The Greater Victoria real estate cooled in January as home sales continued to drop, according to the latest figures released by the Greater Victoria Real Estate Board (VREB). However, condominiums and town homes were a bright spot for buyers and sellers alike.
A total of 329 properties sold in Greater Victoria in January, a 24 per cent decline year-over-year compared to the 431 properties sold in January 2018. January 2019 home sales in Victoria also declined 12 per cent month-over-month from December 2018.
Condominiums were a bright spot for the Victoria market. While sales of condominiums in January were down 6 per cent compared to January 2018, compared to December 2018 sales increased by nearly 8 per cent.
The slowing volume of home sales was part of a trend for Greater Victoria in 2018. For every month in 2018, sales numbers fell below the same month the previous year. The year ended with a 20 per cent decline in the number of sales compared with 2017.
Potential buyers are holding off for a number of reasons, according to VREB. Tougher mortgage lending rules have reduced the size of a loan buyers can qualify for by up to 25 per cent. However, there is still demand for real estate in Victoria.
“The population of young adults, which is a key driver of household formation, increased in the third quarter adding support for house price growth,” said a Canada Mortgage and Housing analyst in a statement at the beginning of February. “However, the support from population growth was mitigated by a slight decline in disposable income and an increase in mortgage rates.”
Condominiums and townhomes in Victoria have increased in popularity due to market conditions, according to some.
“…Some consumers are re-evaluating their expectations and looking at condos and townhomes rather than single family homes,” said VREB in its February update. “As well, many buyers appear to be waiting for new inventory to open up, while sellers are watching the market closely to see what their homes are worth and what the spring market may bring.”
The Multiple Listing Service (MLS) benchmark value for a single family home in the Victoria Core in in January 2019 increased by 0.9 per cent to $847,800 compared to January 2018, lower than December’s value of $858,600.
The benchmark value for a condominium in the Victoria Core area in January 2019 increased by 6 per cent to $499,700 compared to a year earlier, slightly lower than December’s value of $502,400.
“Moving forward, we anticipate continued interest in our region as people gravitate towards our mild climate, beautiful amenities and the lifestyle Greater Victoria offers,” said VREB.
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