What's happening with our listing inventories!

I'm Debbie Simmons with the Simmons Lifestyles Real Estate Group. My partner Mark Rutherton and I service the Central Vancouver Island Real Estate Market Area. This is our market report for the week of May 13th, 2024. I'd like to start talking to you about interest rates a little bit. Interest rates have held solid all year. We're anticipating them going down slightly starting in June, hopefully maybe a quarter percent a month until December when it could be down a full percent. We don't know that for sure, but if that does happen, that will change the market dramatically, of course. Consumer confidence will come back to some extent, but it will tank the Canadian dollar. You've seen what's happened to the Canadian dollar in the last month because the Americans are not decreasing their interest rates. This is going to make us even less attractive to foreign investors or investors of any sort in Canada with such a low Canadian dollar. Anticipate that. Maybe a good time to get your money into another country and stay there for a while until this all settles out. The topic for this week is the huge new listing inventory we're experiencing in the local market, and actually just not local. This is a national story. Toronto's listing inventory is up 75%. Ours is roughly up 70% in British Columbia. The factors involved in this are government cost. What has happened is the new capital gains rates are coming in June 25th, so there's been a rush to sell on the part of investors who have investment properties and commercial properties that they were intending to sell or don't want to get taxed so highly in the future. That's caused a rush in listing inventory. Also, the banning of short-term BMPs has resulted in a huge amount of condos being listed on the market all of a sudden. That's the cause of it all. Oh, there's two new taxes that they're talking about introducing this week that I've heard. How true it's not, I don't know, but where there's smoke, there's fire. So many people have left the country now because of taxation. Last year, over a million Canadians left Canada because of taxation, and it's just continued to snowball in this great wealth transfer that's occurring right now. They're thinking of introducing a $25,000 exit tax for Canadians trying to leave the country. That's one of the ones I heard about this week. And the other thing is they've hired a professor at UBC to investigate what it would be like and what the implications would be to take away our capital gains exemption on our primary residence. As you know, we have a capital gains exemption on our primary residence. When we sell our own homes, it's not subject to capital gains currently. Now, the Americans don't enjoy that luxury. However, the Americans write off their mortgages, which is a lot more attractive than the capital gains exemption that we get over the long term. So anyway, I'm very concerned that they're going to take away those exemptions. So for a lot of these reasons, people are now starting to kind of panic and list properties and try to escape some of these new taxes that are going to be laid upon us by the government. Okay, I'm going to show you what happened this week in the market. I'm going to share my screen. There we go. Okay, in the Cowichan Valley this week, we have 20 new listings. The highest priced one is a walk-on waterfront on 0.84 acre with a 3,600 square foot house on it on Hillside Road in Shimanos. And the lowest priced one is a $340,000 building lot in Ladysmith off of Burns Place. There are only eight new sales. So in all these last weeks, I've shown you in the market, I've shown you how tremendous amount of listings are coming on every week for this market area. This is a lot of listings, but only eight new sales. Okay, this is telling us a lot. This is telling us that the market's changing. We went from that seller's market two years ago to a flat market or what we call a mixed market for the last two years. Now it looks like it's probably going to turn into a buyer's market. And with these only eight new sales, what it tells me is that buyers are holding on. They're waiting for interest rates to come down. They're believing that interest rates are going to come down. There were 16 price reductions. Well, this is a huge indication that prices are coming down. Because this is a spring market when everything should be vibrant and, you know, the most sales usually happen in our market area with our seasonality in the month of May. And they're not nearly at the levels that they should be with all this new good inventory. Lots of great new options for buyers, but they're not buying. They're not moving. It's kind of like a sticky gridlock that's going on. So 16 price reductions, shocking. Seven properties changed hands to their new owners this week. And there were five cancellations. Please let me know. I can send you any of this information in detail if you would like to have a look at it. Okay, I'm going to stop my share here. And we're going to go on to our notes this week. Oh, I've got a pet peeve I want to tell you about. My pet peeve in restaurants for the last 10 years is that I can't get a good, decent, homemade, old-fashioned bowl of soup. Well, with all of these stresses on us as Canadians, these financial stresses with the price of food and the price of gas and the price of everything else, all the new taxation, how are we going to survive? Well, I was a university student for five years. And by the time I graduated from university, I was married. I had two babies 14 months apart. I got really, really good at handling a food budget. Repeating your meals weekly and making large batches and freezing of them is a great way to stretch your budget. But soups, using dried ingredients seem to be a lost art. But even, I still do it today. I make the most amazing, nutritious, and cheap soups that are very nutritious and satisfying. And they are real budget stretchers. You can make a piece of meat last, you know, four or five meals. And so, I just want to mention that quickly. Because if you're struggling with your budget, please think about that. Think about making homemade soups. They're far more delicious than anything you can buy in a restaurant. They're more nutritious and much cheaper. So, that's just my little pet peeve about homemade soups. They can really make a difference to your budget. Okay. So, I want to tell you about the, I'm going to give you a brief synopsis of my notes from Michael Campbell this week, because there's always very important things in there. Okay. So, this week, he's talking about the alarming GDP in Canada, and how the Federal Reserve is raising red flags going, what's going to happen here? Employers aren't investing per capita in their employees, and wages are stagnant. Talked about the capital gains tax, how the least thing they could have done is indexed it so that, you know, so that it's fair. And they should have made a consumption tax. So, therefore, people who have already invested properties under one set of rules don't have the rug pulled out from under them, but rather put those consumption taxes on things that people haven't consumed yet. So, they make the choice whether they're going to consume that item or not, based on the taxation that's in front of them. It would have been a much fairer way for the government to go. In the last two years, BC's debt has gone up 10% faster than its normal pace, and this is a huge short-term change in the past two years. The retail sector is absolutely in the tank. People are out of money. People are out of money just trying to survive. So, no one's buying, doing discretionary spending right now with the economy the way it is. The population is simply out of money. There's been a 23% increase in unemployment in the past 12 months. Yes, they just announced that there's 90,000 new jobs, but that is 50,000 of them are part-time, low-paying, part-time jobs. And with a million and a half immigrants every year coming into the country, that isn't a big number. It's not a significant number. It's not offsetting the unemployment that's happening. More forced industry closures based on problems created with policy. The U.S. dollar versus the Canadian dollar and how much that's going to hurt us, they talked about that, and how our children will enjoy much less standard of living than we did. And Bill 16 is coming up in BC at the beginning of July, which is going to make things worse. It has to do with public transit and building around public transit. But the real estate analysts are saying this is going to hurt us again, not help us. And if you want to go into any of those details of everything I've just mentioned, there is a lot in there. So I would go to Michael Campbell, Mike'smoneytalks.ca, and he spells it all out over about an hour. And it's well worth listening to. You become really informed about what's coming down the pike at us and how we can prepare ourselves. So thank you so much for listening to this week's report. Thank you to Mark Rutherton, my partner and myself. We are very experienced realtors in all aspects of real estate. Please give us a call if you need anything. Our number is 250-246-0708. Thanks so much and have a wonderful week. We hope you all a great Mother's Day this last weekend. We are professional, caring, and kind.