In June, the Victoria Real Estate Board (VREB) issued a press release discussing the state of the market. This report focused mainly on government pressures, as well as inventory levels. They concluded that the current uncertainty of the real estate market has, rather predictably, resulted in a lower volume of sales.
The issue that should be addressed, however, is the manner in which housing prices continue to grow across the Greater Victoria area. Last month, the average sale price for a single-family home reached $889,097, while the West Shore—considered an affordable area– averaged a sale price of nearly $600,000.
Looking at Langford, Colwood and Sooke, we see a range of prices and number of sales. These averages, from June, are as follows:
- $694,169 for a home (60 sales)
- $608,900 for a townhome (14 sales)
- $378,655 for a condo (40 sales)
- $787,575 for a home (12 sales)
- $723,250 for a townhome (6 sales)
- $428,250 for a condo (4 sales)
- $578,646 for a home (26 sales)
- $425,767 for a townhome (6 sales)
- No figures for Condos (no sales)
Compare the above to the Greater Victoria area:
- $889,097 for a home (317 sales)
- $615,919 for a townhome (77 sales)
- $485,158 for a condo (229 sales)
As can be seen in the figures above, the area that remains the most affordable and accessible is the Sooke region, with prices markedly lower than the Greater Victoria average. This makes Sooke an especially attractive area for potential homebuyers.
The Victoria region saw a total of 708 properties sold in June, representing a drop of 29.8% from the same time last year, as well as a 6.2% drop from the previous month.
Condominium sales and single-family home sales both dropped compared to the previous year. In the case of condominiums, the reduction was 25.1%, while single family home sales dropped 34.7%
The group most affected by the changes in the market are the entry-level home buyers, as well as those who own homes at the lower-end of the price spectrum. Despite gainful employment, many are unable to purchase a home and thus typically find themselves in the high end of the expensive rental market.
According to Kyle Kerr, president of the VREB, the mortgage stress test has a key impact on the declining sales. “Because of decelerating growth due to aggressive government implementation of policies to reduce demand,” Kerr says, “Victoria’s real estate market has been hobbled since the start of the year when federal restrictions around mortgage qualifications were rolled out.” Even the BC Speculation tax, which is not yet live, and which is limited to the Vancouver/ Kelowna/ Nanaimo/ Capital Region is “dragging the market down as many consumers stand aside to watch what happens.”
At the end of June 2018, there were 2,595 listings for sale on the VREB MLS, representing an increase of 8.4% over the previous month, and 35.5% over the same period the year before.
According to Kerr, properties are lingering on the market longer than usual, and “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.”
Kerr hopes to see more listings over the coming months, adding that if this occurs, “we may be heading back into a more balanced market situation.”
In the meantime, Sooke remains the area to keep an eye on. Prices may be increasing, but Sooke is still the most affordable region for those looking to make a purchase.