Monthly Real Estate Update

Philip Illingworth
Victoria
British Columbia

        Home        For Sale       Buying in Victoria        Selling Your Home        My Victoria        Market Update        Site Map       Contact

Fireman's Park or should that be Fireperson's Park?      

Month-to-Date Victoria Market Statistics

May 14,  2018

 

Mont to date
May 2018
End of
May 2017
Net Unconditional Sales: 491 1,006
New Listings: 973 1,451
Active Listings: 2,255 1,896

Left Column: stats so far this month.  Right Column: stats for the entire month from last year.
*This will be updated weekly at www.AllVictoriaBCRealEstate.com & www.MyVictoria.ca

 

MyVictoria Report  

April 15, 2018


Careful What You Wish For

The desire of some well-meaning British Columbians for government to drive down the price of homes through demand-side policy may sound practical at first blush. However, when you consider the broad and deep economic toll that a negative shock to home prices would exact on both homeowners and renters, it quickly becomes apparent that such an approach is at best, a mug’s game. BCREA Economics analysis* shows that even a relatively modest negative price shock will produce significant consequences to the BC economy.  

Nearly 70 per cent of British Columbian households own their home. A relatively minor 10 per cent negative shock to home prices would extinguish $90 billion of their wealth, or $70,000 of the average home owner’s equity. While some may see this as a paper loss, it will have a significant impact on the economy, as declining household wealth reins in consumer spending. Retail sales would suffer, with an estimated $1.8 billion in forgone revenue in the first year after the shock. Home construction activity would fall dramatically. Home builders would cut back production 25 per cent; that’s 10,000 fewer housing starts in the first year alone. A negative price shock would markedly slow the expansion of the housing stock, creating even more critical housing supply problems down the road.

Across the economy, a negative home price shock will slow growth. Tens of thousands of jobs will be forfeited. The unemployment rate will shoot up. A 10 per cent negative price shock will slow real GDP growth to 1.5 per cent from a baseline of 2.7 per cent. That’s $3 billion in lost activity. If home prices fell 35 per cent, a level some activists are championing, the BC economy would collapse into recession. The average home owner would have lost $245,000 in equity, housing starts would fall by half, 64,000 jobs would be forfeited–sending the unemployment rate to 7.5 per cent with $4.4 billion in forgone retail sales and a colossal $8 billion loss to GDP in the first year.

This analysis does not account for the negative impact on provincial tax revenues, expanding deficits, ballooning debt and credit downgrade risks.

 *Based on simulations using BCREA’s econometric model of the BC economy augmented by a housing Vector Autoregression model.

Full Report & Graphs

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 remember.


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 email.

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 visit http://myvictoria.ca/2018/ and share my travels.

Have a great New Year,

Philip Illingworth


 

                                     Victoria Vacancy Rates flat but Rents Up

Annual 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 supply.  Details

Philip Illingworth

 

Sales to Active Listing Ratio to end of March 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.  The new mortgage qualifications from the Federal Government and the new undefined new taxes from the new Provincial Government are starting to show signs of affecting the Victoria Real Estate Market.

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 estate questions.

Philip Illingworth

 

                                 Victoria Real Estate Board

 

Outside Influences Impact Spring Real Estate Market in Victoria

April 3, 2018 Victoria BC -A total of 688 properties sold in the Victoria Real Estate Board region this March, 25.9 per cent fewer than the 929 properties sold in March last year, but a 26.2 per cent increase from the month previous. The sales of condominiums were down 28.2 per cent from last year in March with 211 units sold. Single family homes were 30.8 per cent down from the year previous, with 337 sold this March.

"As we expected, March sales are tracking lower than in 2017," says Victoria Real Estate Board President. "This is likely due to a number of factors that have created hesitation in consumers, including recent heavy measures by the provincial government to reduce the value of home prices and the federal government's new mortgage qualification rules. Combine these factors with rising interest rates and you've got a housing market that is in transition due to outside influences. Every time there is intervention into a market, it takes a few months for the market to rebalance. With the continual changes of late from different levels of government, our market is experiencing a new cycle of ongoing uncertainty."

There were a total of 1,766 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of March 2018, an increase of 14.3 per cent compared to the month of February and 13.5 per cent more than the 1,556 active listings for sale at the end of March 2017.

"Despite all of the above, we continue to see benchmark price increases across our market and demand persists - partly due to low inventory - but also because of our highly desirable location," adds the President. "Specific areas and price points are experiencing varying pressure on price and demand - which creates micro-markets. We are still seeing multiple offers and above asking price sales in some segments. Active buyers in our market may see some relief as inventory is slowly growing. This showcases why it is important to work with your local REALTOR® in this transitioning market to ensure you have the most up-to-date information to make purchasing and selling decisions."

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March 2017 was $785,600, while the benchmark value for the same home in March 2018 increased by 9.4 per cent to $859,400, higher than February's value of $840,300. The MLS® HPI benchmark value for a condominium in the Victoria Core area in March 2017 was $409,700, while the benchmark value for the same condominium in March 2018 increased by 19.6 per cent to $490,000, which is higher than February's value of $472,600.

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 Statistics

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

 

New Mortgage Qualification Rules Temper Housing Demand

Vancouver, BC –April 12, 2018   The British Columbia Real Estate Association (BCREA) reports that a total of 7,409 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in March, a 24.6 per cent decrease from the same month last year. The average MLS® residential price in BC was $726,930, up 5.3 per cent from the previous year. Total sales dollar volume was $5.39 billion, a 20.6 per cent decline from March 2017.

 “More burdensome mortgage qualifications are having the predictable effect of swiftly curbing housing demand,” said Cameron Muir, BCREA Chief Economist. “You simply cannot pull as much as 20 per cent of the purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand.”

Despite the decline in consumer demand, the supply of homes for sale remains low in most BC regions. Total active listings on the market are essentially unchanged from March 2017, and are at or near a 12-year low across the province. As a result, home prices are expected to continue an upward trajectory.

Year-to-date, BC residential sales dollar volume was down 1.7 per cent to $13.9 billion, compared with the same period in 2017. Residential unit sales decreased 9.4 per cent to 18,927 units, while the average MLS® residential price was up 8.5 per cent to $732,243.

Full Details

Mortgage Rate Forecast - March 2018

Vancouver, BC –March 2018  

The Highlights:

  • 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

  •   

  •                           

Full Details

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 in 2019.

Full Details

 

 

 

 Canada Mortgage and Housing Corporation

 

More Market Information:

 


        Home        For Sale       Buying in Victoria        Selling Your Home        My Victoria        Market Update        Site Map       Contact

Philip Illingworth
DFH Real Estate Ltd.
Phone        250-477-7291
Toll Free    800-668-2272
Web  www.MyVictoria.ca

Email me now
 

Page me Instantly
 

You are receiving this message because you have subscribed to www.MyVictoria.ca Email Updates or have requested information from Philip Illingworth or are a client of Philip Illingworth. This monthly email is sent to help you to keep updated on Victoria Real Estate Market Conditions. If you feel you have received this message in error or if you prefer not to continue receiving these e-mails, please use the  unsubscribe link to remove your address.

Philip Illingworth    DFH Real Estate Ltd.
Feature Properties     Home

"Important Message"

It's hard to believe I have been sending out a Real Estate Update since 2003. I use various sources to bring you the latest news as well as my humble opinion on where the market is going. If you would like to continue receiving my updates please click the box below.

 

 

Yes, send me updates