November Real Estate Update:
I hope this message finds you and your families safe, healthy and in good spirits. I endeavour to bring you relevant market information, new listings, and the latest news which is shaping our local real estate market. Before I jump into November’s statistics, I would like to mention that a few weeks ago we announced a new team member joining the Carroll Group. We are thrilled to welcome another former athlete with a tremendous background: Lucas HammondLucas has competed internationally for Canada in Rugby 7’s in the Commonwealth Games, 7s Rugby World Cup, and Pan Am Games. He plans to compete in the delayed 2021 Tokyo Olympics when they take place. In joining our team, Lucas will help to ensure that the Carroll Group continues to be at the cutting edge in real estate marketing and personal service. Lucas Hammond (left), James Robertson (middle), Alex Carroll (right).
The ignition of our spring market in June has yet to show signs of slowing down. When pent-up demand returned in full force, June produced 808 sales after just 287 sales in April. The activity level has sustained since June and yet again October has marked another record month for sales with 990 (59.9% more than last October).
The average sale price of a single family home in the Victoria Real Estate Board was over $1,000,000 for the first time ever in June and climbed from there to its peak at $1,086,735 in September. It fell slightly to $1,047,380 in October, but it is all relative to our exceedingly low inventory levels that are fuelling multiple-offers and competition among buyers. The median sale price in this segment has also climbed from $824,000 in May to $893,000 in October. October’s median sale price is the highest our real estate board has ever recorded.
More sales in the luxury market are influencing both of these numbers. The number of sales above $2,000,000 so far this year (SFD – 171) has already obliterated the number of sales for the entire year in 2018 and 2019 (89, 85). I expect at year end we will see that this figure has been influenced by a greater number of buyers originating from off the island.
According to the Buyer’s Origins Report published by our board from Q1-Q3 (ending Sept. 30) it appears that the number of buyers originating from the Lower Mainland, Ontario/Quebec, will all be up this year vs. 2019. So far this year greater Vancouver has contributed 8.96% of the buyers in our market, ON/QC – 4.05%, USA – 0.92%. As is the norm, around 3/4 of those purchasing real estate in Victoria are Victorians.
The Bank of Canada’s purchases of Canada Mortgage Bonds (debt securities guaranteed by the Government) ceased in October. In their minds, there is enough liquidity in the market for them to take this step. They surpassed $8 Billion dollars worth of these bonds in July and in turn had an effect on suppressing rates by creating more liquidity for mortgage originators (who sell the government MBSs).
Another initiative that came to an end in October was deferring mortgage payments. At the end of August, 16% of all Canadian residential mortgages had deferred at least 1 payment (32% of which have since resumed payments). Closer to home, the number was 10.3% at the end of August in British Columbia (just for CMHC insured mortgages). It’s unlikely that mortgage delinquencies will have a huge effect on our market in Victoria but it will be interesting to monitor nonetheless.
Sales in the condo market have climbed slowly from when they bottomed out in April (76 Sales) to 293 Sales in October. Despite my own interpretation that the condo market was failing to keep up with new inventory, October’s condo sales suggest demand is still healthy in this segment (the highest number of sales in a month since 2017). Of the 293 Sales, 111 were below $400,000 and 50 were over $600,000 (close to last month’s all time high at 52).
Factors supporting our condo market are affordability, low rates, and thin rental inventory (Greater Victoria’s vacancy rate is still just 1.2 percent). I will continue to monitor our inventory level to sales ratio as we head into the Winter months.
For those that are currently participating in the market, our industry has adopted new business practices and is emphasizing the use of technology in order to showcase properties as safely as possible. Listings can include video property tours and 3D tours and we are using health disclosures, social distancing, and disinfecting/sanitary procedures to help limit the risks associated with property visits. Feel free to reach out to us with any of your market related questions.