With the release of the last set of market stats from 2017, we’ve had a chance to look back at the highs and lows of the year that was for real estate in Victoria… The highs: the all-time record high average sale price of almost $860K (more than 14% over the previous year), and the lows: the record low level of listing inventory, with most months carrying a only around 1,500 listings (about 25% less than we were used to seeing a few years ago). It’s easy to see how these two conditions interact, with low inventory and continued demand for property driving up pricing.
Predictions for 2018
On a national scale, it is expected to be a year of moderating activity in the market. It will definitely be interesting to see how the new mortgage rules (which will have the effect of reducing the amount purchasers can qualify to borrow to buy a home), and gradually rising interest rates, will affect buyer mobility and therefore market activity. It is widely hoped that the changes, coupled with gradually rising interest rates, will help ease things somewhat, allowing a little more inventory to build up over the year ahead, and helping housing markets to return to a more balanced state.
In our local market I expect we will see somewhat of a continuation of the trends that have defined the market here for the past year - a market that is steady to hot, still favouring sellers, but the silver lining will be that persistent low inventory will be given a chance to build a bit with tightened borrowing regulations and rising interest rates, which will also give rise to gentler upward pressure on pricing resulting in more moderate price growth. I expect to see the overall volume of transactions down slightly from 2017.
Notwithstanding the major forces above which are expected to influence the market most strongly, buyers from the two largest and most expensive markets in Canada continue to show an interest in our city’s incomparable quality of life, (comparatively) affordable prices, and strong job market. Indeed, it is the influence of non-Victoria buyers that will be the unknown factor determining what the market will bear in terms of further price increases.