The real estate markets in Victoria and Vancouver appear to be bucking a national trend. Both have reported significant drops in average selling price through the first quarter of the year while the rest of the country is experiencing gains, according to a new Royal LePage survey.
The average selling price across common types of housing were higher year-over-year in most Canadian markets, with gains for houses at 2.4 per cent and condominiums up 1.2 per cent. But the same could not be said for the two largest B.C. markets.
In Victoria, the average price of a standard detached home dropped 1.5 per cent to $452,115 over the first three months of this year. The price of a bungalow dropped 3.8 per cent to $452,140 and condos fell 7.0 per cent to $267,000.
In Vancouver, which is still the most expensive housing market in the country, the average selling price of detached houses dropped 5.6 per cent to $1.116 million, bungalows fell 5.1 per cent to $1,013,750 and the average condo price slipped 5.6 per cent to $481,250.
B.C.’s decreases across all housing types is down to an overall reduction in activity from both buyers and sellers, which continues to drive prices down, Royal LePage said.
The trend outlined by Royal LePage mirrored statistics released earlier this week by the Victoria Real Estate Board. The board’s data revealed, while sales picked up in March, they still lag behind last year’s pace and the average price per sold unit last month was $455,180, down from $474,656 in 2012.
Victoria Real Estate Board president Shelley Mann was loath to compare the first quarters of this year and last, noting the change in lending rules that came into effect in the middle of 2012 skewed results.
“The first six months of 2012 were reasonably strong, and then mortgage amortization rules changed in July. The revised lending rules affected buyers’ abilities to qualify for mortgages and we are still feeling those effects on the market,” she said.
Royal LePage president Phil Soper said the Canadian housing industry is in an unusual situation.
“The combination of low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we’ve seen before,” he said. “Typically, one of these variables is moving hard in an opposite direction.”
Soper acknowledged that there have been warnings of impending market upset and dramatic price decreases, but said there’s no evidence of that other than on the west coast.
“The current environment is very supportive for housing,” Soper added.
However, he admitted timing house prices to trends in a given neighbourhood is difficult.
“It is important to remember that Canada is a collection of regional markets. Case in point, we see renewed strength in the Alberta and Saskatchewan markets in early 2013, based on the health of the energy sector … In Vancouver, affordability concerns dampened demand significantly,” he said.
