The market for detached properties on Bowen Island remained stagnant as we entered 2019. New inventory was added in January but buyers have not stepped up. Eight properties were listed or re-listed in January and one property was sold. Median Sales Price was down -6.0 per cent year-over-year (YoY) and Average Sale Price was down slightly at -0.4 per cent. In comparison the Real Estate Board of Vancouver (REBGV) Median Sales was up 2.8 per cent and Average Sales Price was down -1.4 per cent. For the same period, the MLS®HPI (Home Price Index) on Bowen Island was up 8.9 per cent while REBGV was down -1.3 per cent.
The 2018 interest rate hike and the mortgage stress test continue to have a dramatic impact on sales by significantly reducing the purchasing power of many home buyers, forcing them to look at lower-priced properties than they might have chosen prior to these regulatory changes—or to put purchasing plans on hold. (The mortgage stress test can reduce purchasing power by as much as 21 per cent, reducing a buyer’s range from $1.2 million to less than $1.0 million.)
Year-over-year, half of the homes sold on Bowen Island were listed at less than $1.0 million which accounts for the drop in median sales price. On average sales closed at 95.5 per cent of list. The 50 per cent of homes listed at $1.0 million or more closed on average at 97.2 per cent of list. These ratios of list versus closing price are in line with recent years and indicate that there has not been significant pressure on pricing to date.
The media on the mainland continues to proclaim that house prices are dropping, but reading beyond the headlines reveals that it is the luxury home and condominium market which is being discussed. The more moderately-priced single-detached market has seen a very modest increase, although activity is down markedly. Technically we are in a buyers' market, given the number of properties for sale. As we approach the spring, when typically activity increases significantly, the appetite of buyers for current prices will set the tone for the coming year.
Bowen Island YOY at 31 January 2019:
• MLS®HPI: $994,067
• Median Sales Price: $ 930,750
• Average Sales Price: $1,143,426
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