How many of us have lived with hope 2013 would provide a turning point?
I certainly have and in my discussions with friends and family, there is a common sentiment, 2013 could be different.
Scanning the financial and real estate horizon I would however add some caution to any real optimism. Personally, as an optimist, I always search for a thread of hope and try and pull on it to see if I can unravel a story and make sense of it, this year, however, everything is looking a little threadbare!
Don’t get me wrong, I don’t believe 2013 is going to be doom and gloom and I personally believe we are going to see a stronger real estate market than we have seen for a while. My caution comes with various geo-political events and happenings which, once again we have no control over. Some good and some definitely not.
Listening to a few more educated people than myself, it sounds like the fiscal cliff solution the US just brokered may have left more on the table than off, at least a few handfuls of gravel which will make standing next to that cliff a little dangerous. Regardless of what we believe, the effects of a recessive economy in the US will have an impact here even as we continue to diversify away from a reliance on a strong US trading partner.
The good news on the horizon is the disappearance of the HST. However, it is only good in terms of the removal of the absolute confusion that Premier Campbell created when he pushed this project through and retired to a higher posting with the Federal Government. In truth, the reversal of the HST (which in and of itself was not necessarily a bad concept, just ill thought out and badly implemented) will leave the tax payers of BC a debt burden to add to the existing debt the Province carries.
The result may be a change in the governing party of BC if you believe the polls currently. It is certainly historically correct that BC swings the pendulum very radically every several years looking for a fresh group of people to blame for mismanagement of their Province. If the NDP are successful in their bid to claim leadership of the Province the Jury is out on what that will do to our economy.
The upside is the engine that drives our real estate growth is starting to fire on all cylinders. Alberta, which saw the most population growth in inbound migration last year is forecasting a 100,000 labour shortfall by the summer of 2013. While that provides the opportunity for much needed jobs for people in BC, those jobs come at a price as many people travel and leave family behind in order to get ahead a little in this strange new economic reality we are living in.
So in terms of hard numbers, I would expect to see a continued stability in the market, which to me will mean we will see increased absorption rates.
One area I personally believe we will see some gains in, is the resort market. Post HST rearrangement, I suspect you will see an increased appetite for out of Province buyers as they realise their dollar will go that little bit further. That will give a much needed boost to developers of lakeside, golf and ski properties later in the year.
The usual spring flurry of listings are likely to get a little more attention than last year.
We are likely to see more construction starts particularly in the condo sector as we see continued absorption of built inventory and I have hope that there may be a little "uptick" in pricing.
Don’t get your hopes too high, but a few percentage points to the positive will show continued stability in a market that globally is still under valued. I believe at the end of 2013, many people will be feeling more positive about their financial positions and consumer confidence will be a little more static than it has been throughout 2012.
While Vancouver may continue to wain and drag the overall BC stats lower, I believe the Okanagan will lead the Province in numbers this year.
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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.
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