Victoria real estate: Fewer listings, fewer sales in October | Times Colonist

Fewer listings translated into a slow month of home sales in October, according to figures released Wednesday by the Victoria Real Estate Board.

There were 664 properties sold last month, a drop of nearly 10 per cent compared with the same time last year.

At the same time, there were 1,905 active listings for sale at the end of October, a 3.6 per cent drop compared to September and 1.7 per cent fewer than the 1,938 active listings for sale at the end of October 2016.

“As expected, we saw fewer sales than this time last year. Looking at the longer-term picture, however, sales last month were 17.1 per cent above the 10-year average of 567 properties for the month of October,” said board president Ara Balabanian. “So the market is still very active here in Victoria, and this is in spite of the ongoing low inventory levels.”

The benchmark value for a single-family home in the Victoria core last month was $821,900, a 9.3 per cent increase over the $752,000 benchmark value in October 2016.

“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,” said Balabanian. “An unstable market may have experienced a heavy correction or shift, whereas in our market sales are moderating at a reasonable rate.”

Historically speaking, the region’s pricing is unprecedented.

According to a survey conducted by Century 21, the price per square foot of a typical single-family home has increased 238 per cent over the past 10 years to more than $424.

The study gathered the price-per-square-foot for a typical home across the major towns and cities in Canada in 1997, 2006 and 2017.

According to Century 21, Victoria’s 10-year increases — 182 per cent for condos to $435 per square foot and 173 per cent to $354 per square foot for townhomes — was considered healthy.

“It has really changed. It gives you a snapshot of where you are living and Victoria, Vancouver and Toronto have seen some big increases,” said Chris Markham managing broker at Century 21 Queenswood.

The biggest increase was seen on the west side of Vancouver where the typical price per square foot — building and land — increased 400 per cent to $1,210.

Markham said the price point in Greater Victoria is a growing problem that is pushing young people out of the equation. He said the large number of condos that are under construction might help in terms of added supply and improving the 0.5 per cent rental vacancy rate, but might not do much in terms of price.

Markham cited increased building costs and scarcity of skilled trades as factors driving up cost.

He also noted foreign investment in homes and businesses has been great for spurring on growth, but it’s made getting into the housing market that much more difficult.

“[Foreign investment] goes to Vancouver, Vancouver comes to Victoria and we spin it up Island,” he said.

Foreign investment in the capital region remains fairly low, with just 4.3 per cent of all property transfers in the last six months involving foreign nationals.

Markham said the current market conditions are unprecedented, and it’s anyone’s guess when it will slow down. “I do think we are seeing more balance,” he said, noting the market is not building up its inventory but rather matching new listings with sales each month.

But he doesn’t think the market has seen the end of high prices and demand. “If you and I had talked a year ago, I’d have said be in cash and out of the market by the end of this year. But now what I’m seeing is there’s so much momentum that even if they jacked up interest rates and even if a bomb dropped there’s so much momentum I don’t see it dying. There’s too much already committed,” Marjham said, adding the unemployment rate remains low, interest rates are relatively low and in-migration continues.

The VREB said a balanced market will continue over the next few months as low inventory levels will match the traditional slowdown in buyer and seller behaviour.

The article was originally posted on Times Colonist, November 1, 2017. Written by Andrew A. Duffy.

Active Victoria Real Estate Listings Slide Below 2,000 Mark | Times Colonist

  • vka-sold-1681-jpg
    The median sale price of a single-family home in the capital region was $759,000 last month, a 14.3 per cent increase from the $664,000 recorded in July last year. Photograph By BRUCE STOTESBURY, Times Colonist
  • 0802-realestate-jpg
    Strong sellers' market continues in Victoria Photograph By Times Colonist

With less than 2,000 active listings, Victoria’s real estate market remains firmly weighted in favour of the seller, according to data released Tuesday by the Victoria Real Estate Board.

There were 1,921 active listings at the end of last month, a drop from the 2,161 on the market in July 2016, which led to sellers getting excellent prices for their homes.

The median sale price of a single-family home in the region was $759,000 last month, a 14.3 per cent increase from the $664,000 recorded in July last year.

[Read more…]

Capital region homeowners consider locking in after interest-rate hike | Times Colonist


Josh Ray is accompanied by his dog, Harley, outside his home in Saanich’s Glanford area on Wednesday. Photograph By DARREN STONE, Times Colonist

First-time homebuyers and owners about to renew their mortgages are nervous about the first benchmark interest-rate hike, a Victoria mortgage broker said Wednesday.

The increase, the first in nearly seven years, might prompt some people to lock in their mortgage rates, Colleen Flynn of Select Mortgage Group said. “It’s a concern for people. They are saying: ‘What’s this going to mean for me?’ ” she said. “I think more people are locking in to be cautious.”

Flynn said she’s also getting calls from homeowners who want to renew their mortgages early.

The Bank of Canada raised its key interest-rate target to 0.75 per cent from 0.5 per cent on Wednesday, prompting the five big banks to raise their prime rates a quarter of a percentage point. At the Royal Bank of Canada, that puts the prime rate at 2.95 per cent, up from 2.7 per cent.

Economists expect a gradual cycle of rate hikes amid rising confidence in the economy and projected growth.

Someone with a $540,000 mortgage over 25 years at an interest rate of 2.95 per cent would have monthly payments of $2,541, up from $2,473 at the lower rate. That $68 a month might not sound like a lot, Flynn said, but it takes earnings of $200 more a month to qualify for a mortgage at the higher rate.

“It’s going to affect their borrowing power,” she said.

Also, a greater share of the monthly payments will go toward interest, so the homeowner will pay $2,300 less toward their principal over five years, Flynn said.

Josh Ray and Nancy Schmidt, who are in their mid-30s, bought their first home in Saanich’s Glanford area on June 30.

Ray, a real estate agent and property manager, said the couple initially went with a variable rate of 2.3 per cent but switched to a fixed rate of 2.54 per cent once news broke of the rate hike.

The increased cost amounts to less than $100 a month and is manageable for them, since the home also has a rental suite.

“That’s still an amazing rate — it’s a no-brainer to lock into that,” Ray said. “They’re talking about raising [interest rates] two or three times this year.”

Ara Balabanian, president of the Greater Victoria Real Estate Board, said the interest-rate hike could push would-be buyers into the market in an attempt to beat another rate increase.

“I think the effects might be more psychological than real financial,” said Balabanian, a Managing Broker with Macdonald Realty Victoria. “There’s a lot of people who have been sitting on the sidelines watching [the market] and they might think, the rates are beginning to move up, maybe this is the time to go forward and buy something and lock it in. This low interest-rate environment will not continue forever.”

The interest rate is only one factor influencing the real estate market, and Balabanian said he doesn’t anticipate a major change in Greater Victoria house prices.

Mortgage broker Maria Dominelli said most first-time homebuyers have fixed mortgage rates, so the rate hike will not immediately affect them.

Variable rates tend to be lower but riskier, since the rates could rise. Borrowers seeking a variable-rate mortgage would have to qualify at the Bank of Canada benchmark of 4.64 per cent, “so there’s already that cushion built in for those borrowers to handle the ups and downs and ride the wave,” Dominelli said.

She said a period of consistent rate hikes could make it harder for people to get into the market.

“Let’s put it this way: It’s not going to make their bottom line any easier,” she said. “A higher rate will mean they have to take on a slightly higher debt load.”

The “bigger bombshell,” Dominelli said, would be the new stress test for uninsured mortgages being proposed by Canada’s banking regulator.

The new rules would mean homebuyers with a down payment of 20 per cent or more will have to show they can handle their monthly payments if interest rates rise.

Currently, only homebuyers with less than 20 per cent down — who must be insured by Canada Mortgage and Housing Corporation — are required to face the test.

“When these new rules come in, it’s going to be a rude awakening,” she said.


The article was originally posted on Times Colonist, July 13, 2017. Written by Katie Derosa.