Here is my market update for January 2019. I will do it a little bit different this time. I will go back and I will look at 5 last years. How many sales did we do in each of the last 5 years and then I will give you my prediction for 2019 and what I see happening.
Looking back five years, 2018 was the lowest recorded year of Home Sales for the Real Estate Board of Greater Vancouver. Let’s have a look at the numbers.
If we go back to 2014 you can see that we did 33,116 sales. In 2015 there is a substantial increase went up by 28% to 42,326. And then in 2016 our sales started to come down mainly because of the foreign buyer home tax introduced in 2016, you can see our sales were off by 5.6%. But then what happened in 2017 it was off again. We were down to 35,993 sales which were off by 10%. In 2017 we had interest rates increases and increase of the home buyer tax from 15% up to 20%. What happened in 2018, well we off by 32% from 2017.
What are my predictions for 2019? First of all let’s go back and think about all of the stimulus, if you will, that did effect the market.
In 2016 introduction of Foreign Buyers Tax. 2017 we had Foreign Buyers Tax increase to 20% and was expended geographically. If you go back from the summer of 2017 we’ve had 5 Bank of Canada rate increases, so a quarter of a point over each time, so up by 1.25%. And then January 2018, come on government give us something else to screw up our market! What did they do? They put a stress testing in, so you have to qualify for 2% each points higher.
There’s been so many actions taking by the government that is influencing real estate market. So the question is, what’s going to happen in 2019? Think about this. We have a federal election coming up in the fall of this year. What is the federal government want when there is a federal election? They do not want any turbulence, they’d like to see things better, but they do not want things going down if they can avoid it, because that will effect likelihood of them getting reelected.
So my feeling is this. We will probably see more of the same in 2019 that we saw in 2018. I do not think we are going to see the rate increase and if we do, maybe we see 1 over the course of the whole year. But I am not convinced there will be much movement there. I do not think there is going to be any other stimulus to effect the market. But saying that, the market is not going to climb back up to what it was in 2015 and 2016.