2020 turned out to be a year to remember for home sellers and house hunters albeit for reasons most experts had not foreseen.
Record-breaking prices were dolled out for single-family homes throughout the Capital, which according to Victoria Real-Estate Board figures saw the average price paid throughout 2020 land just a hair below the $1 million mark at $992,247, or 13% above 2019’s average.
The results were a far cry from initial forecasts by industry experts, including the Canada Mortgage and Housing Corporation, which issued a market advisory in early 2020 calling for the possibility of a significant valuation decline. Instead, over $6.5 billion in real-estate was traded in the Capital, earning a new all-time high and dispelling fears of the pandemic's impact on local housing demand.
Following a luke-warm spring that was described by pundits as disastrous and as a COVID-19-fuelled harbinger of what’s to come, Victoria’s single-family-dwelling re-sales on the Multiple Listings Service shot straight to a $1 million monthly average in June, a figure repeated four more times with the most feverish among them – November – yielding an average price paid of $1.09 million. In total, 4,244 houses sold throughout the year representing a 28% increase over the year before but not still short of 1991’s monumental 5,496 sales.
“Broadly speaking, extremely low interest rates ignited the single-family-dwelling market, lobbing sales to record highs, pushing inventory to record lows, and creating a scenario where demand far, far outpaced available supply,” said Marko Juras, a Victoria-based REALTOR. "This was also reflected in how the region's 2021 assessments were calculated by BC Assessment
, which placed more value upside on suburban areas like Sooke and Metchosin where single-family-homes are prevalent."
On the condominium side of the equation, enthusiasm wasn't quite as high as year's prior with homebuyers focusing on square footage in lieu of value and location, two metrics that give high density dwellings an edge in normal times.
That being said, the year’s 2,403 condominium sales surpassed transactions in 2018 and 2019, and the year-end average landed at a record-breaking $484,434, nearly 4% above prices paid in 2019.
“Supply could not keep up with demand for houses, but the story was different for condominiums,” Juras says. “Supply remained high, and less desirable inventory languished as buyers weighed strata fees and insurance rates against reaching further and qualifying for a house as interest rates declined. That kept the supply side heavy, but the year certainly ended on a strong note with a record-high average price, healthy interest in suburban high density offerings, and the third-highest number of annual sales on record.”
Considering a COVID-19 vaccine is rolling out across the country and new normals comprised of social distancing and hygiene standards are now in effect, demand for condominiums could stabilize in 2021. With single-family-home prices now firmly out of reach of most first-time buyers, condominiums are viewed as a logical market entry point for a significantly larger group of consumers.
As the middle ground between houses and condominiums, it comes as no surprise that townhomes surged in popularity throughout the year given their larger footprints than condominiums and more affordable price points than houses.
1,051 sales were recorded by the Real-Estate Board, surpassing 2016’s then record of 1,017. Compared to 2019, sales surged 28% right in line with single-family dwellings, and saw an average price of $614,332. The year prior averaged $600,238.
The year ahead
On the precipice to 2021, Juras says he’s optimistic about some aspects of the industry and cautious about others.
"Single-family-homes and townhomes are positioned to maintain upwards price pressure at least until mid-2021, but the verdict is out on how the condominium market fares as we continue on with ultra-low interest rates and a desire among buyers for larger homes and suburban neighbourhoods. Come February or March we’ll have a good sense of how things are shaping up for the year." C
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Sooke, West Shore lead rise in 2021 real-estate value assessments as Victoria's core yields tempered uplift