Once a year, my daughter Linda and I travel to Europe as a part of our annual estate marketing strategy. This trip takes us to several European countries over two weeks, including; Germany, Holland, Switzerland, Austria and England. For decades, we have been doing this to network with buyers and sellers promoting properties from our diverse landholding portfolio. This planned tour allows us to take in trade shows, network and take meetings from specific clients that are interested in selling and owning property in British Columbia. We usually find this trip pleasant, but over the course of the last two visits, we have noticed perception changes that will have spin-off consequences to our provincial land market. The “school of thought” with our clients has changed. The average person seems to be way more pessimistic than they were just 24-months ago about the state of European social and economic affairs. After discussing and compiling the feedback, there are several happenings that we can attribute to their somber attitudes. Here in Canada, significant changes will be coming to the landholdings markets as a result the following;
- The European Commission pointed out that Europe is losing 1,000 farms per day, to be accurate 400,000 farms/ranches per year. It is projected that the agriculture industry will decline its crop, livestock, and other agri-production due to climate change in high significant numbers. (base European /Environment Agency EEA)
- Europe powerhouse Germany is in a structural crisis. Angela Merkel was voted with only 30% of the votes, and 70% of the voting population in Germany is not ok with her politics. Angela Merkel’s lax immigration politics does not find the approval of the people.
- France is for months now in a crisis with its population. The movement originated with French motorists from rural areas who had long commutes protesting against an increase in fuel taxes and has developed to a protest about the Macrons pension reforms.
- England is leaving the EU, and for some people, this is the end of the European Union, but for sure, the end for Britain’s prosperity. I personally see a massive chance for new healthy growth of an independent United Kingdom. England did leave Europe for a reason!
- Between the east and west of Europe and the north and south of Europe are significant differences in views about immigration, trade regulation with the US, fiscal politics, and everything else.
Many people we had to pleasure to speak with, foresaw the ending of the European Union, citing factors like the fiscal mismanagement by the European Central bank and their negative yields. That’s the number one reason for Billions of Euros leaving the old continent. Most of the European press is anti-trump, but the money that leaves Europe goes in big margins to the USA, It must not be so bad south of our border! But, when it comes to safety, Canada is the third safest place on this planet, and a lot of European money is also moving in our direction as people leave Europe and look for a more stable future else-where. In the past year, stats show 320,932 immigrants landed in Canada, the most significant annual number since July 1971, when comparable records started. Statistics Canada said in its yearly population count that we saw a 33.3-% increase over the prior year, when 240,844 immigrants came to Canada, the fastest growth in nearly three decades.
The reality is that our population is expanding rapidly, with Canadians and foreigners who are seeking stable land investments within residential and commercial ownership. A large portion of existing BC homeowners are now financially constrained in their own market when selling to repurchasing elsewhere because of the new B20 Stress Test, at the same time imminent lifestyle changes are facing current homeowners with growing families, job location changes and late Boomers reaching their retirement. Despite all the efforts of the new policy by the Federal and Provincial governments to make housing more affordable, BC land and property prices overall, continue to rise again as inventory count gets lower. With the population influx of new BC residents and existing market pressures, one can only deduce that landholdings in the province will get pricier, and they will remain substantial valuable assets.
After calling the overall market “flat” in 2019, the BC Real Estate Board posted December 2019 numbers showing a 48.9% increase in sales over December 2018, despite having 10.6% less active listings. Even with inventory numbers down, 5,218 residential units were sold in December 2019. The average MLS® residential price in BC was $755,165, an increase of 8.7 percent from December 2018. Total sales dollar volume was $3.9 billion, a 61.8 % increase year-over-year. The Okanagan, the Fraser Valley, Greater Vancouver and Vancouver Island all saw record-high sales numbers for December, and after our yearly holiday lull, we should see a continued surge of market activity. In the northern part of the province, December prices were up from 2018, but the sales numbers fell 18% from 2018. Looking forward, the northern spring thaw that happens in March will bring an influx of activity and new listings; this is typical for the regions of the north that are buried under deep snow. Vetting property and moving can be very difficult this time of year, as we should all appreciate, after receiving the large volume of snow and cold weather here in the lower mainland. The recent record sub-arctic temperatures in the Chilcotin, Cariboo and northern BC have been a test to our northern citizen’s hardiness!
In conclusion, we must be aware of the changing levels of the population as many millions are on the move across the country and across the globe. In my opinion, the market is to see much more activity wth the factors explained above as catalysts. The December surge in sales could be the start of a very strong market year in 2020 . If you are making a move in 2020, I urge you to seek out a proven real estate professional who can implement solid estate strategies for your next essential lifestyle move.
Freddy & Linda Marks, 3A® Group with Sutton