To borrow from Shakespeare, neither buyers nor sellers be advantaged soon in Victoria’s real estate market.
Figures from Victoria Real Estate Board show that the market is approaching “balance” based on the ratio of sales to active listings. A market appears “balanced” when the ratio hovers between 15 and 20 per cent. According to the December figures, the ratio hovers just above 20 per cent with the trend line decidedly pointing downwards, as sales continue to drop.
Compared to December 2017, sales in December 2018 dropped 18.8 per cent with 375 units sold. Compared to November 2018, sales dropped 24.7 per cent.
Looking at the overall year, 7,150 properties sold over the course of 2018, 20 per cent fewer than the 8,994 sold in 2017.
Kyle Kerr, VREB president, said these developments confirm the influence of government on the market, which was already showing signs of levelling out through the latter part of 2017.
“All levels of government turned their focus to try to make housing more affordable and attainable across the property spectrum,” he said. “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.”
The provincial government, as well as municipal governments, stepped up efforts to improve the supply of housing.
“These developments 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,” he said.
One shorthand measure of this increased supply is the number of active listings. VREB listed 1,988 properties for sale at the end of December — up 43.6 per cent from December 2017.
Prices also show softening. While the benchmark value for a single family home in the Victoria core (which includes Saanich) rose by 3.2 per cent to $858,600 compared to December 2017, it actually dropped compared to November 2018, when it stood at $865,200.
Kerr predicts that the downward trends of 2019 will continue. “Inventory is still quite low when you look at a longer range, which will continue to put pressure on pricing,” he said. “Our overall economy is predicted to slow slightly, and that will likely mean a slower increase in interest rates but also slower growth.”
On the upside, savvy buyers will have more time to find their new homes, he said.