Sunday, 11 April 2010

Update on the Economy

Having expressed concerns last month regarding the potential effects of inflation on the Real Estate Market, I read the recent inflation figures with interest.

Consumer prices rose 1.6 % in the 12 months to February, higher than Economists forecasts and fuelling thoughts of an interest rate rises.

The 12-month core rate of inflation - which factors out some of the most volatile components - came in at 2.1 %, (February forecast was 1.7%).

The 2% threshold is important, as that is the Bank of Canada's stated target for the core rate - far above levels in Q1 that the Bank of Canada expected just two months ago.

Contributing Factor - Travel services soared to 17.9% as hotel rates soared due to the Olympics during the month -accounting for most of the increase in the core CPI . Experts therefore predict that the core rate will remain below the central bank's 2% target once the impact of that is negated.

Following on from this, we have now seen some of the major banks increasing their longer term rates, and we must see how this affects market confidence.

Central Okanagan Statistics for March 2010


 Type

 Total

 Single Family

 Strata

 Lot

 Manuf

 Mar 10

 355

   193   

 119

 24

 19

 Feb 10

 310

 143

 91

 21

 22

 Mar 09

 238

 138

 81

 5

14 

As you can see there has been a positive increase in the number of sales during March 2010, which reflects the seasonality of sales in the Okanagan area.

What is most interesting is that of the 193 Single Family home sales 152 were sales under $550,000, which continues to point towards ‘end user’ purchases rather than investors.

Of the 119 Strata unit sales 113 were under $500,000.

The other point to note this month, was the total number of listings taken during March was 1362, making a total of 4977 properties listed in the Central Okanagan. This is a significant increase on the number of new listing last month at 1097.

This has the effect of keeping us far from a balanced market at the moment, and I expect to see a further increase in the number of listings during April.

My recommendations on the Real Estate Market

Buyers - If you are planning to buy this year, and you will be looking to finance with a fixed rate mortgage, ensure that you get pre approved, by your financial institution, in the next little while, as the writing is now on the wall for interest rates to continue to rise.

Also, be mindful if you are looking to buy new property. Whilst it has not become policy yet, check on the implications of the new Harmonised Sales Tax on your potential purchase. You may find it better to act sooner rather than later.

Sellers - Sales numbers are increasing steadily, but price is everything. Ensure that you are keeping a sharp eye on the competition in your neighbourhood, in terms of new listings and sales.

There are more buyers around, and there is definitely increased activity in the numbers of people looking on the real estate web sites, but they seem to be monitoring prices rather than using it as a means to find a property to buy at the moment.

We keep seeing reports of the market in BC as being good. Prices in Vancouver are still doing well, but the market here in the Okanagan remains quite tentative.

And finally ... If you have any questions, please do not hesitate to give me a call or send me an e.mail.

Also, don’t forget to follow my tweets -  http://twitter.com/AKelownaRealtor !

Kind Regards

Trish Cenci
Premier Canadian Properties                                      
3A 3185 Via Centrale
Kelowna, BC V1V 2A7                                      
Cell:   (250) 864 1707 
Office 250 765 4282                                          
Fax: (250) 717 1889                                            
Toll Free 1-866-765-0579                                

Website:
http://www.mykelownarealestate.com
Email:      trish@pcrealty.ca








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