Canadian buyers are “staying away” from Victoria because of speculation tax and other market interventions, according to a local broker.
Jay Rockwell, managing broker, Royal LePage Coast Capital Realty, was responding to the latest board statistics and the results of the Royal LePage House Price Survey, a report compiled from a national survey of Royal LePage agents, which was released July 10.
With real estate sales down in Victoria, the new survey found that the pace of appreciation in home prices is slowing. The aggregate price of a home in the capital region increased 5.3 per cent year-over-year to $659,685 in 2018’s second quarter. (The aggregate price is a weighted average of the median sale prices of each type of homes.)
Broken out by housing type, the median price of a two-storey home increased by 0.6 per cent year-over-year to $863,206, while the median price of a bungalow and condo rose by 8.2 per cent and 8.0 per cent year-over-year to $730,872 and $488,513, respectively.
Rockwell said, “Canadians who purchase in Victoria for their university-aged kids, or those that pre-purchase for their future retirement, are mostly staying away until they see the effects of the speculation tax. The new tax coupled with the new rules in the Residential Tenancy Act will make it near impossible for these people to come away unscathed.”
Rockwell added that “diminished purchasing power brought on by the new mortgage rules has resulted in a decrease in sales volumes in the single family dwelling market while multifamily sales volumes has likely benefitted from the changes,” according to the Royal LePage report.
Royal LePage’s report said that home prices in Victoria are expected to keep rising slightly but at a slower rate, and only if inventory continues to increase.
Across the country, home sales in 2018's second quarter slowed, led by steep annual declines in the Greater Toronto market and fewer home sales in Greater Vancouver.
"It was a spring market that never blossomed," said Phil Soper, president and CEO, Royal LePage.
However, Soper was optimistic about the prospects for sales and values over the next couple of quarters.
“The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018,” he said. “The fundamentals have not changed. The economy is strong and unemployment is very low. We face shortages in our major cities, with many more people looking for homes than the market has available for purchase or rent. Upward pressure on prices will likely return to most markets this quarter.”
