New real estate figures show 2019 was statistically a better year than 2018 for the Greater Victoria housing market, but well down from the industry’s recent peak.
According to the Victoria Real Estate Board, Greater Victoria realtors sold 7,255 properties over the course of 2019 – about 1.47 per cent more than the 7,150 units sold in 2018. By comparison, 10,622 properties sold during the 12 months of 2016 in breaking the previous record of 9,241 set in 1991. Sales dropped to 8,994 in 2017, which saw the inauguration of tighter mortgage lending rules first announced by the federal government in 2016. Overall, real estate sales dropped by almost 32 per cent to 2019 from 2016.
This downward trajectory of sales has continued through 2018 into 2019 with the total number of sales slightly under the ten-year average of 7,413 properties sold. By way of background, 2018 also witnessed the introduction of a speculation tax on the provincial level with the design of curbing the purchase of second homes.
Looking back at 2019, Cheryl Woolley, VREB’s president, said it opened against the backdrop of these regulatory changes “designed to calm housing market activity” with Wolley noting that “activity had already begun to slow” following the “hyper-active market in 2016/17.”
Woolley said tighter mortgage lending rules represented “most impactful government change.” She said it lowered consumer borrowing power and disqualified many, therefore compressing more demand into the mid- and lower-priced property market.
“Constant demand on this middle housing segment has put a moderate amount of pressure on pricing,” said Woolley. “And although we did not see huge price increases though 2019 like we did in the run up through 2016, we do see buyers entering into multiple offer situations and competing for properties.”
If mid-to-lower-priced properties are generating demand, the upper-end market has softened, a development that may benefit a “small percentage of buyers,” but difficult on sellers who have seen some equity erode.
Looking ahead to 2020, selection for single-family home appears limited with “growth in pressure for more condos and townhomes.”
Looking at prices, the Home Price Index benchmark value for a single family home in the Victoria core in December 2019 was $855,000, down some 0.6 per cent from December 2018. Prices elsewhere in the region have varied.
On the West Shore, single family homes rose in value by 1.4 per cent in December 2019 compared to December 2018 to $643,200. On the Peninsula, values rose by 0.2 per cent compared to December 2018 to $777,100.
Looking at Greater Victoria as a whole, the benchmark value rose by 1.1 per cent compared to December 2018 to $753,100.
If prices for single family homes were sluggish across the region, the value of condos rose in Victoria core (up 3.5 per cent) and West Shore (up 3.3 per cent), while dropping on the Peninsula (down 0.8 per cent).
Values for townhouses fell somewhere in between family homes and condos, rising in Victoria core (up 1.2 per cent) and West Shore (up 2.6 per cent) while down on the Peninsula (down 1.5 per cent).
Looking at December 2019 listings, they were down almost 19 per cent compared to November 2019 and down almost two per cent compared to December 2018.
These numbers confirm the broader dynamic that sees the West Shore generating more interest from buyers, with more expensive regions, such as the Victoria core and Peninsula, becoming less attractive. Assessments up in most West Shore communities, and down elsewhere.
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