Greater Victoria real estate continues cooling trend

The number of Greater Victoria real estate sales dropped in January as the market continued to cool.

For every month in 2018, sales numbers fell below the same month the previous year. The year ended with a 20 per cent decline in the number of sales compared with 2017.

The pattern of lower sales numbers continued in the first month of this year.

January saw 329 properties change hands for a total value of $205.4 million.

In comparison, January 2018 had 431 sales, with a combined value of $304 million; January 2019 was nearly $100 million less.

“Actual sales are slower than we would expect in an average January,” Victoria Real Estate Board president Cheryl Woolley said Friday.

Potential buyers are holding off for a number of reasons. Tougher mortgage lending rules have reduced the size of a loan buyers can qualify for by up to 25 per cent, Woolley said.

“In turn, some consumers are re-evaluating their expectations and looking at condos and townhomes rather than single-family homes; or they are looking at single-family homes further outside the core.”

Woolley figures some buyers are waiting for more properties to come on the market, and that sellers are watching the market to see what conditions are like in spring.

The benchmark price for a single-family house in the capital region was $742,000 in January. That’s down from $751,700 in December, but higher than January 2018 at $726,000.

The benchmark value is the value given to a typical house in a particular area.

In the region’s core, where prices are typically higher, the benchmark price was $847,800 last month. It was also down from December, which was $858,600. January’s benchmark was up by 0.9 per cent from January 2018, when it was $840,l00.

The core consists of Oak Bay, Saanich, Victoria, Esquimalt and View Royal.

Actual sales values vary dramatically between neighbourhoods and housing types. Condominiums starting at about $250,000 are listed in a number of areas within the region, while some luxury single-family homes on large waterfront or view properties are priced above $10 million.

Last month, 28 single-family houses sold in Langford at an average of $672,392, while in Oak Bay, eight houses sold, with the average at $1.137 million.

Langford encourages development and implemented practices allowing for smaller lot sizes and efficient processing of applications at city hall.

“Over the past few years, demand in Greater Victoria has outstripped supply, putting upward pressure on pricing,” Woolley sad. “While many of the new developments proposed for our region are being built for much-needed rental and social housing units, it will provide little relief for buyers who are caught in the pinch between tougher lending rules and higher prices.”

At the end of last month, there were 2,057 properties for sale through the real estate board, up from 1,491 at the end of January 2018.

The picture is similar for the area north of the Malahat, where 209 sales of single-family homes were recorded in January, down from 290 the same month in 2018.

This is due to more stringent mortgage rules, said the Vancouver Island Real Estate Board. “Despite lower demand, however, year-over-year benchmark prices of single-family homes continue to rise board-wide, up around nine per cent from January 2018,” the Island board said in a statement. Price increases ranged from five per cent in Nanaimo to 17 per cent in Port Alberni.

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