VIREB – Still a Seller’s Market

March 1, 2017 Despite Additional Inventory, the VIREB Area is Still a Sellers’ Market

WELCOME MARCH!

NANAIMO, BC – In February 2017, 347 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 406 last February, a decrease of 15 per cent.

Sales rose by 42 per cent from January 2017, which saw 245 sales. Inventory of single-family homes declined by 38 per cent from February 2016, with 949 active listings compared to 1,529 one year ago.However, the 949 available properties reflect a six per cent increase over January, an encouraging development since the lack of inventory continues to challenge consumers and REALTORS® in the VIREB area.

The British Columbia Real Estate Association (BCREA) reports that strong economic fundamentals are fuelling housing demand throughout British Columbia, with the B.C. economy continuing to outpace the rest of Canada. Among other factors, increased population growth is a significant force driving the provincial housing market.

“In the first three-quarters of 2016, net migration to British Columbia hit 50,000 people,” says Cameron Muir, BCREA Chief Economist. “Although most of those residents will end up on the Lower Mainland, the effects of this influx will inevitably trickle into other markets.”

Although BCREA expects the provincial economy to weaken somewhat this year, consumer confidence and job growth should continue to have a net positive effect on the housing market. After dipping in late 2016 and early 2017, overall sales activity in the province appears to be trending upwards again, and that is certainly happening on Vancouver Island.

In fact, sales in the VIREB area would no doubt be much higher if there were more properties available, says Janice Stromar, 2017 VIREB President.

“The Nanaimo market in February was busier than I’ve ever seen,” says Stromar. “Single-family homes in the $450,000 range are practically flying out the door, and multiple offers are the norm, not the exception.”

The VIREB area has been a sellers’ market for several months now, and Stromar encourages people to list their homes now.

“Real estate is cyclical, and consumers need to take advantage of these market conditions because they won’t last forever,” says Stromar.

She adds that connecting with a local REALTOR® is especially crucial in a competitive housing market. REALTORS® have specialized knowledge of their communities and are equipped with sales tools, such as custom analytics, to help buyers formulate winning offers and help sellers receive maximum dollars for their home.

In February 2017, the benchmark price of a single-family home in the VIREB area was $403,100, up 18 per cent from one year ago. Prices increased in every zone, ranging from 14 per cent in Duncan and Port Alberni to 25 per cent in Nanaimo. The benchmark price of an apartment in February rose 22 per cent board-wide from the previous year, but the highest increases were seen in Parksville-Qualicum (24 per cent), the Comox Valley (26 per cent), and Campbell River (26 per cent). The townhouse market also strengthened in January, posting a 20 per cent increase board-wide.

The February 2017 benchmark price of a single-family home in the Campbell River area was $318,100, an increase of 17 per cent over February 2016. In the Comox Valley, the benchmark price hit $401,000, up 17 per cent from 2016. Duncan reported a benchmark price of $345,500, an increase of 14 per cent compared to February 2016. Nanaimo’s benchmark price rose 25 per cent to $444,400 while the Parksville-Qualicum area saw its benchmark price increase by 20 per cent to $454,100. The price of a benchmark home in Port Alberni stayed the same as in January but did rise by 14 per cent from one year ago.

Another Rule

 

A lot of people seem to have missed hearing about this one (maybe because it’s about taxes) but it could have negative consequences if you fail to pay attention.

 

On October 3, 2016, the Government announced an administrative change to Canada Revenue Agency’s reporting requirements for the sale of a principal residence.

When you sell your principal residence or when you are considered to have sold it, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale. This is the case if you are eligible for the full income tax exemption (principal residence exemption) because the property was your principal residence for every year you owned it.

Starting with the 2016 tax year, generally due by late April 2017, you will be required to report basic information (date of acquisition, proceeds of disposition and description of the property) on your income tax and benefit return when you sell your principal residence to claim the full principal residence exemption.

The Potential Implications

If you fail to report the sale of a residence in 2016 or later years, you won’t be entitled to the PRE. If you forget to designate a property as your principal residence in the year of sale (for 2016 and later years), you should ask CRA to amend your tax return for that year. CRA will often accept a late designation but penalties could apply (the penalty could be $100 for each complete month the designation is late, or $8,000, whichever is less).  For further information check out the following links:

http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa11-eng.html

http://www.thor.ca/blog/2016/10/new-tax-reporting-rules-for-principal-residence-sales/

If you have any questions, don’t hesitate to contact us.”