Fewer listings translated into a slow month of home sales in October, according to figures released Wednesday by the Victoria Real Estate Board.
There were 664 properties sold last month, a drop of nearly 10 per cent compared with the same time last year.
At the same time, there were 1,905 active listings for sale at the end of October, a 3.6 per cent drop compared to September and 1.7 per cent fewer than the 1,938 active listings for sale at the end of October 2016.
“As expected, we saw fewer sales than this time last year. Looking at the longer-term picture, however, sales last month were 17.1 per cent above the 10-year average of 567 properties for the month of October,” said board president Ara Balabanian. “So the market is still very active here in Victoria, and this is in spite of the ongoing low inventory levels.”
The benchmark value for a single-family home in the Victoria core last month was $821,900, a 9.3 per cent increase over the $752,000 benchmark value in October 2016.
“The fact that we’ve seen such a controlled levelling off in the market directly following a year which felt so uncontrollable in terms of demand and pressure on prices illustrates the depth and stability of the Victoria market,” said Balabanian. “An unstable market may have experienced a heavy correction or shift, whereas in our market sales are moderating at a reasonable rate.”
Historically speaking, the region’s pricing is unprecedented.
According to a survey conducted by Century 21, the price per square foot of a typical single-family home has increased 238 per cent over the past 10 years to more than $424.
The study gathered the price-per-square-foot for a typical home across the major towns and cities in Canada in 1997, 2006 and 2017.
According to Century 21, Victoria’s 10-year increases — 182 per cent for condos to $435 per square foot and 173 per cent to $354 per square foot for townhomes — was considered healthy.
“It has really changed. It gives you a snapshot of where you are living and Victoria, Vancouver and Toronto have seen some big increases,” said Chris Markham managing broker at Century 21 Queenswood.
The biggest increase was seen on the west side of Vancouver where the typical price per square foot — building and land — increased 400 per cent to $1,210.
Markham said the price point in Greater Victoria is a growing problem that is pushing young people out of the equation. He said the large number of condos that are under construction might help in terms of added supply and improving the 0.5 per cent rental vacancy rate, but might not do much in terms of price.
Markham cited increased building costs and scarcity of skilled trades as factors driving up cost.
He also noted foreign investment in homes and businesses has been great for spurring on growth, but it’s made getting into the housing market that much more difficult.
“[Foreign investment] goes to Vancouver, Vancouver comes to Victoria and we spin it up Island,” he said.
Foreign investment in the capital region remains fairly low, with just 4.3 per cent of all property transfers in the last six months involving foreign nationals.
Markham said the current market conditions are unprecedented, and it’s anyone’s guess when it will slow down. “I do think we are seeing more balance,” he said, noting the market is not building up its inventory but rather matching new listings with sales each month.
But he doesn’t think the market has seen the end of high prices and demand. “If you and I had talked a year ago, I’d have said be in cash and out of the market by the end of this year. But now what I’m seeing is there’s so much momentum that even if they jacked up interest rates and even if a bomb dropped there’s so much momentum I don’t see it dying. There’s too much already committed,” Marjham said, adding the unemployment rate remains low, interest rates are relatively low and in-migration continues.
The VREB said a balanced market will continue over the next few months as low inventory levels will match the traditional slowdown in buyer and seller behaviour..