As the summer ends and the fall season arrives, BC residents can look back on an eventful year, and can bet on a fall with just as much happening in the news cycle.

 

The topic on the mind of most homeowners is inflation, with rising rates and consumer costs dominating headlines, which is a much different story than this time last year.  

 

Gas prices are still high, and seemingly shoot back up to the stratosphere whenever drivers get too comfortable. Construction costs are still high, and skilled labour remains in high demand, so some renovations and new builds are delayed.

 

Homebuyers are feeling the pinch, and for the first time in what feels like forever, we saw a slowdown in the BC and Nanaimo real estate markets recently.

 

But it’s not all doom and gloom out there. There are still opportunities to be found in a slowing local real estate market – and the headlines don’t always tell the full story. 

 

Read on for Jeff’s Nanaimo real estate market update for Fall 2022.

Market Cooling

Let’s start with market reports for the month of August. 

 

Nanaimo single-family detached home sales dropped nearly 50% in August 2022 compared to 2021.

 

Because of this, homebuyers are keen to wait for prices to drop further, especially since the Bank of Canada announced a 75 basis point interest rate hike on September 7th putting the interest rate at 3.25%.

 

This results in fewer bidding wars and falling prices. Many prospective buyers have been waiting for any signs of a slowdown in home sales, but with rising living costs and high inflation, the latest economic news likely does not mean that more people will be able to afford homes. 

Looking Ahead

So what does all of this mean for the immediate future in the Nanaimo real estate market (and elsewhere in British Columbia and Vancouver Island)?

 

First, when it comes to major economic events, we don’t have a crystal ball. Interest rate changes are happening too quickly for anyone to know what will happen months in the future.

 

However, as far as the Vancouver Island real estate market is concerned, we still know a few things for sure.

 

1. Demand to move to Vancouver Island is still high, especially for retirees.
2. The only homes that remain on the market for an extended period are new builds, since builders are keeping prices high due to increased labour, land, and construction costs.  
3. Home sales will slow down slightly around the holiday season.

Expert Opinions

Canada’s top economists and real estate specialists are split about what these market conditions mean for pricing.

 

Here’s John Pasalis, president of Toronto-based Realosophy Realty Inc. in an interview with Nanaimo News Bulletin.

 

“The fall is going to be interesting because we’re going to see probably more buyers jumping into the market and you don’t need a ton more buyers to provide a little bit more stability to prices. Just a little bit of a bump in demand could be the difference between homes selling in three, four weeks versus selling in two weeks or selling a lot faster.” 

 

Other experts point to localized market factors that have big impacts – which is more reason to trust in a realtor with significant experience in your area. Sherry Cooper, chief economist at Dominion Lending Centres was also interviewed by the Nanaimo News Bulletin.

 

“It’s the markets that experienced the 50 per cent increase in home prices that have seen the biggest correction, and that’s what you’d expect because those are the most expensive homes in Canada with the largest outstanding mortgages.” 

 

However, there is one thing most experts will agree with on the record. If buyers don’t need to buy right now, it’s probably best to hold off.

Why This Matters To You

 

The Bank of Canada’s mortgage rate forecasts claim we are experiencing the worst of belt-tightening  measures right now. 

 

However, the reality is interest rates are changing too quickly for us to really know what to expect. 

 

In difficult economic times like these, there are a few caveats for buyers and sellers in the Nanaimo real estate market.

 

Even though prices are coming down, they are still high. Buyers who are thinking about moving to Vancouver Island from the mainland can afford to make a purchase and still have money left over. This could involve taking out a smaller mortgage to protect themselves from higher interest rates. 

 

In addition, now is a great time for younger buyers to take a page from their parents’ book and open themselves up to buying a fixer upper (tk fixer upper article). Take the time to search for hidden gems that may need a little work, but can be purchased for a better deal with a smaller mortgage.

 

Want to stay in the know with the latest in Nanaimo real estate news? Sign up for the Jeff King Real Estate newsletter for weekly updates. 

 

“Luxury” and “Nanaimo” haven’t been historically synonymous.

But as market forces change in British Columbia, new opportunities are popping up throughout the Vancouver Island luxury market.

Smaller cities like Nanaimo and Kelowna are being mentioned alongside Vancouver and Victoria–and for good reason.

In this guide, we will explain why Nanaimo is being sought after as a luxury real estate destination, and how luxury real estate buyers, investors, and sellers can find what they are after in the market.

Nanaimo: A New Luxury Market

Natural beauty is one of the main reasons that Nanaimo stands out as a luxury market. 

Waterfront access, hilltop vistas, and gorgeous west-coast forests make the Nanaimo area attractive, especially with world-class leisure attractions like golfing, boating, and wineries.

With such a mild year-round climate, it is easier to find time to enjoy these activities. 

Although the Okanagan and Interior regions of British Columbia are still attractive for retirement, vacation properties, and full-time living, challenges brought about by hotter summers and volatile weather have made Vancouver Island seem much more attractive in recent years. 

This is cited as one of the key reasons for the red-hot Nanaimo real estate market, and the same is true for luxury properties.

International Appeal, Recreational Focus

Buyers from the United States, and overseas are continuing to show interest in Nanaimo luxury real estate and business interests.

Many are looking for the upper range of properties available, like a $13.2 million, 11,900 sq. ft home (the priciest home on the island) that sold in early June 2022. 

The pandemic and related travel restrictions cut into the international luxury home buyer market, but this is showing strong signs of rebounding–especially for recreational properties.

The slowdown in travel convinced many domestic buyers to invest in local recreational real estate. But now that borders have fully opened again, international buyers are reentering the market and pushing those prices even higher.

In 2022, the average price for a cottage in British Columbia was $1.029 million.  

Nanaimo, often considered a recreational hotspot, is seeing a big boost in its luxury markets because of this. 

Nanaimo’s Top Luxury Locales

Some Nanaimo neighbourhoods have more to offer the luxury markets than others. 

North Nanaimo is a sprawling area that borders Lantzville, Hammond Bay, and the Uplands. 

The very best properties here are found overlooking the Strait of Georgia from lots on the rugged Rocky Point. With panoramic views that stretch all the way to the Sunshine Coast, this is a popular location for custom-built newer constructions in a quiet setting.

Departure Bay also offers a range of luxury properties with easy ocean access. For frequent travellers, ferry and seaplane terminals are only a few minutes away by car.  

For those with a preference for ranch-style luxury, Jinglepot is the way to go. This rural setting is a quick drive from the amenities of the city while showing off the best parts of country living in the shadow of Mt.Benson.

Curious about other neighbourhoods in Nanaimo? Check out our Nanaimo neighbourhood guide.

Luxury Amenities

Aside from the attractive setting that many of Nanaimo’s luxury properties are located in, they also feature high-end amenities.

Look for homes with luxury features like professional kitchens, wine lockers, and spacious walk-in closets.

Large-scale pools are another hallmark of luxury, especially if they have an infinity edge that pairs well with Nanaimo’s many ocean views.

Since Nanaimo and British Columbia are known for their active, outdoors-friendly lifestyle, look for spacious home gyms with enough room for a few Peloton bikes and other high-tech exercise equipment.

Homes nestled next to the great outdoors will also include ample storage for mountain bikes, surfboards, kayaks, and ski gear.

For the buyer who prefers to keep busy with hobbies, there are plenty of luxury clubs around, like the Nanaimo Golf Club and Nanaimo Yacht Club.

Advice for Selling Luxury in Nanaimo

If you are the owner of a luxury property in Nanaimo looking to downsize or hang your hat elsewhere, there are a few things to keep in mind as you prepare to list. 

• Ensure that you maximize curb appeal. Buyers expect high-end landscaping to go along with luxury architecture and interior design. Look into options for a short-term landscaping facelift to make your property look incredible from the outside.

• Show off the “wow features”. When you are ready to stage the house, do whatever you can to depersonalise the space and show off the unique features of the home –especially the ones that you may not use. 

• Market your home for the digital age. Invest in high-quality digital photography that is formatted well for social media. Drone videography and walk-through videos are a great way to capture short attention spans, and they help to show off the scale of an impressive home.

Summary of the Nanaimo Luxury Market 

Although Nanaimo has a much smaller inventory of luxury properties compared to Victoria and Vancouver, homes in this market often have similar amenities, square footage, and breathtaking West Coast settings that have become so much more desirable in recent years.

So what is the real benefit of the Vancouver Island luxury market? It may still be undervalued.

Like most other markets on the Island, the “Mid Island” region (including smaller communities like Lantzville, Parksville, and as far north as Campbell River and Courtenay) have seen year-over-year average price growth of as much as 32%.

The trends contributing to this rush to the Island appear to be continuing, and the international markets are taking notice. 

If there was ever a time to buy luxury real estate in Nanaimo, the next few years may be it.

So go with a professional that knows the market best. Talk with Jeff King about luxury real estate in Nanaimo today. 

 

It’s a very interesting time to be working in the real estate industry on Vancouver Island. 

Island residents have been getting used to the idea that this peaceful West Coast region is in demand since before the COVID-19 pandemic, but real estate is becoming even more of a hot commodity as the market continues to heat up.

Buyers are increasingly looking for smaller cities with high quality of life where they can enjoy the benefits of working remotely. We are also experiencing a seller’s market with historically low inventory. 

What can we expect as we close out 2021? Will prices continue to rise upwards, or is there any chance buyers can catch a break in the coming months?

Read on to learn from the latest industry reports and gain some insider knowledge about Nanaimo real estate. 

The Market At A Glance

Housing inventory remains at historic lows on Vancouver Island, and especially in Nanaimo. Sales activity has been slow in the past several months, and Nanaimo house prices are rising as buyers feel the pinch.

The average price for single detached homes in Nanaimo in August 2021 was $829,411, which was a 27% increase from the previous year. Increases around this level were consistent across the Island, and Port Alberni saw the largest boost with a whopping 32% increase to $494,500.

Active listings for single detached homes throughout the Island dropped 50% in August 2021 compared to 2020 according to the Vancouver Island Real Estate Board. 

Developers and local real estate boards continue to advocate for ways to boost the development process, but there is no quick fix to this supply issue. These market conditions will hold through the end of 2021.

Other News On The Island

Summer 2021 in British Columbia saw another devastating wildfire season in the interior region. There were more wildfires of higher severity, which could lead buyers to look to Vancouver Island as a safer alternative for vacation properties and second homes.

Another plan for a high speed foot passenger ferry between Nanaimo and Vancouver came to light this September. Long term residents in Nanaimo know the “high speed ferry song and dance” by heart, but that doesn’t mean investors will stop trying. 

The population of Nanaimo has surpassed 100,000, and sky high living costs in Vancouver make our pretty harbour city an option for many workers who wouldn’t shy away from a daily ocean commute. 

There’s no reason to get too excited yet, but this venture from Conqora Capital Partners is something buyers and sellers in the Nanaimo real estate market should keep an eye on in the coming year. 

Mayor Leonard Krog has expressed his hopes that the service could be in action as early as spring 2022, and Conqora has already signed  an agreement to operate with the Snuneymuxw First Nation.

These events are something for residents and hopeful buyers to watch. Although they won’t drive real estate prices independently, they could become a part of the narrative for the Vancouver Island real estate market.

Projections For The Rest Of Q4

The Bank of Canada is keeping interest rates low for now, but a rate hike will be on the horizon when more economic recovery is measured. 

The 2021 federal election featured plenty of campaign promises for housing affordability, but any changes to the status quo are still years away.

Prices in Nanaimo are expected to continue to shoot up in the final months of 2021. An increase of 9% for all property types is projected for Q4 of 2021. This puts Nanaimo above other hot Canadian markets, including Victoria and Vancouver.

2022 And Beyond

Beyond 2021, Vancouver Islanders (and Canadians) should be optimistic. High vaccination rates in British Columbia could signal further growth in the economy as restrictions are dropped.

This is especially promising for international travel, something that drives the economy of many regions of Vancouver Island. The return of international visitors and their spending dollars are good news for local businesses, the labour market, and homebuyer confidence further downstream. 

However, the Nanaimo real estate market will still be restricted by supply issues, and prices will likely continue to rise. With a large number of listings needed to “balance” the market , there is a long way to go before home prices fall.

Sellers should look ahead to 2022 and beyond with optimism. Thinking of making some renovations or repairs before putting your home on the market? Now might be the right time to roll up your sleeves. 

If you are interested in buying or selling in the Nanaimo real estate market, you will want to work with a realtor that knows the market better than anyone.

Jeff King Real Estate brings experience in land development, residential sales, and commercial property to the table. Check out our current listings or learn about our home evaluation today

If you’ve set a goal to pay down your debt this year, you’re not alone. According to a recent study, more than half of Canadians have set a goal to pay off debt in 2018. Strategically reducing or paying off debt benefits your finances tremendously, but can positively impact other areas of your life as well.

Reduce Stress. Finances are a top source of stress for many Canadians. When you make the commitment to pay off your debt, you’re also making a commitment to your overall health and well-being by minimizing a large cause of your stress.

Improve your credit score. Although credit cards and lines of credit may help establish your score, maintaining low balances positively impacts it overall. Additionally, if you plan to finance a large purchase, such as a car or home, keeping your outstanding balances low may classify you as a lower credit risk and qualify you for reduced interest rates.

Easily pay an unexpected bill. If your debts are low, you’ll be able to save more in an emergency fund to handle financial surprises, such as an unexpected home repair bill.

Increase your expendable income. Many Canadians live paycheque-to-paycheque; their hard-earned money is already earmarked to pay off debts and bills before it’s even deposited in a bank account. However, the less debt you are in, the more expendable income you will have available to enjoy now or save for later.

Boost your retirement income. If you want to maintain your lifestyle long after retirement, the time to save is now. Unfortunately, one of the biggest impediments to building a retirement nest egg is existing debt. The good news is, when you pay down or pay off your debt, you can choose to contribute additional funds to existing retirement accounts for enjoyment in your golden years.

Model good financial habits for others. If you want others to cultivate good financial habits, be the example they can follow. People, especially children, mimic the behaviours they see. Explain how to cultivate good financial habits and why it is important to do so. Additionally, provide reasons why it is best to avoid unnecessary debt.

Become more generous. The less debt we have, the more generous we may feel with our money. Whether its tithing more, donating to local school or sports programs or giving money to a cause dear to us, we may feel like we can give more.

Want to learn more? Get in touch with Jeff King today.

Whether you want a loan to make a large purchase or you’re applying for a job, a high credit score may give you an advantage. It not only helps you secure a lower interest rate and save money over the life of your loans, it also demonstrates to lenders and potential employers that you’re financially responsible, and likely responsible in other areas of your life. Financial institutions and employers put their trust in this score and are more inclined to trust you if you’re a low-risk candidate.

1.Lower interest rates on loans and credit cards. Lenders consider people with great credit a good risk, meaning they’re confident the borrower will pay back the money. If you’re applying for a mortgage, good credit may get you a wider range of mortgage offers. One of two percentage points in interest may save you tens of thousands of dollars over the life of the loan.

2. Leverage to negotiate lower credit card interest rates. They higher your score, the more bargaining power you may have when negotiating interest rates. Why? Your credit card company does not want to lose your business and they will often lower your finance rate. You need to ask! Additionally, you may be able to cite other offers you’ve received from companies based on your score, which may help you negotiate a better deal and save money.

3. Qualify for lines of credit. If you need to make a large purchase, such as new appliances or furniture, good credit helps you qualify for a line of credit to buy them.

4. Qualify for higher limits. Since you have a strong history of repaying your debt on time, banks may be willing to lend you more money and, if asked will often increase your credit limit.

5. Rental approval. If you’re renting a home or apartment, a good credit score increases your chances of securing your ideal location. Landlords use credit scores to screen their tenants’ payment history, delinquencies and charge offs. This is also try if you’re renting a vacation home. Many agencies will run a credit check and, if your credit is good, you may be able to negotiate fees and lower rates.

6. Gain employment. Many employers are checking the credit of their applicants. If you have good credit, you are seen as more responsible than applicants with lower credit scores.

7. Avoid security deposits. Utilities and cell phone providers often require a security deposit when you sign up for service. With good credit, you may not have to pay a deposit when you sign up for service or, in the case of utilities, transfer to another location.

Want to learn more? Get in touch with Jeff King today.

(even if you’re not currently in the market for a home)

1. The health of the local market influences the value of your home. Higher home prices in your local area mean that your home may also be worth more. Since real estate is local and can vary from city to city—even from neighbourhood to neighbourhood in some cases—the more you know about the market, the better equipped you are to understand the value of your home.

2. Make the right decision if you’re thinking about buying or selling later in the year. People move for many reasons; one of the most common is a change in family situation, such as the birth of a child, aging parents moving in or adult children moving out. Staying up-to-date on the local market will help you better understand if it’s the right time to buy or sell. Also, if you find yourself wanting to upsize or downsize sometime in the future, it’ll help you decide whether you should turn your property into a rental.

3. Get the full economic picture. It’s no secret that real estate plays an important role in the health of the overall economy, but national statistics only give you a portion of the story. While staying up-to-date on national housing statistics is helpful for learning about overall market trends, learning more about the local market will help you understand the economic and market trends we’re experiencing here. We can tell you if we’re experiencing a buyers’ market or sellers’ market, what local economic trends may impact future housing prices, and how your home compares to similar homes in the area.

What do Canadians think of the housing market?

We’ve heard from the experts; now, what do Canadians think about the housing market?

When will housing prices fall?

54% Never; prices will continue to rise

20% In 3 to 5 years

16% In 1 to 2 years

When do Canadian homeowners plan to sell their homes?

27% Never, I don’t plan to sell my home

25% 0-5 years

21% 5-10 years

19% More than 10 years

Three financial reasons Canadians plan to sell:

23% To invest in a larger home

22% To cash out on the high price of their home before the prices fall

21% To finance retirement

Want to learn more? Get in touch with Jeff King today.

Source:CIBC

 

What’s in store for the market in 2018? While it’s impossible to know for sure, experts analyze current trends to predict what may happen.

The market should continue to moderate.

Home prices are expected to make very modest gains in 2018. Experts are predicting an increase of 1.2 percent, the smallest increase since 2009. Comparatively, home prices increased an average of 9.6 percent in 2016. The Canadian Real Estate Association (CREA) predicts the national average sales price will be $535,400.

At the provincial level, both Ontario and British Columbia, which have seen impressive price gains over the last few years, will experience price increases around one percent in 2018. Alberta and Quebec will also experience modest price gains: prices in Alberta are expected to grow 0.6 percent and prices in Quebec are expected to increase 3.2 percent in the same period.

Nationally, experts predict home sales may fall throughout 2018. CREA adjusted its sales forecast due to slowing sales activity across the country. However, there are bright spots: affordability remains favourable in the Prairie and Atlantic Provinces and is improving in Quebec.

What’s responsible for the levelling off of the market?

There’s no simple answer. In fact, several factors working together have contributed to a levelling in the market. These factors include the housing regulations that have been enacted over the last few years (including taxes on foreign homebuyers), decreased affordability in many areas and increased interest rates. Although interest rates have been relatively low compared to past trends, the Bank of Canada is expected to increase its key interest rate by the end of 2018.

Although all of these factors have played a role in moderating the Canadian housing market, it’s important to keep in mind that real estate is cyclical and the red-hot market was expected to level off eventually. While Canadians have consistently viewed a home as a good investment, many potential buyers have been delaying purchasing a home in hopes that prices will come down and become more affordable. A moderate housing market is not only more stable; it may help potential buyers who have been eager to purchase a home, but may have been priced out of their markets.

What does this mean for the Canadian economy?

The Canadian housing market has been hot for the last few years, especially in Ontario and British Columbia. The boost in the market has driven employment and economic growth across the nation, particularly over the past year. A levelling in the market may have an impact on the overall economy, which may be felt gradually over the next two years. However, experts don’t predict a sharp correction; instead, they expect a transitioning of the housing market into more moderate territory.

Want to know more about the market? Get in touch with Jeff King today.

GST – HOW IT AFFECTS YOUR HOME PURCHASE

First and foremost, it is important to note that the GST applies to new homes or homes that have been substantially renovated.  It does not typically apply to the resale of homes. Also, it will apply to any service fees like Legal and Real Estate fees.

The Federal Goods and Services Tax (GST) is equal to 5% of the purchase price.

New Housing Rebate

You may be eligible for a provincial New Housing Rebate if you buy a home as your primary residence. According to Revenue Canada, the Definition of House for this rebate is:

• a single family home
•  a residential condominium unit
• a duplex
• a mobile home
• a floating home

It also includes a bed and breakfast if more than 50% of the house is your primary place of residence. Otherwise, only the part that is your primary place of residence is a house for purposes of this rebate.

For more information visit Revenue Canada Agency’s website by clicking here.

The GST is not the PTT

The Property Transfer Tax (PTT) is a separate provincial tax on all property transfers. The rate is 1% on the first $200,000 and 2% on the remainder of the fair market value of the property (usually the purchase price) before the GST is applied.

IF, you are a first time home buyer, you may be exempt from this tax! If you’re not sure that you qualify, you can always give me a call at 250-756-2112.