Posted by: Daryl & Wendy Ashby | April 19, 2012

What Does the Future Hold

On the close of 2011 Greater Victoria recorded 3069 single family homes selling at an average price of  $613,839, which showed a minor decline from 2010 where 3236 single family homes sold for an average of $629,925.

For the month of February this year there were 248 sales for an average of  $579,985, compared to 174 sales in January with an average of $581,519.

If we can believe projections made by CMHC for this coming year, they are suggesting a balanced market where conditions are equal for the Seller and Buyer rather than leaning towards the Buyer. CMHC are  predicting MLS sales of single family homes will increase by 7% in 2012 after witnessing a decline of 4% in 2011. The average sale price will edge up 1% , while new multi-family construction will see a modest increase of 9%.

Buoyancy in all markets is contingent upon the Provincial / National economy and more particular the stability of the labour market.

CMHC forecasts the labour market in Victoria to expand moderately in-sync with a positive net migration and population growth and therefore job growth (both part-time and full-time). To support this theory, we currently sit only 5% below the pre-downturn peak recorded in 2008. Continued job growth is projected for 2012 at 2%. While not overly exciting, we should consider it encouraging.

One of the major keys in the puzzle remains bank interest, as it can stimulate or stifle growth overnight. On this front the rates remain historically low. Once again according to CMHC rates will remain relatively flat until late 2012 with a one-year posted mortgage rate in the 3.4 to 3.8 per cent range, while the five-year posted rate will be within the 5.2 to 5.7 per cent range.

All in all, our market conditions look favorable for the foreseeable future. For those who are sitting on the fence not knowing what to do, there is every certainty the market has softened as much as it is going to in the coming years making it a great time to buy.

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