Golden trowel in hand, Victoria Mayor Dean Fortin put the ceremonial finishing touch on a concrete wall at one of the city’s latest high-density developments.
Fourteen storeys up, he smoothed wet concrete atop The 834 on Johnson Street, saying, “This is the type of project we need to see more of.”
At 115 units, The 834 is just one in a series of developments popping up in the region at a time when the numbers show a cooling housing market.
“It’s only been a few months that demand has been slow,” said Travis Archibald, senior market analyst for Vancouver Island with the Canadian Mortgage and Housing Corp.
According to Victoria Real Estate Board statistics, property sales in the region were stagnant, if not slowing, as summer neared. There were 339 sales through the Multiple Listings Service in January. The total rose into the 600s in February and March, then slipped to 574 in April and 572 in May.
Archibald expected sales of new construction units to pick up, especially those offering smaller units at lower prices. Buyers in Greater Victoria are usually locals who are relocating; meanwhile, migration will help support the number of new builds, he said.
“Builders and developers are building to cater to demand at a local level. You have to cater to the demographics that we’re seeing. That was one of the problems for a couple of years – we had a lot of buildup for the higher (end) stuff.”
Some developments have sold well; others slowly. Dockside Green is 97 per cent sold, but has had no new construction since 2009. The Ovation on Esquimalt Road has 28 of 78 units available and the Hudson, in the former Bay building on Douglas Street, has 46 of 152 units vacant.
By CMHC’s own numbers, buyers aren’t necessarily keeping pace with the number of newly built units in the region. The 10-year average for the number of unoccupied new units is about 213, but in March, there were 443 unoccupied.
“That’s not a cause of major concern,” Archibald said, adding net migration to the region is expected to be 5,300 in 2011. “(Migration is) the fundamental link to what we’re going to need in the region in terms of homes so for that we’re looking at long-term demographic demand.”
While The 834 is 90 per cent sold, developer Dave Chard said the supply-demand balance is on his mind, and the minds of other developers.
“Yes, we are looking at saturation,” he said. “The construction industry is going to look more at where they’re locating and where is their project quality.”
By the numbers
In May, average and median house prices were down across the board, except for single-family houses, which increased from $615,533 (average price) in April to $628,462 last month. Helping that boost were 26 sales of over $1 million, including four over $2 million. The inventory of properties on MLS is seven per cent higher than a year ago, with 4,857 properties available at the end of May.
Source: Victoria Real Estate Board