A historic shortage of active real-estate listings has placed downward pressure on southern Vancouver Island’s home sales, according to recent data revealed by the Victoria Real-Estate Board.
As REALTORS® scramble to source purchasing opportunities for long queues of house hunters feeling restricted by market forces, one segment of the industry is working hard to ease demand.
“2016 has been one of the strongest years for the pre-sale housing industry in Victoria,” says Mike Miller, head of Victoria-based construction and development firm, Abstract Developments.
“Although the majority of pre-sale transactions are not included in real-estate sales statistics, I can tell you that this has been a very, very busy time for myself and other Victoria developers as we work to bring as much housing online as possible.”
Miller’s multiple development projects – which include the newly-completed and sold-out London Arbor townhomes on Shelbourne Street and The Emerson condos on Rockland Avenue, and the upcoming mid-rise Black and White condo on upper Fort Street – have been hugely successful at attracting buyers feeling frustrated by the current state of the market and increasingly drawn to a boutique home buying opportunity.
“Due to a shortage of housing supply in our region, we’re seeing more Victorians choosing new-build housing options in lieu of what we’d call traditional re-sales, and what I’m hearing from my buyers who’ve purchased their first pre-sale home, is how they never suspected it could be so rewarding and so straight forward, and that’s before taking into consideration that their homes are modern, efficient and situated in desirable areas,” Miller said.
Unlike re-sales, where buyers assume a home shortly after closing the sale, pre-sales may require a one-to-two year outlook. The rewards for those willing to wait, however, can be profound.
“I think once buyers realize how much control they have over the buying process and how relaxed the experience is compared to house hunting on the re-sale market, they’ll never look at the housing market quite the same way,” Miller says. “And although the wait can be longer, over that time buyers have the opportunity to plan out their furniture purchases, sell an existing home without pressure, and considering what’s been happening with the market, by the time they receive occupancy their unit is likely to have already appreciated in value.”
Throughout the region’s urban core developers have been moving pre-sale inventory in volumes some suspect may be record-breaking.
Unlike listings on the Multiple Listings Service that organizations like the Victoria Real-Estate Board use to draw statistics, pre-sale data remains untracked and activity can only be estimated. And by most estimates, including Miller’s, throughout 2016 the pre-sale market appears to have far outpaced expectations with industry insiders suggesting some 50-to-100 pre-sale properties were purchased every month.
The speed with which pre-sale offerings are snapped up have some developers running out of inventory before construction begins or well ahead of completion, something Miller acknowledges is a likely scenario playing out at his latest project.
“At Black and White I’m down to my final 25% of units. Once they’re gone, I won’t have more homes available until next year,” Miller said, adding that today’s Black and White groundbreaking ceremony at Cook and Fort streets will signal the start of construction and the project’s final release of urban homes.
“As a developer I am well aware of the frustrations so many are dealing with at the moment. With such a strong market I think all developers realize that competition for desirable homes is strong and only so many units are available as pre-sales, but we'll keep working to add as much inventory as we can to Victoria's housing stock.” C
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