January 2023 Real Estate Update

Happy New Year!!!

As with every new year, we have an opportunity for change and there is certainly plenty of change with two new real estate rules in place for 2023.

The federal government’s ban on new foreign ownership of residential property is now law.  Also, the new Home Buyers Rescission Period took effect a couple of days ago which largely targets multiple offer scenarios and bidding wars.  This rule should have minimal effect on anyone unless a prospective "Home Buyer" with an unconditional offer in place changes their mind within 3 days of having their offer accepted. 

Please read on for more details.


December Sales Stats for Single Family Homes in Cowichan Valley

December saw a total of 29 single-family homes sold in the Cowichan Valley, down about 12% from the 33 that sold in December of last year, and much less than the 46 homes sold in the preceding month of November. There were 32 single-family homes listed on the market in December 2022 compared to 26 last year, up 23%.  There were 713 sales in our valley over the past 12 months representing a 19.5% decrease in comparison to the 884 sales in the 12 months ending in December of last year. 

Average sale prices for single-family residential homes in December 2022 were at $738,207, down 14.5% from $864,142 in December 2021, and up slightly from November’s average of $726,264.  When looking at the 12 months to date ending in December, 2022 the average sales price is up 12%.  The median price of a single-family home in the Cowichan Valley for the 12 months to date ending in December 2022 was $800,000.

In December the active inventory of single-family homes on the market in the Cowichan Valley rose substantially to 154 homes for sale when compared to 32 homes at the end of last December. 

Currently, we have a 4.8-month supply of single-family homes on the market, while December 2021 had a 1.3-month supply. The average days to sell a single-family home in December is 50 days, compared to 15 days last December.
  
Condos & Townhouses

Condominium apartment sales in December saw 3 units sold, down from 7 sales in the previous month of November, and down from the 8 that sold last December. Condo apartments in the valley saw the average price for the 12 months ending in November 2022 at $359,606; that's up 23% compared to last year. 

The inventory of Townhomes on the market saw 4 sales in December, fewer than the 7 that sold in the month of November, and down many from the 11 sold last December. Townhomes in the valley saw the average price for the 12 months to date ending in for December at $612,976, up a whopping 38% from $507,210 for the same period last year.
 
  
Cooling-Off Period on Residential Real Estate Now in Effect
On January 3rd 2023 the BC government's changes to the Property Law Act to include the Home Buyer Rescission Period (“HBRP”) or ‘cooling-off period’ mandatory for residential real estate transactions came into effect.The HBRP allows homebuyers to rescind a contract to purchase residential real estate within three (3) business days after the accepted offer date, even if the contract does not include conditions. It cannot be waived by the seller, buyer, or their representatives. During this period, homebuyers can still legally withdraw from the purchase without justification at the cost of a rescission fee equal to 0.25 per cent of the purchase price.The HBRP and any subject conditions in the contract of sale both start counting down at the same time and run concurrently if subject conditions have been included in the contract of sale.More information is available from the BC Financial Services Authority here. You can also call or email me if you have any questions.
 
Foreign Buyer Ban
 Who can’t buy residential property?The act defines a non-Canadian as:
  1. an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
  2. a corporation that is incorporated otherwise than under the laws of Canada or a province;
  3. a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada for which a designation under section 262 of the Income Tax Act is in effect and that is controlled by a person referred to in paragraph (a) or (b); and
  4. a prescribed person or entity.
ExceptionsInclude:
  • A temporary resident within the meaning of the Immigration and Refugee Protection Act; or
  • A non-Canadian who buys residential property with a Canadian spouse or common-law partner if the spouse or common-law partner is a Canadian citizen or permanent resident, or person registered as an Indian under the Indian Act.
Residential propertyIncludes any real property or immovable that is:
  1. a detached house or similar building, containing not more than three dwelling units;
  2. a semi-detached house, rowhouse unit, residential condominium unit or other similar premises, vacant land, where the land has been zoned for residential use or mixed use and is within a Census Metropolitan Area (having a population of at least 100,000) or Census Agglomeration (having a population of at least 10,000); or
  3. any prescribed real property or immovable.
PenaltiesNon-Canadians found guilty of contravening the act are subject to a fine of not more than $10,000. If the federal government orders the sale of the property, the non-Canadian buyer won’t receive more than the amount paid for the property.
Please feel free to contact me at anytime to discuss real estate questions that you may have.  If you are considering selling, call or email me to chat about how best to prepare your home for sale, and to discuss different strategies so you too can capitalize in the changing market of 2023.  Sincerely, Paul Tedrick
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