LOOKING BACK & AHEAD

As the final quarter and year of 2023 has ended, we have changes to the market from multiple angles including rising interest rates, inflation and government intervention at national and provinicial levels.

Looking Back

In the third quarter we forecasted a further decline in sales over the final quarter of the year. As seen in this report this held true in many areas of the lower mainland and fraser valley. However, it should be noted that not every pocket is slowing down. Areas such as Abbotstford Mission, the Tri-Cities, and Surrey did see an increase in sales activity over the final months of 2023. It apppears cities that can offer homes with the best value are still seeing demand for new home sales in the multi-family sector.

We also discussed the province’s naughty list and how some cities have been proactive in working in changing policies, hiring more planners as required to help bring supply to market sooner and see what they come up with to meet their housing targets. It was also noted that some cities are taking a more adverse wait and see reaction and wonder how or if they will be able to catch up to meet at least 75% of the goals the province has given them. Some cities are adding more costs through taxation, and fees which only increases the price of a new home and passing it on to the consumers, increasing the sales price of a home without necessarily adding further value. Due to inflation, the longer anything takes, including homes, to get to the market the more they cost as supplies and labour continue to rise. The biggest issue from a development side will be that municipalities are able to provide infrastucture to areas to allow the development required to meet these targets to even begin. This would include but is not limited to things like storm & sewer, access roads, schools and most importantly hydro from BC Hydro and we really hope the province is speaking with and on BC Hydro just as much as they are on the cities or this will all be for nothing if we cannot supply the power required for all these new homes. Developers have been reporting delays to completion due to hydro delays for over a year now. Will this significant factor be addressed anywhere?

Looking Ahead

As we enter a new year with new laws, extended bans, and an anticipated updated ‘naughty’ list of cities from our provincial government we are keen to see how this may affect our market as whole and how it will affect each node within our market.

Will all these changes help increase supply or could we see a further decrease in supply with more and more developers waiting on certainty from the market and governments? Will the people of BC tell the government this is what they want or advise this is not what they want in our next provincial election coming this fall? Have the citizens had enough of being told what to do and how to use their property? Will the government have to anti-up and come up with a solution to their own issue instead or will all this just be accepted?

Will developers lower prices as seen with the recent release of Juno in Surrey City Centre? Perhaps more banks will allow for a 10% deposit on concrete? (Typically 20% is required for high-rise purchases) Will pricing and deposit structures like this last? If so this will cause further lack of supply as developrs put projects on hold until they can be sold and built in a more favourable market?

We will have to wait and see what 2024 has in store.

How do you think the City’s waiting to watch and see what the rest do first will catch up? Will they even be able to catch up?

Will our government address the issue of having enough power and delivering it on time for all their new home targets? Have they even factored this in?

Will the Bank of Canada hold rates or lower them in March? April?

Jamie Squires

Jamie Squires

President & Managing Broker

Fifth Avenue Real Estate Marketing LTD.

Jamie@fifthave.ca

If you have a view you would like to share and/or questions you would like to discuss please contact Jamie Squires at Jamie@fifthave.ca.