Flat year on horizon for Greater Victoria real estate

After a flat sales year in 2019, the Greater Victoria Real Estate Board is expecting another without shocks, surprises, slumps or super-charged growth.

“I suspect it will be more of the same,” said incoming Victoria Real Estate Board president David Langlois. “There are no shocks we can see with respect to interest rates or any large world events, though obviously we can’t predict those things, but in terms of the cycle, we are right on track.

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“We typically go through a period of frenetic activity and price raises, then a relatively long, flat period when not a lot happens.”

According to several real estate veterans, the frenetic periods of activity and price increases tend to last two or three years, while the plateau periods can last seven or eight years.

That’s where 2020 finds itself — in the midst of what many believe could be another long, flat period. According to market figures released by the board Thursday, the region is coming off a year that boasted 7,255 sold properties, a 1.47 per cent increase from the 7,150 sold in 2018. The 10-year average for property sales is 7,413.

By comparison, the busy year of 2016 saw 10,622 sales, and another 8,944 in 2017 before things started to slow down again in 2018.

Langlois said the board saw its benchmark home-price index peak in the summer of 2018 to about $900,000, since then it has moderated a little, “but not much.”

“[2020] will be an uneventful, unexciting, normal year from what we can tell,” he said, adding last year there were few appreciable gains other than condo prices in the core areas and the single-family homes at the lower end of the market.

Langlois said he expects to see the higher end of the market continue to be soft, with the bulk of activity reserved for the lower end and entry level, a result of the federal government’s mortgage stress-test rules.

In all, he expects it will be a relatively balanced market.

“The market is steady,” Langlois said. That was the case as 2019 came to a close.

Last month, the board reported 402 properties sold with sales of condominiums up 17.5 per cent to 121 sold, compared with December 2018. Single-family home sales increased 13.8 per cent to 198 at the same time.

The benchmark price of a single-family home in the Victoria core in December was $855,000, down from $860,400 a year earlier. The benchmark price for a condo last month was $520,700, up from $503,000 a year ago.

Outgoing president Cheryl Woolley said 2019 was “active, slow to grow and low in supply.”

“Last year, we saw many prospective buyers sit on the sidelines waiting for inventory to be added. As a result of this unmet demand, there was and continues to be a push from consumers to create townhomes and condos at accessible price points,” she said.

In a year-end statement, Woolley reflected they had started the year by looking at measures taken by the federal and provincial governments to cool off a housing market that had already started to slow down after 2016-17.

She said tighter mortgage lending rules lowered consumer borrowing power and pushed more buyers into the mid- and lower-priced property market. The result was pressure on pricing.

“Although we did not see huge price increases though 2019 like we did in the run up through 2016, we do see buyers entering into multiple offer situations and competing for properties,” she said.

The real estate market on the rest of Vancouver Island slowed down in 2019, as the Vancouver Island Real Estate Board reported total sales of single-family homes fell nine per cent to 4,119.

The average selling price, however, did jump five per cent to $535,577 last year, up from $511,839.

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