By Ozzie Jurock
No one went on holidays in December. Realtors are smiling. The grinch stayed away and Santa flew in with big commission cheques. Real estate sales roared throughout Canada (and yes, also the US) in 2001. The lowest percentage volume increase came in Edmonton, which still recorded a RECORD number of sales - at 13% higher. Sales volume throughout BC rocketed on average some 30% higher in most communities (except natural resource based ones).
Edmonton, Toronto and Calgary had their best years ever in terms of volume of sales, beating all previous highs. BC's volume was sharply higher percentage-wise, but still lagged behind the previous records set in 1992/93/94.
Prices were higher in Toronto (+4% to $251,500 on a y-t-d basis - up 7% December over December). Prices for Toronto were the best in 10 years (only the late eighties saw higher average prices - reaching $295,000 in 1989). They were higher in Edmonton (+ 7% to $150,200 for single family homes, up 5% overall), in Calgary (+ 3% to $182,100) and higher in Victoria (+3% to $253,400).
However, in BC, prices were all over the place. Vancouver Island, while up overall, saw December prices declines in Campbell River (-10% to $119,100), Nanaimo (-4% to $138,400 ) and Port Alberni (-22% to $72,750). Prices were up in the Fraser Valley for single family homes (+6% to $252,200), however down for apartments by 5% (from $104,000 to $98,700). Vancouver Island clocked in at 4% higher at $153,511 from $146,300. The Central Okanagan average price rose to $200,000 and its December sales increased by 75% (y-t-d increase: 13%).
In Vancouver total average prices were down by 2% to $285,900, however up by 2% for resale single family homes (from $360,200 to $369,300), 3% higher for attached house (to $233,900 from $225,100) and stood even for resale condos ($163,500 from $164,100). However a much better year and clearly laying a solid foundation for 2002.
A look at the last ten years shows that despite record volumes that beat all previous records in the rest of Canada, BC still languishes behind volume achieved in 1992-1994.
We like: low interest rates, combined with record low vacancy rate levels show returns on individual properties from 14% to 19%. We like the great deals available throughout the BC market place still. We predict the economy will do better than generally forecast.
Overall however, with record low interest rates, record low vacancies, well selected and researched investment properties make good sense. Forget Location, Location, Location, TIMING IS IMPORTANT ... this applies to all of BC: If you are young (Under 60) and cocky: GO FOR THE BRASS RING: Build a great no money down portfolio in 2001. Great LOW prices, great SOLID rental market, EXCELLENT upside." In 2002 this is still possible. The average real estate investment cash flows like never before. Deals abound. Be creative, get that professional working for you ... and buy.
Principles remain however: No matter where and what you buy: YOU MAKE THE MOST MONEY IN REAL ESTATE ON THE DAY YOU BUY ... and this usually is in a low market ... Still buy cautiously - deal of a lifetime stuff.
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