New figures show that local real estate sales continue to decline but at a slower rate.
According to the Victoria Real Estate Board (VREB), regional sales in April 2018 dropped by 12.5 per cent compared to the same period last year. Compared to March 2018 though, sales rose 12.5 per cent. So has the bleeding stopped?
“It’s a good question,” said Kyle Kerr, VREB’s president. “I think we are starting to see the spring market pick up.” Kerr said May and June were the busiest and this pattern may repeat but on a “slightly smaller scale” than last year, since sales for the year are down 18 per cent compared to 2017.
While Kerr said sales so far have been “quite far” behind last year’s pace, he also expects sales to strengthen during the spring months.
This said, the market is still trying to sort itself out as buyers continue to adjust to new mortgage rules.
“People are still unsure about where the market is heading,” said Kerr.
Another uncertainty concerns the speculation tax that the provincial government introduced this February as part of a larger package to improve housing affordability.
While the government will not table the appropriate legislation until September 2018, Kerr said it has helped to depress the upper-end market. At the lower end of the market though, demand is picking up and listings often inspire competing offers, he said.
Overall, Kerr said he sees no single market, but rather several micro-markets that require skilled navigation.
Looking at the numbers, sales have declined against the backdrop of increased supply but also rising prices. The number of active listings totaled 2,002 at the end of April 2018, up 13.4 per cent compared to the month of March and 18.5 per cent. But this increase has not impacted prices.
The Home Price Index (HPI) benchmark value for a single family in Victoria’s core rose 8.3 per cent to $866,700 compared to the same period last year. Corresponding condominium prices rose even faster. In April 2017, the benchmark value of a condominium in Victoria’s core was $418,200. A year later, it has risen to $495,100.
“Part of the reason for this is that there is strong pressure on lower-priced properties,” said Kerr. “After the new mortgage rule changes this year, many consumers have seen a reduction in their buying power, so more are competing for lower-priced properties and in multiple offer situations, pricing is pushed up. Our area just doesn’t have the supply or mix of homes needed to meet the demand.”
Looking at the sales-to-active-listings ratio, the region remains a seller’s market. While far off from the peak of March 2017 when the ratio approached 90 per cent, the current ratio stands at 50 per cent – some 30 per cent above the figure when the market becomes a seller’s market.
Looking at Saanich numbers, the benchmark value of a single-family home in Saanich East was $907,000 and $724,200 for Saanich West. Overall, total sales in Saanich topped $100 million in sales for single family homes.