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Predictions for 2023 on BC's Sunshine Coast
I also dissect a hectic 2022
I go into more detail in my monthly market update video but here are some of the highlights from the year that was and predictions for the year to come.
Hear/Watch/Read my full January market report
📺 Watch the Sunshine Coast Real Estate Podcast on YouTube.
📰 Read the full market report on my website: https://www.truebluerealty.ca/blog/67967/predictions-for-2023-on-the-sunshine-coast-bc
2022 in review
Prices peaked in May 2022
Our Sunshine Coast real estate market peaked in May with a detached benchmark price of $1,045,400. Past the peak, prices on the Sunshine Coast fell by approximatey 2.6% each month. By the end of November, (December numbers aren’t out yet), detached benchmark prices had fallen to $890,400. That works out to a 15% drop since the peak. That number could be closer to 17% if December prices fall by another 2.6%.
Inflation and the Bank of Canada
Inflation crept up from 5.1% in January to an eye-watering 8.1% in June. In an attempt to tame inflation, the Bank of Canada raised rates 7 times in 2022, from 0.25% in March 2022 to 4.25% in December. This was one of the most aggressive rate hikes in Canada’s recent history.
This impacted mortgage rates which have jumped north of 5% for a 5-year fixed and over 6% for a variable rate. For every point that interest rates go up, buyers lose roughly 10% of their purchasing power.
Predictions for 2023
If monthly price decreases remain stable and don’t accelerate, detached benchmark prices on the Sunshine Coast could fall into the mid-$700s by early summer.
If the Canadian economy continues to perform and inflation doesn’t cool, the Bank of Canada could opt to continue on with its price hikes. If this happens, prices could drop faster than 2.6%.
Conversely, if Canada enters a recession in 2023 and the economy falters, prices could also drop faster.
Foreign buyers ban starts January 1st, 2023
I originally thought the foreign buyers ban would be a neutral factor for real estate on the Sunshine Coast. But as more information comes available, I’m begining to believe the Sunshine Coast may benefit from this ban.
The Canadian foreign buyers ban isn’t a blanket ban that affects all buyers and all properties equally. There’s a list of buyers and locations that are exempt from the ban, and one of them appears to be the Sunshine Coast.
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If the Sunshine Coast is indeed excluded from the foreign buyers ban, we may (MAY) see a modest increase in foreign investors looking to park their money. I don’t believe this will cause prices to rise but it could soften potential price drops.
Read more about the foreign buyers ban here: https://bit.ly/ForeignBuyerBan
Short-term rentals on the Sunshine Coast
In 2022, Gibsons, Sechelt, and the SCRD have each implemented some form of short-term rental regulation. How these regulations will impact our local markets is up in the air.
If local governments strictly enfoce the new bylaws, we may see more listings hit the market as short-term rental owners decide to sell their units to avoid the new rules all together. This influx of inventory could have a negative consquence for prices on the Sunshine Coast.
But if enforcement is lax or inconsistent and owners decide to take their chances, the price impacts of these new bylaws may prove to be inconsequential.
Advice for buyers and sellers
If at anytime in the past two years you said, “I’m waiting for prices to drop before I buy,” this is the market you’ve been waiting for.
The mortgage landscape has changed a lot since March 2022. If you’re considering buying, you must, MUST, MUST get pre-approved before you go house hunting.
Demand has softened considerably and the market moves slower than it did 12 months ago. You won’t be buying with a gun to your head and sellers will even accept offers with conditions/subjects. 🤯
Buyers have a lot of leverage right now, provided they’re working with a Realtor that understands the Sunshine Coast market inside and out. If you’re not already working with a Realtor, call me at 604-418-2695 and I’ll give you the what’s what on the Sunshine Coast.
If you’re selling your home, time is of the essence. If you’re not already working with an agent, call me at 604-418-2695 to get your property on the market ASAP.
I say this every month but the key to selling in a down market is to price sharply and market your property like crazy, not only on the Sunshine Coast but in Vancouver and possibly even in other provinces. Sellers need to cast a wide net.
Call Tony today!
If you’re not already working with an agent, call me when you’re ready to buy or sell and I’ll guide you through the busy and competitive real estate market on BC’s BEAUTIFUL Sunshine Coast.
⚠️ DISCLAIMER: This newsletter and its contents are not intended to cause or induce breach of any existing agency agreement.