Market Update

BCREA Hosing  Forecast Update, February 2019

Quick Real Estate Stats December 2018

Real Estate Market Changes December 2018

Vancouver Island  Real Estate Activity December 2018

Mortgage Rate Forecast, December, 2018 Update

Updated January 11, 2019


2018 appears to have been a turning point in the real estate market on the Island.  Demand is dropping, however, new listings have also dropped, thereby not significantly increasing the inventory (active listings).  While the rate of price increases has slowed, it is still 10% for the board area. Until the supply increases, there will be an upward pressure on price, though at a lower rate than the last couple of years.

The VIREB Board area (from the Malahat northward) continues to behave somewhat differently than the mainland, where sales have declined in the 30-40% range with some markets experiencing minor price reductions.  In addition to the new mortgage rules, rising increases in interest rates, and the mainland (as well as Nanaimo and Victoria) are impacted by the foreign buyer's tax.

Some changes in the Canadian economy have moderated the forecast for mortgage rate increases in 2019.  See Mortgage Rate Forecast, December 2018.

The economy in BC, while slowed a bit, remains strong and is forecasted to grow by 2.6% in 2019. The resolution of NAFTA is a positive factor.  Although, tariffs by the Trump administrations and the tensions between them and China, and now China and Canada are some potential shadows on the horizon.

Comparatively, the VIREB area remains a good option for retirees moving to the west coast with prices much lower than the mainland and Victoria. People coming from off the Island and retirees represent about half the sales in the board area.

In February, 2019 BCREA has revised its forecast in single family home prices in 2019 for the VIREB area to 3.2% (up from 1.1%).  I believe that is a bit low due to low inventory levels and believe it will be in the 4-7% range. See Housing Forecast Update.

Underwater picture of a school of salmon preparing to spawn up the Puntledge River near Courtenay.

Pink Salmon (Oncorhynchus gorbuscha) gather in a school to spawn in the Puntledge River, near Courtenay. 

Updates to the market are made as received here. I send out a quarterly newsletter which summarises these changes. To signup for the newsletter click the button above.

I also post blogs when new information is added, or there is pertinent news, to see or receive these blogs click the button above.


Quick Real Estate Stats December 2018















While the number of units sold has dropped significantly in most markets, new listings have also dropped, though at a lower rate.  This has slowed the recovery in inventory still leading to and upward pressure in price.  Price increases are lower than 2017 and likely will be lower still in 2019, however most markets will likely remain in a seller's market.

Real Estate Market Changes December 2018

Please note these comments relate to single family homes in markets covered by the Vancouver Island Real Estate Board (VIREB), which covers all of the Island from the Malahat north. The Victoria Board covers Victoria, all of the Saanich Peninsula and west to Port Renfrew and is not covered in these comments. Some comments on the provincial real estate market are also included from time to time. The quick stats above cover major Real Estate Markets in the VIREB area.

Snow covered trees and ground with blue sky on a Mountain in the Comox Valley

Beautiful winter scene in the Beaufort Mountains in the Comox Valley.

For 2018, we have seen an increasing slow down in demand due to the mortgage stress test.  The stress test in 2016 (for buyers with less than 20% down) only caused a blip in demand.  The stress test, called B20  (for buyers with 20% or more down payment), introduced in January 2018, is appearing to have a more sustained impact.  Adding to this is the rise in interest rates, which started in 2017.  Depending on your circumstances, you are likely looking at a mortgage rate of 3.5-3.75% or a little higher and rates are forecasted to increase moderately in 2019.   Rates were slightly higher than 3% at the end of 2017. For more interest rates see Market Blogs.

For the Board area, comparing 2018 to 2017, demand (homes sold) are down 19% and new listings are down 7%. 

Unfortunately, this decline in new listings, is slowing the increase in inventory.  Inventory levels have gone from 45% to 51% of the 2007 to 2014 average, see chart.  Until the inventory levels rise to more normal levels, there will be continued upward pressure on price, though the rate of increase is dropping.  In December  2017 the increase (over the last 12 months) was 15% for the Board area and in December 2018 it was 10%.  For the Comox Valley increases have moved from 19% to 10% respectively.

 While the sell/list ratio is coming down in most markets compared to the previous year and especially from the obscenely high rates for spring of 2017 which were over 90% in some markets, it is still in seller’s market territory in almost all markets.  For the board area it has moved from 77% last year to 67%  in December.  Usually 50-60% is considered a balance market.  However, even with a rate of 57% in Nanaimo, due to low inventory I expect it to remain a soft seller's market.  See next section for individual market information.

The sell/list ratio is the number of listings that have sold in a 12 month period.  A 60% ratio means that 60% of the listings sold and 40% did not sell.

See What are Balanced, Buyer's and Seller's Markets for an explanation on sell/list ratio.

Even with demand decreasing, the drop in new listings is slowing the increase in inventory.  Until inventory increases significantly, there will continue to be strong upward pressure on prices.

Vancouver Island Real Estate Activity December 2018

As mentioned above, the sell/list ratio is coming down and demand is down in all markets, which is indicated in the December Comparison.  This comparison shows the drop in new listings and demand (sold), as well as the drop in the sell/list ratio for each market.

All markets remain in a seller's market position, though not as strong as 2017, with prices are up 6-26% over the last 12 months. Other than Port Alberni, which is at 26%, most markets are in the low teens, except Nanaimo at 7% and the North Island at 6%.  The Board area being at 10%.

Please note, due to the rush in the fall of 2017, as buyers moved to purchase before the new stress test took effect in January 2018, the change in inventory is likely exaggerated.

Entire Board area: Seller’s market, last 12 months to December 2018, results are:
Read More


Cowichan Valley: Seller’s market, last 12 months to December 2018, results are:
Read More

Nanaimo: A seller’s market, last 12 months to December 2018 results are:
Read More

Parksville Qualicum: Seller’s market, last 12 months to December, 2018, results are:
Read More

Port Alberni & West Coast: Strong seller’s market, last 12 months to December 2018, results are:
Read More

Comox Valley: Seller’s market, last 12 months to December 2018, results are:
Read More

Campbell River: Seller’s market, last 12 months to December 2018, results are:
Read More

North Island:  Seller’s market, last 12 months to December 2018, results are:
Read More

Note: Port Alberni and North Island have lower volume which can lead to stats being more volatile.

People meet on the Sheraton Greenway in Comox.

The Sheraton Greenway in Comox is one of the newly created walkways that abound throughout the Comox Valley

BCREA Hosing  Forecast Update, February 2019

A woman in yoga pose by the ocean at Kitty Coleman Beach campground in the Comox Valley.

A woman greets the early morning sun during a yoga pose at Kitty Coleman Beach campground.

BCREA's Housing Forecast Update forecasts a 2.1% increase in residential sales province wide for 2019 to 80,000 units.  This compares to 103,768 residential sales in 2017. This is down from their November forecast of 12% increase in unit sales for 2019. The 10-year average is 84,800 units.

While the market has slowed with some markets in the province moving toward a balanced market, here on the island we remain in a sellers market largely due to the low inventory levels (listings).  Though demand has dropped, new listings has also fallen, though at a lessor rate.  Our inventory remains about 50% of the 2007-2014 average, up about 5% from 2017 (my comment from other stats, not mentioned in the report). Until inventory levels rise, either through more listings or continued decline in demand, there will remain an upward pressure in price.

For VIREB we had a 10% increase in single family home prices in 2018 (was 15% in 2017).  My view is that we will move to a softer seller's market with price increase in the 4-7% range.

Highlights for the Vancouver Island and VIREB market (Malahat northward) include:

  • The mortgage stress test and rising mortgage rates reduced demand here as with Canada in general.
  • Retirees continue to be a dominant factor in the market in the VIREB market representing over 50% of the buyers in 2017. These buyers often are mortgage free and not subject to the stress test or the ebb and flow of the economy.
  • Millennials entering their household forming years are representing a growing segment of the buyers.
  • As mentioned above, inventory levels remain low, leading to a significant increase in home building. Though this is expected to slow due to capacity constraints and the reduced demand.
  • BCREA revised forecast is for a 3.2%  (up from November's forecast of 1.1%) price increase for the VIREB area in 2019.  I think that is a bit low and expect increases of 4-7%.

Some of the key points of the BC market as a whole include:

Read More

Mortgage Rate Forecast, December 2018, Update

BCREA Mortgage Rate Forecast for December 2018 has the title "Mortgage Rates Relatively Steady in 2019." From the summer of 2017 to October 2018 the Bank of Canada (BOC) raised its overnight rate 5 times to 1.75%. During that time BCREA was forecasting additional increases as the bank strives to bring rates to its estimated neutral level of between 2.5-3.5%. Now BCREA is suggesting things may be changing.  The report states:

"Midway through 2018 everything seemed to be pointing to sharply higher mortgage rates. The Canadian economy was soaring, the Bank of Canada and its counterpart in the US were resoundingly hawkish and bond yields were testing multi-year highs.  However, declining oil prices, the stronger than expected impact of the B20 mortgage stress test and generally soft economic data in recent weeks have prompted a swift change in market sentiment." (emphasis added)

The 5-year bond rates (which affect 5-year fixed mortgages) have dropped close to 50 basis points back to levels seen in June. The B20 stress test has impacted lenders ability to grow their residential mortgages bringing the growth rate to its lowest in 17 years.

Mortgage Rate Outlook:  Since the BOC considers the economy to be at full capacity and inflation is a little higher than the target 2%, its bias is toward increasing rates to its neutral rate of 3%. However, with the factors noted above, plus the announced closer of GM's plant in Oshawa and an expected slowdown in growth for the Canadian and US economies, the BOC plans for further increases may be delayed or reduced. The forecast is leaning to one rate hike next year, to 2%, or possibly two increases to 2.25%. This may lead to a modest increase in the variable mortgage rates while the drop in bond yields likely will results in 5-year fixed rates remaining relatively flat, possibly reducing in the first quarter of 2019.

Canadian Economic Outlook:  While the most recent quarter showed the economy expanded at a decent 2% rate. There are some shadows as indicated here and in the report, plus household spending has slowed and residential and commercial investments are down.

Mortgage rates are influenced by two things:

  • The Bank of Canada's overnight rate affects variable mortgages and shorter term fixed mortgages (1 to 3 years and in some cases 4 year).
  • The bond rates tend to affect longer term fixed mortgages, typically 5 years and up.
A note on advertised rates 
Read More
Man sitting on the boardwalk with woman in a wheel chair in Paradise Meadows.

An enjoyable outing on a boardwalk in Paradise Meadows near Mt. Washington.


What was, What is, What will be, What to do

Forecasting by its very nature is not an exact science. Obviously, we can let you know what has happened in the past and what the current situation is today. What will happen in the future can be a difficult thing to predict, hence why most forecasts are updated quarterly. Also, local situations need to be considered. For 2018 we saw dramatic differences here on the Island than on the mainland.  On the Island we remained in a seller's market while much of the mainland moved to balanced markets, some with minor price reductions.  Over the last four years the BC economy has out performed the Canadian economy.   

Government changes late in 2016 had a strong effect in the lower mainland and little effect here on the Island.  The new mortgage stress test, which took effect January 1, 2018, plus rising interest rates, reduced demand in 2018.  Though had less impact here on the Island.

Buying and selling real estate are major financial transactions the net impact of which is difficult to predict over the long term. It is advisable to closely examine your other reasons for making a change. It might be easier to focus on what is happening in your life rather than trying to predict what will happen in the world. And leave yourself some room in case things don’t go as anticipated. Ask yourself some “what if” questions. A conservative approach, some good soul searching, and research could possibly save you some stress down the road.

Ariel view of Courtenay with the Comox Harbour.

Ariel view of Courtenay with the Puntledge River flowing into the Comox bay.

Tip: Planning for things that do not happen is better than not planning for things that do happen.

What are Balance, Buyer's and Seller's Markets?

Water Buffalo in a Comox Valley field.

Water Buffalo (Bubalus bubalis) are a new addition on the Comox Valley agricultural scene.

For economists and analysts a balanced market is when the supply (listings) of housing and the demand (sales) are in equilibrium. In other words the supply and demand are such that there is not any real pressures on price, up or down, compared to inflation. Home price increases are keeping pace with inflation (around 2%).

Buyer’s market
Read More


Seller’s market
Read More


To predict and measure supply and demand in the market we use a sell/list indicator. This measures the number of homes that were listed in a year and compares how many of them sell. A sell/list ratio of 55% means that in a year 55% of the homes that were listed actually sold and 45% did not sell. A sell/list ratio between 50-60% usually results in a balanced market, below this is a buyer's market and above this is a seller's market. Please note that this is an indicator and sometimes markets don’t respond as predicted. What actually happens with price is the true test of the market's status, the sell/list indicator just helps us predict what is likely to happen.

The graph below looks at the number of units listed, the number of units sold, and the sell/list ratio. The left side plots the number of units and the right side plots the sell/list ratio as a percentage. The graph is for the years of 2000 to 2018.

Line graph showing homes sold and listed and buyer's and seller's market.

This next graph compares the sell/list ratio to what actually occurred with prices. The left side plots the average home price (orange line) and the right is the sell/list ratio as a percentage (blue line). Again, it is for 2000 to 2017. It is a measure of how effective the sell/list ratio was at predicting changes in price. For the most part, it demonstrates that the sell/list ratio is a pretty good indicator. Only in 2009/2010 did pricing and the ratio not react according to prediction. This is important as it demonstrates that supply and demand are only one component of the housing market. Sudden shifts in the economy or market confidence can have strong influences on the market. For the most part, the sell/list ratio is a good indicator on the pulse of the market.

Graph showing average home price increases and buyer's and seller's market.

     About Gerry

Information and Interpretation
Selling or buying real estate is a major financial endeavour with many factors to consider. While you have a wealth of information available to you on the internet, interpreting that information is another matter.

This is where I come in. Not only do I research and provide you the information you need, I take it to the next level and analyze and interpret that  information for you. I will tell you what I think, what we do is up to you.

As a client, your Realtor works for you, and this is a principle I hold dear.  I see my job as providing you with information, interpretation, services and guidance, not to push you on a course of action.

Unparalleled Service
I have a simple code, I don't sell, I service. I assume my clients are perfectly able to make their own decision once they have the information they need. I spend my time providing information, guiding people through the process, and making sure all the bases are covered, not in high pressure sales.

Over the years I have received very complementary feedback from clients. See Client Feedback.

Integrity, simply defined, is being honest and fair. This is further enhanced by one of a Realtor's prime duties, which is not to put anyone's interest above their clients, including their own.  This a duty I take very seriously. My personal outlook after over 30 years in business, is that whenever I experience high pressure sales I start to question the integrity of the person selling me.  Are they looking after my best interest or theirs?

The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS® Realtor and the REALTOR® logo are controlled by CREA and identify real estate professionals who are members of CREA.

Blue illustration of Gerry Chwelos, Realtor, Pemberton Holmes.

Gerry Chwelos, REALTOR®


Tel: 250-8975465

All images on this website are copyright protected. Most photos provided by Boomer Jerritt.

Copyright © Gerry Chwelos 2017