Today I wanted to give you a quick look at what happened in 2016 in our real estate market and how some major events affected pricing and opportunities.
The first big event was this summer when the federal government said that foreign non-national buyers would pay an additional 15% on property transfer tax. On the high end of the market, this pulled back demand significantly and immediately.
Then, in October, the Bank of Canada levied a change of policy that requires buyers to qualify under a five-year rate. This effectively reduced affordability by 20% or more for most buyers. Of course, this pulled back demand on the lower end.
So how resilient was the market to these events and the overall uncertainty with the election issues all the other sentiments of the market?
If we look at the median price for detached homes a year ago versus where it's at now, it went from $700,000 to $785,000. That's a 21% increase. The townhouse median price went up from $354,000 to $462,00, a 31% increase. Finally, apartments are up from a $211,000 median price a year ago to $249,700, which was an 18% increase.
Why did townhouse prices do so well? We can likely point to affordability since a lot more buyers were pressed into that product type. What do these numbers mean for opportunities? For buyers, when inventory rises and demand gets pulled back, we see more favorable pricing and more options.
It's also great news for sellers because a year ago, many of them couldn’t move up market because there was so little inventory to choose from. Now, they have far more options and they don't have inflation working against them.
In short, there are good opportunities for everybody coming up, and it looks like the market has been very resilient. If you or anyone you know is planning on making a move, give me a call or send me an email. I'd be honored to work with you. Merry Christmas to you and your family!
