Victoria Real Estate Market Update – October 2020

I hope this message finds you and your families safe, healthy and in good spirits. I endeavor to bring you relevant market information, new listings, and the latest news which is shaping our local real estate market.  Before I jump into September’s statistics, I would like to mention that we have a new team member joining the Carroll Group that is in the final stages of securing his real estate license. We will share more of this news next month but be sure to follow along for all the updates on our Facebook Page. The conversation continues to circle around the COVID-19 pandemic and the explosion of activity we have experienced since mid-May. June marked the return of a ‘spring market’ with 808 sales after just 287 sales in April.

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 that month (June). Since June, the average sale price of a single family home has climbed to an astonishing $1,086,735 in September. The median sale price in this segment has also climbed from $824,000 in May to $875,000 for September (down from $886,988 in August).

More sales in the luxury market are influencing both of these numbers. The amount of sales above $2,000,000 so far this year (SFD – 137) 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.
The Bank of Canada has continued to promise low rates for the foreseeable future and remains committed to propping up our real estate values. They surpassed $8 Billion worth of Canada Mortgage Bonds (debt securities guaranteed by the Government) in July and in turn are creating liquidity for mortgage originators (who sell the government MBSs).
Another development I am monitoring is mortgage deferrals coming due in Q4. At the end of August, 16% of all Canadian residential mortgages had deferred at least 1 payment (32% of which have since resumed payments).
Sales in the condo market have climbed slowly from when they bottomed out in April (76 Sales) to 283 in September. With that said, at the end of September, we now have more condo listings (1256) than we have had over the last 10 years. The benchmark value of a condo in the core dipped to $510,600 this September vs. $512,500 in September 2019.
To this point in the year, sales in the condo market have trended in the right direction since April, but inventory seems to be building faster than sales can keep up. My expectation is that we should experience some downward pressure on condo prices into the fall as more newly built condos will feed supply.
Despite some concern over some softening in the rental market, Greater Victoria’s vacancy rate is still just 1.2 percent. This is one of many factors that are supporting prices currently.
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.