Lower inventories helped to depress year-to-year real estate sales in the first month of 2022 but also contributed to higher prices.
Realtors sold 474 properties in the Victoria Real Estate Board (VREB) area in January 2022, 26.6 per cent fewer than in January 2021 but up 8.2 per cent from December 2021. With sales up in January 2022 relative to December 2021, prices also rose. A single-family in the core region of VREB cost $1.161 million in January, up from $1.144 million in December.
Perhaps the most significant figure concerns inventory. Compared to January 2021, inventory in January 2022 was down 43.7 per cent to 744 active listings.
“To put our inventory into context, last year broke the record for lowest inventory for the month of January,” said Karen Dinnie-Smyth, VREB’s president. “This January broke that record nearly in half and that lack of supply in the market really impacts what our end sales numbers are. Had we seen more homes for sale, it’s likely our result would have been many more sales.”
Dinnie-Smyth said sales will not perk up until inventory improves. “This means we need to see supply added of all types of housing and we need to establish a sustainable source of supply into the upcoming years to meet growth,” said Dinnie-Smyth. “The reality of housing is that it takes years to add new numbers and until we are better able to meet demand, our market will be under pressure.”
Looking across the region, the benchmark price for a single-family home on the West Shore was $962,400, for the Saanich Peninsula it was $1.197 million.
A closer analysis by local realtor and analyst Leo Spalteholz on househuntvictoria.ca shows that 70 per cent of detached sales went over ask, while 66 per cent of condo sales went the same way, blowing away the high water mark for both.
“Engineering bidding wars is a logical strategy for sellers given the evidence that it may work to secure higher prices in hot markets, but it leads to a continuation of the miserable situation for buyers,” he said. “It’s going to be very interesting how the coming cooling-off period will hit a market where the majority of properties are going over ask, most with no conditions.”
For Spalteholz, prices, especially for detached properties, have entered what he calls “uncharted territory on the affordability side” with worse to come. “(And) that’s before the rising rates that the Bank of Canada has effectively guaranteed are coming,” he said. “While there was a lot of focus on the lack of an interest rate increase in January, they took great pains to make it clear that the era of emergency rates is over.”
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