks like a nice property in the photos. Sold after 8 DOM for 860K - only 9K less than asking.

Agent listing - click here

Just Jack - Ask Meagan if they need the driveway shovelled and the lawn cut.

Jason said...

Yikes. New kitchen or not, thats 1850 sq ft on a 5000 lot with none too pretty an exterior judging by the one photo of it. Gotta be more HAM.

omc said...

That house has been renovated, but it has definite problems. It sits on the lot very close to one of the property lines, so much so you could not rebuild. Pretty much anything to do with stairs is way not to code. Anything happens, and you couldn't rebuild it.

Sold to a .....

think said...

yeah... I can't get my jaw off the floor - totally shocked by that sale on Orchard. OMC, you are totally right about that house - I remember looking at it 2 years ago and thinking the same things. WHOA!!!!!

omc said...

I have to say, not much of a job getting it ready to flip either. Hardly any aesthetic work and they don't show any fancy bathrooms.

SilverSurfer said...

PPS. to my previous post....

OK, I officially declare 2011 the year of the Black Swan.

For this weekend's Black Swan event, we provide you with an Evacuation of .... wait for it.... New York City !!! The most populous city in the entire USA!

I will also award the title of 'National Hero' to the individual that will come up with a *successful* plan to evacuate some 8+ Million people in a mere weekend with a mere ~36 hours of preparation.

Good Luck New York. That's all I gotta say.

PPPS. Miss. Irene, if you could please make a length visit around Wall St. that would be much appreciated. Thank You! :-)

me said...

Yeah right. Just like the baby boomers are supposed to retire and then we'll have a labour shortage? I'd feel safer predicting the opposite: boomers keep their jobs and keep their real estate. That is obviously the plan.

Who is going to retire and risk eating cat food? Nobody.

Their real estate will be passed on to their kids with whatever equity they have. It won't hit the market unless there is some kind of crisis, e.g. interest rates rise by 2%.

The government has found an equilibrium with high prices and super low interest rates. It has very sick consequences for the future, but nobody is going to upset the apple cart.

jesse said...

Boomers, on balance, have so much equity in property a significant drop is water off a duck's back. Lest we forget how far prices have risen and how many have government pensions!

jesse said...

On the construction jobs front, wages since 2008 have lagged inflation. The biggest winners have been wholesale trade and scientific/technical. Government wages have been flat, too. In net, though, BC salaries have been increasing at a fair clip.

TC-Parrot said...

Faithful TC readers will be happy to hear that Copy & Paste Carla is back on the job!!

Home prices predicted to inch up next year

Sluggish economic and job growth will temper both prices increases and the number of sales into 2012, says the B.C. Real Estate Association.

Greater Victoria average home prices are predicted to inch up to $500,000 next year, from a forecast of $498,000 for 2011, the association said Thursday. Last year's average was $504,561.

JustWatching said...
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HouseHuntVictoria said...

"Greater Victoria average home prices are predicted to inch up to $500,000 next year, from a forecast of $498,000 for 2011, the association said Thursday. Last year's average was $504,561."

We all just learned how to make a decrease in price look like an increase. Thanks BCREA!

JustWatching said...

Yes side wins!!

54.73% voted Yes to kill the HST

See official results here

JustWatching said...
This comment has been removed by the author.
JustWatching said...

New house, condo and townhouse sales are going to die now that HST has been defeated. Buyers will just sit on the sidelines until they no longer have to pay the HST on a new home purchase.

I suspect it will take months until the beancounters figure out how to go back to the GST and PST.

Even resale buyers will hold back because some think they pay HST on a resale property (according to some agents).

JustWatching said...

Update on the HST referendum ...

Kevin Falcon says they will go back to GSP/PST with the old exemptions (which I assume covers new home purchases).

The catch is that it will take 18 months to get rid of the HST.

How will this affect the new home market over the next 18 months?

Comments anyone?