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Record highs, record lows: 2017 sets new bars for Victoria real-estate

2017 set new real-estate records for Victoria's real-estate market, and more of the same is likely in 2018.  Citified.ca

Record highs, record lows: 2017 sets new bars for Victoria real-estate
CITIFIED.CA STAFF

2017 property sales throughout the Capital Region lost traction to 2016 although prices pushed to record highs, according to data released by the Victoria Real-Estate Board.

Total sales reached 8,944, down 16% from 2016's 10,622 transactions. The value of homes, however, surged to a record-breaking average of $859,871. The median price, too, reached a new record of $752,125. Both figures represent a value uplift of 14% over 2016.

The volume of available inventory on the Multiple Listings Service (MLS), says Victoria Realtor® Marko Juras, was largely seen as the driver behind the price jump and what maintained the ceiling on sales.

"2017 was a year of record-setting prices, but also of record-setting lows," Juras said. "We saw the highest average and median prices but buyers also had to contend with record-low available inventory that hovered around the 1,500 mark and ended in 2017 with 1,384 listings. Now consider that in 2012 nearly 4,000 properties were listed on the MLS."

Juras believes the year ahead is likely to result in more of the same, particularly with the new mortgage stress test regulation that came into effect on January 1st.

"Inventory is likely to remain suppressed in 2018 as home owners realize that they may have even more trouble this year than last selling a home and moving laterally across the market, let alone purchasing a more expensive home. The stress test, which will affect all purchasers who wish to secure a mortgage, will mean buyers will need to secure a larger down payment in order to qualify for a mortgage or seek less costlier real-estate. And in Victoria that may be easier said than done unless prices start to recede."

But MLS data, Juras adds, is only one side of the real-estate sales equation, albeit the biggest.

"Pre-sale condominiums and new-build homes may be bought and sold off-market, so-to-speak, with their availability listed on developers' websites and catalogued on pre-sale real-estate databases such as Citified. So we do have to take into account that homes are actively being bought and sold without padding the MLS data, even though most activity is tracked via MLS. And what we could see in 2018, if inventory remains low, is even more buyers will turn to pre-sale purchase opportunities in new communities and new condominiums. And some buyers, priced out of the single-family-dwelling market, could turn to condominiums or townhomes instead."

Juras says there may have been as many as 1,000 sales of pre-sale and off-market properties throughout the region in 2017. C

 

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