The number of home sales in the capital region slid by 25 per cent and the total value of home sales dropped by 27 per cent in October, compared with the same month a year ago.
The changes are less dramatic when the first 10 months of this year are compared with the same period last year, however. Sales numbers are down by 2.5 per cent and total values dropped by 5.4 per cent.
Local, provincial and national real estate organizations all point to tighter federal mortgage rules that arrived in July as a factor in fewer home sales.
Federal measures to slow real estate sales nationally are having a local effect, Victoria board president Carol Crabb said Thursday.
Mortgage rules for government-insured mortgages were tightened, with the maximum amortization reduced to 25 years from 30. Many buyers are having trouble getting financing for the type of home that fits their needs, particularly first-time buyers, said Crabb, who also pointed to differences within the region.
Victoria, Saanich, Esquimalt and Oak Bay have seen flat sales and prices, while sales are down on the Saanich Peninsula, and sales and prices are lower on the West Shore.
This years sales numbers in the capital region peaked in May at 636 and have declined every month since. October ended with 344 residential sales through the Victoria Real Estate Board, down from 461 in October 2011. The total dollar value of those sales dropped to $159.7 million last month, compared to $219.3 million in October 2011.
The average sale price of a single-family house in Greater Victoria was $592,097 last month, down from $595,836 in October 2011.
Scott Travelbea of Travelbea and Associates with Dominion Lending Centres said federal rules have affected the high end of the market more than in the past, because buyers need 20 per cent or more as a down payment.
Shorter amortization means higher monthly payments, he said. People are adjusting their expectations of what they can pay on a monthly basis.
Travelbea believes shaky consumer confidence is also key in lower sales numbers.
Bruce Carter, chief executive officer of the Greater Victoria Chamber of Commerce, is not surprised by lower sales, given the state of the global economy and significant downward pressure on real estate in Vancouver. I would expect that wed be affected by that, said Carter, adding he takes solace from the fact that both volumes and prices are down. It would be a lot different if volumes were staying high and prices were down.
The first 10 months of this year saw almost 4,860 home sales with a total value of $2.3 billion. Those same months in 2011 saw nearly 4,990 home sales, for a total value nearing $2.5 billion.
B.C. Real Estate Association chief economist Cameron Muir is optimistic that a growing population, strong full-time job growth and continuing low interest rates will boost sales in coming months.