Dwindling inventory handcuffs home sales in capital region

Real estate sales in Greater Victoria would still be soaring if there was something to sell.

That was the word from the president of the Victoria Real Estate Board Tuesday after releasing sales figures from October.

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Mike Nugent said a lack of inventory led to 735 sales last month, a drop from the 781 sold in September and just one sale more than the 734 sold in October last year.

“The [real estate agents] on the street are saying if we had more inventory we would have more sales,” said Nugent. “We have a lot of frustrated buyers.”

Nugent said the sales figures from last month are about the same as a year ago because last October is when the market started to take off.

“Overall it’s a mixed story. Demand remains very strong, but our listings are low,” he said.

Nugent said a buoyant local economy, solid employment and Victoria’s appeal as a retirement destination are all factors fueling the demand.

But he noted the supply side takes a while to react, and there are restrictions on developers, such as the Agricultural Land Reserve on the Peninsula and a lack of land in the core.

“There is land available on the West Shore and developers have been trying to open new subdivisions, but a lot of that has already been sold,” he said. “This [hot market] has happened so quickly that it’s hard for them to keep up.”

As for the cranes peppering the skyline downtown where they are building condos, Nugent said it’s a start.

“But we’re talking hundreds of units when we need thousands,” he said. There were 1,938 active listings on the Multiple Listing Service at the end of October, well below the 3,170 listings at the same time last year.

Casey Edge, executive director of the Victoria Residential Builders’ Association, said the lack of new housing supply is down to an old question — can developers get land on which to build?

Edge said the Capital Regional District’s regional growth strategy continues with a policy of restricting land use.

“The way it stands right now if the region is serious about housing affordability they have to have a hard look at land-use policies,” Edge said. That can mean looking at zoning for duplexes and four-plexes in areas that have traditionally been single-family only, and scrapping tools such as Saanich’s Environmental Development Permit Area bylaw. The bylaw, designed to protect sensitive ecosystems, created an extra level of restriction within the urban containment boundary.

Nugent said with little relief in sight on the supply side and strong demand expected to continue, the market is likely to remain strong for sellers.

“Though our numbers are down from the record setting pace set this summer, the market is still moving quickly and is still very competitive for certain properties,” he said. “High demand areas like Saanich and Oak Bay continue to see multiple offers and areas in the West Shore are also seeing sales over listed prices.

“In other areas, prices remain firm because of high demand and extremely limited inventory.”


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