Spring Market Update

"The story arc in real estate for 2018 was the impact of government influence on a market which was showing signs of levelling out through the latter part of 2017," says outgoing Victoria Real Estate Board President Kyle Kerr. "All levels of government turned their focus to try to make housing more affordable and attainable across the property spectrum. 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. On a municipal level, we saw many councils activating how they can influence affordable housing by leveraging current land assets, acquiring new land and creating partnerships to bring new affordable units to market - and that's a very exciting thing for our market in the long term. The provincial government has also promised huge investments into new affordable developments...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," adds President Kerr. "Inventory is still quite low when you look at a longer range, which will continue to put pressure on pricing. Our overall economy is predicted to slow slightly, and that will likely mean a slower increase in interest rates but also slower growth. 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."

A total of 421 properties sold in the Victoria Real Estate Board region this February, 22.8% fewer than the 545 properties sold in February 2018 but a 28% increase from January 2019. Sales of condominiums were down 25.9% from February 2018 with 129 units sold but were up from January 2019 by 16.2%. Sales of single family homes were down 15.8% from February 2018 with 219 sold.

"Buyers and sellers appear to be looking at the current real estate market from different perspectives," says Victoria Real Estate Board President Cheryl Woolley. "Buyers are hoping to see reductions in prices because governments have told the public that policies like the mortgage stress test and the speculation tax will improve affordability. However, the actual result of some of these policies seems to have softened the higher priced end of the market and increased competition for properties at the lower priced end. Conversely, sellers may be holding out to see if prices increase in the spring, and those hoping to up-size may be unable to qualify for the funds needed to move up because of the stress test...Currently, we still have very low inventory compared to the long-term average with little having come into the market this past month. As the spring thaw comes, there's a good chance more listings will come onto the market which will create more options for prospective buyers."

There were 2,131 active listings for sale on the Victoria Real Estate Board MLS® at the end of February 2019, an increase of 3.6% compared to the month of January and a 37.9% increase from the 1,545 active listings for sale at the end of February 2018.