New figures from Victoria Real Estate Board show sales took another hit in June.
Sales in June 2018 dropped almost 30 per cent compared to the same period last year as 708 properties changed hands. Compared to May 2018, sales dropped 6.2 per cent.
Kyle Kerr, VREB’s president, said June typically signals the conclusion of the busy spring market, as activity lightens into the summer. “However, because of decelerating growth due to aggressive government implementation of policies to reduce demand, Victoria’s real estate market has been hobbled since the start of the year when federal restrictions around mortgage qualifications were rolled out.”
In fact, Kerr thinks some these numbers reflect measures that have not even come into effect yet. Measures such as the pending speculation tax have already deterred buyers, with consumers waiting on the sidelines to see what happens.
“The dramatic dropoff in single family sales since April is quite astonishing especially compared to last year where sales increased in that period,” he said. “Single family sales are down 45 [per cent] compared to a year ago and a quarter below the 10 year average. July is usually where we see a steep drop in sales so it will be interesting to see if things really grind to a halt this month.”
As sales have slowed down, inventories have risen. At the end of June 2018, records showed 2,595 listings, an increase of 8.4 per cent compared to the month of May and 35.5 per cent more than the 1,915 active listings for sale at the end of June 2017.
“The good news is that inventory is slowly being added to the market, though we are still very far off from our ten year average inventory level of 4,100 listings,” said Kerr.
Prices, however, continue to go up — at least for now. Home Price Index (HPI) benchmark value for a single family home in the Victoria Core in June 2017 was $829,600, while the benchmark value for the same home in June 2018 increased by 7.2 per cent to $889,600, higher than May’s value of $878,100, according to VREB.
Spalteholz’s analysis however shows that median prices for single family detached homes, as well as condos across the region are heading downward.
“It seems clear that prices are at best flat and potentially starting to see some declines on the detached side which isn’t overly surprising given the weakness in sales in the last two months,” he said. “What is surprising to me is that condo prices have been flat as well all year even though sales have not dropped as much and inventory is still extremely tight. It seems that either condo buyers are cautious about what they’re buying and focusing more on the lower end, or the stress test has forced them there.”
Looking at figures for Saanich, they show sales in Saanich totaled about $82.8 million for single residential homes. Condominium sales totaled about $18.9 million. Townhouse sales totaled 12.81 million.