Victoria Real Estate Market Slowly Stabilizing after a Record Breaking 2016

November 1, 2017 A total of 664 properties sold in the Victoria Real Estate Board region this October, 9.7 per cent fewer than the 735 properties sold in October last year.

"As expected, we saw fewer sales than this time last year," notes Victoria Real Estate Board President Ara Balabanian. "Looking at the longer term picture however, sales last month were 17.1 per cent above the ten year average of 567 properties for the month of October, so the market is still very active here in Victoria, and this is in spite of the ongoing low inventory levels."

There were 1,905 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of October 2017, a decrease of 3.6 per cent compared to the month of September and 1.7 per cent fewer than the 1,938 active listings for sale at the end of October 2016.

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in October 2016 was $752,000. The benchmark value for the same home in October 2017 has increased by 9.3 per cent to $821,900, but is lower than July's value of $834,200.

"The fact that we've seen such a controlled levelling off in the market directly following a year which felt so uncontrollable in terms of demand and pressure on prices illustrates the depth and stability of the Victoria market. An unstable market may have experienced a heavy correction or shift, whereas in our market sales are moderating at a reasonable rate." adds President Balabanian. "In the coming months we expect to see less inventory on the market, because the year end changes buyer and seller behaviours, their focus shifts to holidays and winter weather. One unknown influence that may play on the winter market is the upcoming mortgage stress test. Some buyers may move their purchasing timelines forward to make their home purchases before the stress test on uninsured buyers (those with a downpayment of 20 per cent or more) becomes required January 1."

In the Fall of 2016 insured mortgages (less than a 20% down payment) were hit with the stress test, it was announced last week that conventional mortgages (20% or more down payment) will now be stress tested as well!

What is the mortgage stress test? 

It means that those mortgage borrowers with a 20% or more downpayment will have to qualify at the GREATER of the Bank of Canada posted rate (currently 4.89%) or the contract rate +2%. This decreases buying power by about 15-20% for those purchasers. The goal of OSFI is to ensure that Canadians can absorb higher payments for potential interest rate increases. 

Example:
Today if a client qualified for a mortgage of $500,000, that would be a purchase of $625,000 with a 20% downpayment.
On January 1, 2018 the same client would qualify for a mortgage of about $425,000, which would be a purchase price of about $535,000, with a 20% downpayment.

Stress testing for conventional mortgages will come into effect on January 1st, 2018, however there is still some ambiguity around exact details for dates. As it stands right now if you enter into a deal and have the lender approval prior to January 1st, 2018 you will qualify under the existing rules, even if the deal is completing in 2018. Some of these details are subject to change as more guildelines and regulations are rolled out. 

For more details on the impacts this could have on you and our market see the post from Spin Mortgage Here!

My Greater Victoria Real Estate Market Update for the Fall is now available! 

As we enter Fall, Greater Victoria is seeing a consistently active real estate market, but we are very slowly inching towards more balanced conditions. A total of 640 properties sold in the Victoria Real Estate Board region this September, 18.1% fewer than the 781 properties sold in September last year. The ten year average for sales in September is 573 properties and the month still exceeded that average by more than 10%. Recently we’ve seen overall price increases level out, which can indicate slightly less demand, and inventory is building. After a small decrease and a consistent number of active listings over the Summer, there were 1,976 active listings for sale on the Victoria Real Estate Board MLS® at the end of September 2017, an increase of 3.1% compared to the month of August and 4.1% fewer than the 2,061 active listings for sale at the end of September 2016. August was the first month we've noted a decrease in HPI values since August 2015, the August HPI benchmark value for single family homes in the Victoria Core area decreased by 1.3% when compared to July, however other product such as condominiums in the Victoria Core has seen HPI values continuing to increase. We have also seen a strong focus on the lower priced end of the market, with condos, townhomes and single family homes listed for under $700,000 in high demand. Many of those properties saw multiple offer situations.

The Bank of Canada raised their interest rates for the second time in just a couple months by another 0.25% to 1%, the banks have now raised their prime lending rates to 3.20%. We could be seeing another increase this Fall, if you are thinking of buying and get a pre-approval the rates available for you at that time will be held for 90 days as you search for your new home. Last October the Canadian Government introduced "stress testing" to high ratio mortgages, less than a 20% down payment, meaning you are qualified for a mortgage at the Bank of Canada posted rate and the purchase price you qualify for is about 20% less than at our current interest rate. This may be introduced to conventional mortgages, more than a 20% down payment, in the new year, if you have any questions about how this could affect you feel free to contact me at mikaila@mikailarhodes.com or 778-679-1028.

There is an exciting new development coming to the market this Fall for home buyers that are looking to purchase in a new building Downtown. Chard Developments has announced their new building Vivid on the 800 block of Johnson St. will be priced at 8% under market value! There will be qualifications to purchase in the building such as an income of less than $150,000 and living in the home for two years after move in, they anticipate prices will be in the range of $275,000-$550,000. This is a great opportunity for first time home buyers to purchase in a quality development at a great price point!  

Fall on Vancouver Island is so beautiful, and one of my favourite weekend getaways lately has been Salt Spring Island! With so much to do including local cideries, wineries, breweries, Salt Spring Island Cheese, galleries, the amazing Saturday market, exploring Ganges, and a wide variety of hikes, lakes and beaches it is the perfect place to enjoy a couple days with your favourite person!

To celebrate Thanksgiving and the beginning of Fall I am giving away a ONE NIGHT STAY at the Salt Spring Inn located in the Heart of Ganges, with a $40 Gift Card for Brunch! The Saturday market is even running until the last Saturday of October 

Victoria Real Estate Market Changes Tempo for Autumn

October 2, 2017  A total of 640 properties sold in the Victoria Real Estate Board region this September, 18.1 per cent fewer than the 781 properties sold in September last year.

“We can certainly feel the difference in the current market when we compare to last year’s record breaking numbers. Last year the pace of the market was intense, there was a lot of pressure on pricing and demand,” notes Victoria Real Estate Board President Ara Balabanian. “Now the tempo of the market is trending slowly – very slowly – towards more balanced conditions. Recently we’ve seen overall price increases level out, which can indicate slightly less demand, and inventory is building.”

There were 1,976 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of September 2017, an increase of 3.1 per cent compared to the month of August and 4.1 per cent fewer than the 2,061 active listings for sale at the end of September 2016.

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in September 2016 was $742,200. The benchmark value for the same home in September 2017 has increased by 10.9 per cent to $823,100.

“Simply because we’ve seen sales drop from last year is not dire or unexpected news for our local real estate market.” adds President Balabanian. “The ten year average for sales in September is 573 properties and the month exceeded that average by more than ten per cent, which indicates we’re still in an active market. And of course there are neighbourhoods that are still tracking up in terms of value from last year. It’s for reasons like these that now more than ever it makes sense to seek the assistance of a local REALTOR® to sell or buy your home.”

Victoria Real Estate Market Statistics for August 2017

Sept 1, 2017 - A total of 736 properties sold in the Victoria Real Estate Board region this August, 16.6 per cent fewer than the 883 properties sold in August last year. 

"I admit to being a little surprised by the August numbers," notes Victoria Real Estate Board President Ara Balabanian. "I expected inventory numbers to be climbing by now, but instead we've seen even lower numbers of listings on the market. This is likely leading to some buyer fatigue along with pressure on pricing in high demand areas."

There were 1,917 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of August 2017, a decrease of four properties compared to the month of July, and 8.5 per cent fewer than the 2,094 active listings for sale at the end of August 2016. 

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in August 2016 was $743,200. The benchmark value for the same home in August 2017 has increased by 10.8 per cent to $823,100. 

"Though much too early to call a trend, we do see that the August HPI benchmark value for single family homes in the Victoria Core area has decreased by 1.3 per cent when compared to July. This is the first time we've noted a decrease in HPI values since August 2015." adds President Balabanian.  "That said, this is not an indicator of a huge change in property values across our region. We've seen a phenomenally busy two years in real estate for our area and we are likely heading towards a period of more balanced activity. Note too, that though the overall HPI value shows a small month over month decrease - specific areas and specific types of product have seen increases. For example, condominiums across the entire region are up by half a percent compared to the previous month and single family homes in North Saanich have increased in benchmark value by almost one per cent. It's for reasons like these that now more than ever it makes sense to seek the assistance of a local REALTOR®  to sell or buy your home."

Largest Cohort of Millennials Changing Canadian Real Estate, Despite Constraints of Affordability and Mortgage Regulation

National survey shows while the peak millennial dream to own property is very strong, challenges to homeownership vary across the country

TORONTO, August 17, 2017 – According to the Royal LePage Peak Millennial Survey released today, high home values in Canada’s largest urban markets and job uncertainty in other regions mean new strategies and different priorities for ‘peak millennials,[1] a term coined to describe the largest cohort of the millennial demographic and the impact of their potential purchasing power[2].

The article above provides insight into the Peak Millennial demographic, below are some interesting statistics and take aways:

-With peak millennials as a group now reaching their late 20s, the number of people aged 25 to 30 is projected to increase 17 per cent in 2021 compared to 2016.[4]

-The cross-Canada survey conducted by Leger found that 87 per cent of Canadians aged 25 to 30 believe homeownership is a good investment. Yet, while 69 per cent hope to own a home in the next five years, 57 per cent of those surveyed believe they will be able to afford one.

-Thirty-five per cent of peak millennials surveyed already own a home, while another 50 per cent are renting and a further 14 per cent are living with their parents.

-When looking to purchase a property, 75 per cent of peak millennials surveyed would look to use their personal savings for a down payment, with 37 per cent seeking out alternative means of funding as well, like financial support from their families (25 per cent).

-Though 61 per cent of peak millennial respondents across Canada would prefer to buy a detached home, only 36 per cent believe that they will realistically be able to find a property within this market segment.

-64 per cent of peak millennials currently believe that homes in their area are unaffordable, with a significant proportion of respondents in both British Columbia (83 per cent) and Ontario (72 per cent) asserting that prices are simply too high.

Victoria Real Estate Market Remains Hot Into the Summer Months

Aug 1, 2017 - "The activity level in the Victoria real estate market continues to be brisk, though we always expect a slowdown in the summer months," says 2017 Victoria Real Estate Board President Ara Balabanian. "This July, we saw a strong focus on the lower priced end of the market, with condos and townhomes and single family homes listed for under $700,000 in high demand. Many of those properties saw multiple offer situations."

A total of 790 properties sold in the Victoria Real Estate Board region this July, 18.7 per cent fewer than the 972 properties sold in July last year. 

"The ten year average for sales in July is just over 700 properties," adds President Balabanian. "So the numbers from last month illustrate an ongoing demand for homes in Victoria. We anticipated at the beginning of the year that we would see another busy market - without the record breaking numbers we saw in 2016 - and we are seeing exactly that. The surprise has been the low inventory levels, with listings for sale consistently below 2,000. The good news is that compared to the start of the year we have 26.7 per cent more listings on the market, but that supply is still lower than we expected, which puts pressure on pricing and availability."

There were 1,921 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of July 2017, an increase of 0.3 per cent compared to the month of June, but 11.1 per cent fewer than the 2,161 active listings for sale at the end of July 2016. 

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in July 2016 was $737,800. The benchmark value for the same home in July 2017 has increased by 13.1 per cent to $834,200. 

For August I am giving away TWO TICKETS to the Great Canadian Beer Festival on SATURDAY, September 9th from 12:00pm-5:00pm!

This is one of my favourite events as Summer comes to an end, with over 240 craft beers and ciders to try from 66 breweries and 2 cideries, tons of local food trucks and musicians! 

LIKE, SHARE & POST (for a bonus entry)

My Greater Victoria Real Estate Market Update is now available!

"The Spring market for Greater Victoria real estate may have seemed a little more steady this year, people are getting used to the new tempo of brisk sales. Looking at long term numbers though we are still in a very active market, there is increased consumer demand and low supply. Each month this Spring experienced high sales, although they were lower than last Spring the sales numbers were generally the second highest after 2016, and well above the ten year average. We are seeing inventory slowly increasing, there were 1,916 active listings on the Victoria Real Estate Board MLS® at the end of June, 1% more than May, but 16.3% fewer compared to 2,289 active listings at the end of June 2016. We may be getting closer to 2016 inventory levels, however inventory is still at record lows when you compare with 2015, at the end of June 2015 there were 4,003 active listings on the Victoria Real Estate Board MLS®. We currently have less than half the inventory of two years ago!

The Bank of Canada raised interest rates this week for the first time in 7 years to 0.75%. We will see over the coming weeks how this affects the banks interest rates for mortgages, and if they do adjust them how much of the increase will be passed along to the consumer. CMHC insurance premiums also experienced a small increase in March. 

Victoria has been getting a lot of recognition lately on a Global level. Christie's International Real Estate and their affiliate in Toronto recently named Victoria as the second hottest luxury real estate market in the world behind Toronto. In 2016 we experienced an increase in multi-million dollar transactions and a decrease in the number of days on market. Oak Bay was also voted as the top three best places to live in Canada by Moneysense, and the best in B.C.!"

Summer evenings call for beers, hot dogs and baseball  This month you can win a pair of tickets (Section 10) to the Victoria HarbourCats game on Tuesday, August 1st AND a $50 gift card to Romeo’s for pre or post game drinks and appetizers!

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Victoria Real Estate Market Continues Tempo of Steady Sales Throughout June

July 4, 2017 - "This year may feel a bit steady and less exciting when compared to last year's record-breaking market. People are getting used to this new tempo of brisk sales," says 2017 Victoria Real Estate Board President Ara Balabanian. "However, when we look at the longer term numbers, we're in a very active market. This June we counted over one thousand properties sold, while the ten year average for sales in the month of June is 798. If we remove 2016 sales, this June would have been the record breaker."

A total of 1,008 properties sold in the Victoria Real Estate Board region this June, 14.1 per cent fewer than the 1,174 properties sold in June last year.

There were 1,915 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of June 2017, an increase of one per cent compared to the month of May, but 16.3 per cent fewer than the 2,289 active listings for sale at the end of June 2016.

"The good news for buyers is that inventory is slowly starting to build," adds President Balabanian. "But buyers can still anticipate multiple offer scenarios in certain high demand neighbourhoods where inventory is being bought at a more rapid pace. It's never been a better time to be a seller, with MLS® Home Price Index prices at a record high for the Victoria Core."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in June 2016 was $721,000. The benchmark value for the same home in June 2017 has increased by 15.1 per cent to $829,600.