Metro Vancouver Real Estate Market Update May 2013
On May 14, British Columbians will head to the polls to elect their provincial government. While recent opinion polls show that the trailing BC Liberals have narrowed the gap with the NDP, it looks likely that BC will have a new ruling party by the end of the month. But what does that say for the BC housing market? Will the election of one party over another influence the direction of prices and/or the pace of sales?
For the real estate market, the government can make an impact by altering public policy. Unfortunately, the platforms for all of the major parties are long on rhetoric and short on specifics (you can find a good breakdown here: http://www.theglobeandmail.com/news/british-columbia/interactive-compare-bc-party-platforms-on-32-election-issues/article11569057). On housing, the parties have positions pertaining to social and low income housing, but little to say on the broader real estate market.
One policy change that the real estate industry has been pushing has been a reduction in the unfair and regressive Property Transfer Tax (http://helpreducetheptt.ca). That said, no party formally opposes the tax, and only a few candidates – from the BC Conservatives, the Social Credit, and the Green Party – have outwardly campaigned against it. Expect it to stay.
Another influence on the market is the uncertainty that the election holds. We’ve seen a relatively quiet Spring Market this year, and some of that can be attributed to people holding out until after the election. The possibility of a new government along with vague policy platforms adds to the uncertainty of the market, which will influence some buyers to take a ‘wait and see’ approach to their potential purchases. A re-election of a Liberal government will likely see people assume that many of the same policies of the past 12 years will continue, while an election of an NDP government will have individuals continue to be cautious, as we find out whether they govern in the same moderately cautious platform that they campaigned on.
Historically, the NDP governed during a period (1991-2001) that saw average house prices in the Greater Vancouver area appreciate at roughly $18,000/year. The Liberals topped that by averaging house price increases of over $50,000/year during their most recent tenure (2001-present). These figures can be misleading though, as many outside factors, other than government policy, come into play.
In the end, it is difficult to determine what effect the election will have on the housing market. It is important, however, to participate in the process. On May 14th, vote.
If you have any real estate questions or if you are thinking of buying or selling your home, please contact James Louie Chung, Metro Vancouver REALTOR® – Real Estate Agent at firstname.lastname@example.org