Greater Victoria's residential real estate prices are falling, according to a Royal LePage survey on Wenesday.
All housing types saw decreases in the region, with detached bungalows falling the most by an average of 6.3 per cent to $450,000 compared to the same time last year. Standard two-storey homes dropped in price by 2.2 per cent to $455,000, while standard condominiums dipped by just 0.7 per cent year-over-year to $275,000.
"Total year-over-year inventory levels have slightly increased. providing a good amount of selection to meet the needs of any buyer," said Carol Geurts of Royal LePage Coast Capital Realty. "Overall, we're seeing ongoing stability in the market, which favours buyers."
While the average price of a home in Canada crept higher in the third quarter, Royal LePage warned a softening in prices may be just around the corner.
The real estate firm said the average price of a home in Canada rose between 1.8 and 4.8 per cent in the third quarter, depending on the category, but the number of homes sold was slipping.
Fewer homes trading hands, the company said, typically precedes a period of softening prices as sellers adjust their expectations and cut prices.
"During the third quarter, unit home sales were positive in July, fell nine per cent year-over-year in August and we are expecting September to show a decline as well," Royal LePage chief executive Phil Soper said.
"We had predicted this cyclical change early in the year, a natural market reaction after a period of strong expansion. Changes to mortgage regulations, which took effect on July 9, accelerated the correction."
Among the changes to tighten the lending rules, Ottawa cut the maximum amortization period for government insured mortgages to 25 years from 30 years, making monthly payments more expensive, but reducing the amount of interest paid in the long term.
The government also moved to place debt-to-income restrictions and ended government mortgage insurance for homes worth more than $1 million.
It was Ottawa's fourth intervention in the mortgage market in just four years.
David Madani of Capital Economics has predicted house prices will decline by 25 per cent over the next year or two as the housing bubble in Canada bursts.