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Market Updates

June 2018 Victoria Real Estate Market Conditions

Continued uncertainty brings predictable results for the Victoria real estate market

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A total of 708 properties sold in the Victoria Real Estate Board region this June, 29.8 per cent fewer than the 1,008 properties sold in June of last year, and a 6.2 per cent decrease from May 2018. The sales of condominiums were down 25.1 per cent from last year in June with 230 units sold. Sales of single family homes were down 34.7 per cent from 2017 with 357 sold this June.

"June typically signals the conclusion of the busy spring market, and activity lightens into the summer," says Victoria Real Estate Board President Kyle Kerr. "However, because of decelerating growth due to aggressive government implementation of policies to reduce demand, Victoria's real estate market has been hobbled since the start of the year when federal restrictions around mortgage qualifications were rolled out. Even demand side measures that are not yet live, like the Vancouver/Kelowna/Nanaimo/Victoria-specific Speculation Tax, are dragging the market down as many consumers stand aside to watch what happens."

There were a total of 2,595 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of June 2018, an increase of 8.4 per cent compared to the month of May and 35.5 per cent more than the 1,915 active listings for sale at the end of June 2017.

"The good news is that inventory is slowly being added to the market, though we are still very far off from our ten year average inventory level of 4,100 listings" adds President Kerr. "The slower pace of the market has created more time for buyers who may have been hesitant to jump in during the high pressure market conditions of recent years. Homes are spending a bit longer on the market and there are fewer multiple offer situations than in the past, and if we see more listings over the next few months we may be heading back into a more balanced market situation. Every type and location of property is a separate segment of our market, and there are varying pressures and demands, so if you are buying or selling it is wise to take advantage of the services of your local REALTOR® to help navigate this changing market."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in June 2017 was $829,600, while the benchmark value for the same home in June 2018 increased by 7.2 per cent to $889,600, higher than May's value of $878,100. The MLS® HPI benchmark value for a condominium in the Victoria Core area in June 2017 was $430,400, while the benchmark value for the same condominium in June 2018 increased by 15.4 per cent to $496,500, slightly higher than May's value of $493,900.

May 2018 Victoria BC Real Estate Market Conditions

Price Pressure Continues on Lower-Priced Housing in the Capital Regional District

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A total of 755 properties sold in the Victoria Real Estate Board region this May, 25 per cent fewer than the 1,006 properties sold in May of last year, and a 2.5 per cent decrease from April 2018. The sales of condominiums were down 17.4 per cent from last year in May with 237 units sold. Sales of single family homes were down 23 per cent from 2017 with 406 sold this May.

"It's no surprise that our current market is very different than it was last year," says Victoria Real Estate Board President Kyle Kerr. "Due to recent changes in mortgage qualification rules, many buyers' purchasing power has been reduced. Unfortunately, in our area we have one third fewer single family homes for sale under $750,000 when compared to last year, so we're seeing pressure from increased competition on a smaller number of homes, which is really pushing the under million dollar market. We have a much larger inventory of higher value homes this year. For listings priced at $1.5 million and above, the number of active listings is almost 50% higher than last year at this time. Arguably, many of these properties may be listed due to new and incoming taxes from the provincial government. The Foreign Buyer Property Transfer Tax, the Speculation Tax, and the increased School Tax are putting pressure on those high value home owners. Unfortunately, these taxes are not resulting in what the government said it intends - to increase the availability of affordable housing."

There were a total of 2,394 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of May 2018, an increase of 19.6 per cent compared to the month of April and 26.3 per cent more than the 1,896 active listings for sale at the end of May 2017.

"We're in an interesting time here - we are seeing different levels of price pressure and price relief in micro-climates of our area," adds President Kerr. "You may find more flexibility if you are shopping for a multi-million dollar estate in certain areas. You may be in for a competition if you're shopping for a lower priced home or condominium. If you're thinking of buying or selling, it's a good idea to meet with a local REALTOR® to understand how the current environment will affect you."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in May 2017 was $820,800, while the benchmark value for the same home in May 2018 increased by 7 per cent to $878,100, higher than April's value of $866,700. The MLS® HPI benchmark value for a condominium in the Victoria Core area in May 2017 was $426,900, while the benchmark value for the same condominium in May 2018 increased by 15.7 per cent to $493,900, slightly lower than April's value of $495,100.

April 2018 Victoria BC Real Estate Market Conditions

Slower start to spring does not signal lower prices for Victoria real estate market

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A total of 774 properties sold in the Victoria Real Estate Board region this April, 12.5 per cent fewer than the 885 properties sold in April last year, but a 12.5 per cent increase from the month previous. The sales of condominiums were down 21.6 per cent from last year in April with 225 units sold. Single family homes were 8.1 per cent down from the year previous with 420 sold this April.

"We're now into the spring real estate market, which is traditionally the busiest time of the year for buying and selling homes," says Victoria Real Estate Board President Kyle Kerr. "Last year, the months of May and June were the busiest, so we may see this pattern again but on a slightly smaller scale than last year, since our sales for the year thus far are down about 18 per cent when compared to 2017. Although January to March was quite far behind last year's pace, we may see that margin get smaller as we progress through the spring months and people adjust to the new mortgage qualifying rules."

There were a total of 2,002 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of April 2018, an increase of 13.4 per cent compared to the month of March and 18.5 per cent more than the 1,690 active listings for sale at the end of April 2017.

"We continue to see low inventory in our market, and good homes in desirable locations are still seeing multiple bids," adds President Kerr. "One interesting development we are tracking is the increase of prices in a market of fewer sales. Part of the reason for this is that there is strong pressure on lower-priced properties. 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. We are working with government at all levels to identify ways to meet this demand in the CRD."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in April 2017 was $800,100, while the benchmark value for the same home in April 2018 increased by 8.3 per cent to $866,700, higher than March's value of $859,400. The MLS® HPI benchmark value for a condominium in the Victoria Core area in April 2017 was $418,200, while the benchmark value for the same condominium in April 2018 increased by 18.4 per cent to $495,100, which is higher than March's value of $490,000.

March 2018 Victoria BC Real Estate Market Conditions

March 2018 Victoria BC Real Estate Market Conditions

Outside Influences Impact Spring Real Estate Market in Victoria

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A total of 688 properties sold in the Victoria Real Estate Board region this March, 25.9 per cent fewer than the 929 properties sold in March last year, but a 26.2 per cent increase from the month previous. The sales of condominiums were down 28.2 per cent from last year in March with 211 units sold. Single family homes were 30.8 per cent down from the year previous, with 337 sold this March.

"As we expected, March sales are tracking lower than in 2017," says Victoria Real Estate Board President Kyle Kerr. "This is likely due to a number of factors that have created hesitation in consumers, including recent heavy measures by the provincial government to reduce the value of home prices and the federal government's new mortgage qualification rules. Combine these factors with rising interest rates and you've got a housing market that is in transition due to outside influences. Every time there is intervention into a market, it takes a few months for the market to rebalance. With the continual changes of late from different levels of government, our market is experiencing a new cycle of ongoing uncertainty."

There were a total of 1,766 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of March 2018, an increase of 14.3 per cent compared to the month of February and 13.5 per cent more than the 1,556 active listings for sale at the end of March 2017.

"Despite all of the above, we continue to see benchmark price increases across our market and demand persists - partly due to low inventory - but also because of our highly desirable location," adds President Kerr. "Specific areas and price points are experiencing varying pressure on price and demand - which creates micro-markets. We are still seeing multiple offers and above asking price sales in some segments. Active buyers in our market may see some relief as inventory is slowly growing. This showcases why it is important to work with your local REALTOR® in this transitioning market to ensure you have the most up-to-date information to make purchasing and selling decisions."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March 2017 was $785,600, while the benchmark value for the same home in March 2018 increased by 9.4 per cent to $859,400, higher than February's value of $840,300. The MLS® HPI benchmark value for a condominium in the Victoria Core area in March 2017 was $409,700, while the benchmark value for the same condominium in March 2018 increased by 19.6 per cent to $490,000, which is higher than February's value of $472,600.

February 2018 Victoria BC Real Estate Market Conditions

Victoria Real Estate Market Adapts to Changing Policy Landscape

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A total of 545 properties sold in the Victoria Real Estate Board region this February, 19.3 per cent fewer than the 675 properties sold in February last year. The sales of condominiums were down 15.5 per cent from last year in February with 174 units sold. Single family homes were 24.4 per cent down from the year previous, with 260 sold this February.

"We certainly anticipated that we would see some lower numbers this year compared to last," says Victoria Real Estate Board President Kyle Kerr. "Right now prospective home buyers are met with many hurdles as they start shopping for their new home. They're in a market that's experienced long-term low inventory, which means more price pressure and competition on homes. Buyers are navigating increasing interest rates and the new mortgage stress test. These factors all combine to constrain our market. Like any changes to consumer experience, there is a period of response before consumers adapt to the new rules. We saw an increase in buyers in November and December who bought early to avoid the mortgage stress test, and this likely means less buyers in the current market. However, with continued historical low inventory levels, demand is still outpacing supply."

There were a total of 1,545 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of February 2018, an increase of 3.6 per cent compared to the month of January and 0.5 per cent more than the 1,537 active listings for sale at the end of February 2017.

"The provincial government recently rolled out its budget, which includes an admirable commitment to spend six billion dollars to build 114,000 units in ten years," adds President Kerr. "These units will take years to come to market, and it is difficult to predict how many we will see in Victoria. 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."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in February 2017 was $771,100, while the benchmark value for the same home in February 2018 increased by 9 per cent to $840,300, slightly higher than January's value of $831,900. The MLS® HPI benchmark value for a condominium in the Victoria Core area in February 2017 was $394,400, while the benchmark value for the same condominium in February 2018 increased by 19.85 per cent to $472,600, which is slightly higher than January's value of $460,500.

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