While British Columbia’s housing market is in a “mild recession”, Vancouver Island’s real estate market is actually generally stable, according to a new BC housing report from Central 1 Credit Union.
There has been a 40 per cent decline in aggregate sales year-over-year across B.C. year-over-year, but Central 1 pointed out that the decline in Victoria has not been nearly so severe.
New mortgage “stress tests” and a clampdown on real estate speculation are headwinds to broad demand, said Central 1, but some housing markets including Greater Victoria continue to be supported by local factors such as employment and population growth and demographic change, particularly in areas like Vancouver Island.
The result for now is that while sales have decreased on Vancouver Island, lower supply and solid demand has kept prices firm and rising particularly in communities outside of the Victoria core.
In a news release from the beginning of January, the Greater Victoria Real Estate Board (VREB) reported that a grand total of 7,150 properties sold over the course of 2018, 20 per cent fewer than the 8,994 sold in 2017.
In 2018, sales came in very close to the ten-year average of 7,351 properties sold, according to VREB. Condominium sales totalled 2,162 in 2018, compared to 2,783 in 2017. Single family home sales were down from 4,069 in 2017 to 3,187 in 2018.
The federal government’s change to mortgage lending qualification rules this year meant many consumers lost 20 per cent of their purchasing power, which contributed to slowing down the pace of the market, said VREB in its January update.
One bright spot is that many municipal councils are actively looking to make investments in affordable housing with an aim to bringing new units to market, and the provincial government has also promised huge investments into new affordable developments.
“These (government plans to increase affordability by increasing supply) are important to the long-term growth of our community, because the only way to make more affordable housing in our area is to build it,” said VREB.
The Greater Victoria Real Estate Board reported that a total of 375 properties sold in the Victoria region in December, 2018, a 19 per cent decline compared to December, 2017, when 462 properties were sold. There was also a 24.7 per cent decrease in sales in December from November.
There were 1,988 active listings for sale on the Multiple Listing Service at the end of December 2018, a decrease of 15 per cent compared to the month of November but 43 per cent more than the 1,384 active listings for sale at the end of December 2017.
The benchmark value for a single family home in Greater December 2017 was $832,000. The benchmark value for the same home in December 2018 increased by 3.2 per cent to $858,600, lower than November’s value of $865,200.
“The market in 2019 will continue to be quieter than in previous years, as buyers and sellers adjust to new market conditions and government policies,”said VREB. “Inventory is still quite low when you look at a longer range, which will continue to put pressure on pricing… The good news is that savvy buyers will have more time to find their new homes, and that sellers will be under less pressure if they are planning to move within our market.”