August 31st Sunshine Coast Real Estate Market Update

Sunshine Coast Detached Listings

Sales down by 29% over the previous year

There are currently 341 detached listings on the Sunshine Coast. This is up from August 31st, 2022, when there were 270 detached listings. Detached sales year-to-date ending August 31st, 2023: 279 sales, in 2022: 395 sales, in 2021: 562 sales, in 2020: 416 sales, in 2019: 326 sales, in 2018: 384 sales; in 2017: 500 sales, and in 2016: 771 sales. The 2023 Market's hot price range is between $1,001,000 to $2,000,000 with 102 sales.

Sunshine Coast Attached Listings

Sales down 1% from last year

There are currently 60 attached listings. This is up from August 31st, 2022, when there were 46 attached listings. Attached sales this year-to-date ending August 31st, 2023: 99 sales, in 2022: 108 sales, in 2021: 184 sales, in 2020: 95 sales, in 2019: 100 sales; in 2018: 108 sales; in 2017: 170 sales and in 2016: 170 sales. Attached listings represent strata unit apartments, condos and townhouses.

Sunshine Coast Land Listings

Sales down 60% over previous year

There are currently 107 bare land listings. This is up from August 31st, 2022 when there were 82 land listings. Land sales year-to-date ending August 31st, 2023: 38 sales, in 2022: 96 sales, in 2021: 174 sales, in 2020: 87 sales, in 2019: 61 sales; in 2018: 110 sales; in 2017: 140 sales and in 2016: 313 sales.

Year-to-Date Detached Sales

• $000 to $300,000 with 9 sales

• $301,000 to $400,000 with 7 sales

• $401,000 to $500,000 with 3 sales

• $501,000 to $600,000 with 7 sales

• $601,000 to $700,000 with 23 sales

• $701,000 to $ 800,000 with 30 sales

• $801,000 to $900,000 with 37 sales

• $901,000 to $1,000,000 with 36 sales

• $1,001,000 to $2,000,000 with 102 sales

• 25 sales over $2,001,000

Where Are We Headed?

The question of where we are headed is on every person’s mind, whether you are selling or buying a home, everyone wants an answer to this pressing question. Probably today it is more of a crystal ball gaze than any other time in history. We have many moving influences in the world today: The war between Russia and Ukraine causing pressures on energy prices and food prices, China’s economic slump - All have an impact on inflation in Canada. The Bank of Canada keeps a close eye on inflation and is the barometer that they use to gauge whether to raise or lower rates. Traditionally Buyers will buy what they can afford to spend, and the interest rate dictates the amount.

The last time the 5-year interest rates were at this level was back in 2008 where you could buy a brand new 1900 sq ft rancher in West Sechelt for $452,000. Today we are in a different climate so I reached out to Isha Raina, a mobile financial advisor with the Sunshine Coast Credit Union for what someone could afford last year prior to the rate increases and what their buying power is today.

Isha states:

“Back in 2022, at the end of January, the rate for a 5-year fixed closed-term mortgage was 2.70%, while rates in February 2022, were around 3.34%. Based on the rates in January 2022, a client with an average household income of $104,000 could afford a mortgage of $540,000 (using the mortgage qualification rate of 5.25%).

These days, with the same household income and the current 5-year fixed rate of 6.39%, they can afford a mortgage of $396,000 only. This is all since the mortgage stress rate to be used is the greater of the Bank of Canada qualifying rate (5.25%) or the contract rate plus 2%; thus, the qualification rate used here is 8.39% (6.39% + 2%). The amortization used in both scenarios is 30 years.”

This is about a 23% reduction in the buying power of an average Buyer. A simple conclusion would be that home prices have to come down or interest rates must come down. Bryan Yu Chief Economist for the Central Credit Union Central writes in his report September 6th on the Bank Canada Rate announcement: “The Bank remains data dependent on inflation pattern but will be monitoring the path of excess demand, inflation, wage growth and corporate pricing. With a weak handoff in GDP to Q3 pointing to little growth and cumulative impacts of rate hikes still to come, we expect the Bank to stay on hold until Q1 2024 when it commences rate cuts. That said, expect the Bank’s language to remain biased towards hikes as it guards against stoking demand and inflation.”

We may see some interest rate relief next year, but it is anyone’s guess. The best advice I can offer is we are seeing incredible downwards pressure on pricing and it will probably not change soon despite low inventory. The best marketing tool is accurate pricing of your home to be competitive in the marketplace. Gone are the days of pricing a little higher. If you need to sell, now is the time. If you want to wait it out, then be prepared for a six-to-seven-year correction period. When I reviewed past markets, this was the average time of a down market. If you want a Free Market Evaluation, we will be happy to give you our opinion of pricing for your home or property.

Sunshine Coast is still the best neighbourhood in the Lower Mainland and the best value, being 20 to 30 percent lower than comparable areas of the Lower Mainland. Why fight the traffic when you can relax aboard a scenic cruise while catching up on rest or work during the 40-minute commute.

Call us today with any additional questions, or for a Free Market Evaluation!

Kenan MacKenzie

604.885.7810 or email: kenan@kenanmackenzie.com

Sarah MacKenzie

778.989.1841 or email: sarah@kenanmackenzie.com