A number of new government policies and rules came into effect last year, and, as at the end of the Q1 of 2018, we are already starting to see some knock-on effects to the real estate market in Victoria (and beyond).
Many industry experts – as well as real estate investors and homeowners – anticipated a decline in property sales as a result of the changing policy landscape. And, according to the latest figures released by the Victoria Real Estate Board, they may have been correct.
In this post, I’ll look at some of the key Victoria real estate stats for 2018 so far, including the number of housing units being sold, the number of active listing on the market and an overview of current housing prices (don’t worry, it’s not all gloomy!)
Fewer transactions in Feb 2018 vs Feb 2017
The most alarming figure, at least for certain people in the market, is that 19.3% fewer properties were sold in February 2018 compared with the same month last year (from 675 down to 545). This overall stat is represented by a drop in both condominium unit sales and single family house sales (15.5% and 24.4%, respectively).
Let’s take a look at some of the factors that are being attributed to this decrease.
- Victoria is experiencing a long-term low inventory of homes and condominium units on the market, with demand still higher than the supply. In turn, this continuously nudges up prices and creates extra competition for those homes that are available.
- Changing policies are affecting housing tax and interest rates, putting off buyers facing the burden of large mortgages.
- There was an increase in transactions across Victoria towards the end of 2017 as buyers rushed to finalize purchase agreements in time to avoid rising mortgage rates and the prospect of new taxation; more buyers in November and December of last year may explain the relative lack of buyers during January and February 2018.
Low inventory of properties – but positive signs emerging
Anybody who’s lived or known somebody who has lived in the Victoria area will know how tough it can be to find a suitable house or condo to buy here. This is thanks to demand outpacing supply, with new housing developments simply not able to keep up with the influx of young professionals, foreign investors and those choosing to migrate to the BC capital in search of a better lifestyle.
However, there is good news; the total number of listed properties in Victoria is up all most 5% so far this year, with a total of 1,545 active listings for sale according to the Victoria Real Estate Board Multiple Listing Service® site as of 31 Feb 2018. This does, however, only represent a 0.5% increase from the 1,537 properties listed as at the end of February 2017.
Regardless of how one interprets these property listing statistics, the long-term outlook for Victoria is looking more and more promising. This is predominantly thanks to the BC government’s newly-announced budget that promises to inject $6bn into housing development over the next 10 years.
New housing budget, but how will it affect the Victoria real estate market?
According to Victoria Real Estate Board President Kyle Kerr, this “admirable commitment” from the provincial government will result in the construction of a total of 114,000 new units.
“These units will take years to come to market, and it is difficult to predict how many we will see in Victoria”, he said. “The government needs a long-term approach to supply needs in our area, and that initial commitment is a good start. A reasonable way to bolster their commitment and improve current conditions is for the province to work with our municipalities to reduce the timelines and costs associated with bringing new housing to our market.”
Property prices continue to rise
To nobody’s surprise, average house prices in Victoria have grown quite sharply from last year, jumping 9% according to the Multiple Listing Service® Home Price Index.
More specifically, the average value for a single family home in the center of Victoria as at the end of February 2018 was $840,300 ($771,100 for the same in February 2017). For condominium units, the difference is even more startling – with the benchmark value for a single unit in central Victoria jumping almost 20%, from $394,400 in February 2017 to $472,600 in February 2018.
In the long-term, analysts are expecting Victoria property prices to start to cool off, but whether that starts to happen in the next couple of months or over the course of the next few years is still up for debate.
What is clear is that the Victoria property market currently presents huge potential for investors and even first-time buyers, while those looking to sell are constantly faced with the risk of missing out on the optimal time to offload their property. That’s why having knowledgeable, experienced and in-the-know local agent on your side is paramount.
Find out more about the Victoria real estate market and active online listings
You can see the full inventory of active listings in the Victoria area available here on Karie Seiss by clicking here.
For more statistical information about the real estate market in Victoria, including a detailed year-by-year and month-by-month analysis of property transactions, active listings and prices, you can visit The Victoria Real Estate website at www.vreb.org or country-wide insights on the Canadian Real Estate Association website at www.crea.ca/housing-market-stats.