Real Estate 2018 Forecast
2017 has been another interesting year in the Victoria Real Estate
Market! By year end the number of Residential Sales will be
about 15% down compared to 2016. But thanks to our record
low inventory the MLS Home Price Index will be around 15% higher
than one year ago.
November and December have seen higher than expected levels of
sales thanks to the new mortgage rules that will take effect
January 1, 2018. These rules will create a "stress test" that
means borrowers will have to qualify at a higher rate than they
will be able to get from lending institutions. Canada's
bank regulators feel this will give Buyers a cushion in case
rates increase by the time they have to renew their mortgages.
It will also mean that most buyers will lose about 20% of their
buying power! This has forced many buyers to accelerate their
home purchase which is the reason we are seeing record sales
levels in November and December. How will this affect the
Canadian Real Estate Market and will it have the same effect on
our Victoria market?
While the "stress test" will mean less buyers at the beginning
of the year I do not feel it will affect our overall prices.
There will be less buyers the first few months but with
historically low inventory levels plus seasonal low levels I
don't foresee any drastic changes in our prices. The Canadian
Real Estate market is more likely to see price adjustments but
as I often point out, Victoria is a limited market and the most
desirable place in Canada to live. More people would like to
live here than we can accommodate. I think 2018 will see a
decrease in the number of sales but after a slow start we should
see about a 10% rise in prices by the end of 2018.
Whether you buy
or sell in 2018 the market can be good for you. With good
advice from a Real Estate Professional you can get top value for
your home. It may take a little work but homes that show
well sell well. With fewer buyers around next year it should be
a little easier to find the perfect or near perfect home in
2018. Market knowledge and an eye on the market along with
professional advice and service are a great asset in the buying
process. With my advice and guidance we can make 2018 a win-win
market. Feel free to call or email with any Real Estate
Questions. 250-588-6169 or
My 2018 Calendar
I hope you enjoy my 2017 Calendar. 2018 is finished and
hopefully you have one by now. We had great sunny weather
in Spain in January. We did a week of leisure bicycling (www.andaluciancyclingexperience.com)with
the usual tourist stops (Barcelona, Granada, etc.) on before and
after. The weather was great, the food & wine good and it was a
relatively inexpensive holiday. Our fall trip to the UK included
an 8 day self-guided walk from Oxford to Bath and then a week at
Lavenham in Suffolk. The walk was one of the best holidays I can
I enjoyed making this year’s calendar as if lets me re-live the
trips. If you did not get a 2018 year and would like one of
these hand make calendars of my travel photos please call or
I'm not sure if anyone looked at the additional photos I post
but I enjoyed doing it and re-living the experiences one more
time! “Every Picture Tells a Story” is my way of sharing
more than just the calendar photos from my travels. Maybe the
photos will inspire you to visit one of the areas. Simply
http://myvictoria.ca/2018/ and share my travels.
Have a great New Year,
Vacancy Rates flat but Rents Up
Victoria rental market published. The vacancy rate is
virtually unchanged but the average rental price is up 7.7%.
The inner areas of the city show below average vacancy rates and
higher rental prices. The shift away from home ownership has
placed strong demand on the rental supply. Rents have increased
as a result of strong demand without a proportional increase in
Sales to Active Listing Ratio to end of February 2018 - The
Sellers' market remains strong with the continued trend of low
inventory and high demand. For the foreseeable future we should
stay in the 40% to 50% range. So far the new mortgage
qualifications with come into effect January 1, 2018 do not seem
to have slowed the Victoria Real Estate Market with it's
historic low inventory.
This chart tracks the ratio
of total residential sales over total active residential
listings at month-end for each of the last 25 months.
The active listing count
and the sales count can be viewed as indicators of housing
supply and demand respectively. Observing the ratio between them
can thus help indicate a "buyers' market", where there is
downward pressure on prices, and a "sellers' market", where
there is upward pressure on prices.
- below 10%, there is
downward pressure on prices (buyers' market)
- above 25%, there is
upward pressure on prices (sellers' market)
- in the 15-20% range,
there is little pressure on prices either way (balanced market)
Please call with any real
Victoria Real Estate Board
Victoria Real Estate Market
Adapts to Changing Policy Landscape
March 1, 2018 Victoria BC
-A total of 545 properties sold in the Victoria Real Estate Board
region this February, 19.3 per cent fewer than the 675 properties
sold in February last year. The sales of condominiums were down 15.5
per cent from last year in February with 174 units sold. Single
family homes were 24.4 per cent down from the year previous, with
260 sold this February.
"We certainly anticipated that we would see some lower numbers this
year compared to last," says Victoria Real Estate Board President.
"Right now prospective home buyers are met with many hurdles as they
start shopping for their new home. They're in a market that's
experienced long-term low inventory, which means more price pressure
and competition on homes. Buyers are navigating increasing interest
rates and the new mortgage stress test. These factors all combine to
constrain our market. Like any changes to consumer experience, there
is a period of response before consumers adapt to the new rules. We
saw an increase in buyers in November and December who bought early
to avoid the mortgage stress test, and this likely means less buyers
in the current market. However, with continued historical low
inventory levels, demand is still outpacing supply."
There were a total of 1,545 active listings for sale on the Victoria
Real Estate Board Multiple Listing Service® at the end of February
2018, an increase of 3.6 per cent compared to the month of January
and 0.5 per cent more than the 1,537 active listings for sale at the
end of February 2017.
"The provincial government recently rolled out its budget, which
includes an admirable commitment to spend six billion dollars to
build 114,000 units in ten years," adds the President. "These units
will take years to come to market, and it is difficult to predict
how many we will see in Victoria. The government needs a long-term
approach to supply needs in our area, and that initial commitment is
a good start. A reasonable way to bolster their commitment and
improve current conditions is for the province to work with our
municipalities to reduce the timelines and costs associated with
bringing new housing to our market."
The Multiple Listing Service® Home Price Index benchmark value for a
single family home in the Victoria Core in February 2017 was
$771,100, while the benchmark value for the same home in February
2018 increased by 9 per cent to $840,300, slightly higher than
January's value of $831,900. The MLS® HPI benchmark value for a
condominium in the Victoria Core area in February 2017 was $394,400,
while the benchmark value for the same condominium in February 2018
increased by 19.85 per cent to $472,600, which is slightly higher
than January's value of $460,500.
About VREB - The Victoria Real Estate Board was founded in 1921 and
since that time has been a key player in the development of
standards and innovative programs aimed at enhancing the
professionalism and community standing of REALTORS®. Formation of
the Board grew out of the realization in the early part of the last
century that there was a need to establish basic standards for those
working in the real estate industry.
View our press release and summary here.
View our complete statistical package here.
Notes for Interpreting Our
The use of sale price
statistics can be useful in establishing trends when applied over a
period of time, i.e. six months or longer. The Victoria Real Estate
Board cautions, however, that such information does not indicate the
actual value of any particular property. Those requiring specific
information on property values should contact a REALTOR®.
B.C. Real Estate Association
Qualification Rules Temper Housing Demand
Vancouver, BC –March 14, 2018
The British Columbia Real Estate Association (BCREA) reports that a
total of 6,206 residential unit sales were recorded by the Multiple
Listing Service® (MLS®) across the province in February, a 5.7 per
cent decrease from the same period last year. The average MLS®
residential price in BC was $748,327, up 8.8 per cent from the
previous year. Total sales dollar volume was $4.64 billion, a 2.6
per cent increase from February 2017.
“More stringent mortgage
qualification rules for conventional borrowers are dampening
housing demand in the province,” said Cameron Muir, BCREA Chief
Economist. “Since the new rules came into effect, BC home sales
have fallen more than 26 per cent, on a seasonally adjusted
Previous mortgage policy
tightening has negatively impacted housing demand for a period of
four to seven months, with the largest impact occurring in the
third month after implementation.
Year-to-date, BC residential
sales dollar volume was up 15.9 per cent to $8.47 billion,
compared with the same period in 2017. Residential unit sales
increased 4.1 per cent to 11,516 units, while the average MLS®
residential price was up 11.3 per cent to $735,755.
Mortgage Rate Forecast
- March 2018
Vancouver, BC –March 2018
The Path of Canadian Inflating
will dentine mortgage rates over the next year
Canadian economy slowed in the
second half of 2017
Bank of Canada to weigh impact
of higher rates and mortgage rules before acting
BC Housing Demand to
Slow Through 2019
Vancouver, BC –March 9, 2018
The British Columbia Real Estate Association (BCREA) released its
2017 Fourth Quarter Housing Forecast today.
Multiple Listing Service®
(MLS®) residential sales in the province are forecast to decline
8.6 per cent to 94,855 units in 2018, after decreasing 7.5 per
cent in 2017. A record 112,209 unit sales were recorded in 2016.
The ten-year average for MLS® residential sales in BC is 84,800
units. Strong employment growth, consumer confidence and
favourable demographics have been highly supportive of housing
demand over the last four years. However, slower economic growth,
tougher mortgage qualification rules, and a rising interest rate
environment are expected to slow the pace of housing demand over
the next two years.
“Housing demand in the
province is expected to moderate this year and in 2019,” said
Cameron Muir, BCREA Chief Economist. “More stringent mortgage
qualifications and rising interest rates will further erode
affordability and household purchasing power.”
The 5-year qualifying rate is
forecast to rise 35 basis points to 5.49 per cent by Q4 2018, and
another 21 basis points to 5.70 per cent by Q4 2019. “With home
prices already at an elevated level, BC households are more
vulnerable to rising interest rates.”
The supply of homes for sale
continues to trend at or near decade lows in most BC regions.
However, this condition hasn’t gone unnoticed by home builders.
There are over 60,000 homes now under construction in the
province, well above the previous peak of 45,000 units recorded in
2008. In Metro Vancouver, over 42,000 units are in the pipeline,
56 per cent more than recorded in 2008. Slowing consumer demand
combined with a surge in new home completions over the next
several quarters will create more balance in the housing market
and produce less upward pressure on home prices. The average MLS®
residential price in the province is forecast to increase 6.0 per
cent to $752,000 this year, and a further 4.0 per cent to $781,800
Canada Mortgage and Housing Corporation