Victoria Housing Trends – September Updates
The Victoria real estate market continues to be characterized by low inventory and high prices. There is also a concern that raising interest rates will drastically reduce property market activity and prices across all of Canada.
Because many Canadians carry debt, they are particularly susceptible to interest rate movements – one only has to look at the events of 2018, where the rate of home price appreciation came to an abrupt end due to a series of interest rate hikes.
Condos and Houses
Early on in the pandemic, people believed that condos might no longer be a popular sort of housing – however, this has been proven untrue. Condos are beign purchased in large numbers, but prices have not kept up with house prices as more condo owners do want to sell.
This trend shouldn’t continue for too long however since condos are traditionally the first step on the “property ladder”, and presently the rungs on that ladder are moving further apart. At some point, too many people won't be able to afford a house, and the demand for single family homes will wane until condo and house values come closer together.
In Greater Victoria, there were 831 houses sold in August, 15.1 percent fewer than the 979 sold in August 2020 and 0.5 percent fewer than the prior month of July.
With 345 units sold, condo sales were up 31.7 percent from August 2020. In August 2021, 21.5 percent more condominiums were sold than in July 2021. With 357 sold, single-family house sales were down 29.9% from August 2020. In August 2021, there were 9.8% fewer single-family homes sold than in July 2021.
Condo transactions in the first half of 2021 are nothing short of astounding. Purchases are twice as high as they have been in previous years. However it should be noted that population growth has been low, so has all the activity happened in the first half of the year only?
Forecasts for 2021 and 2022 are fraught with uncertainty. The market will respond to any further COVID-19 restrictions, and whether people are able to completely return to their offices and classrooms.
Among economists, there is no agreement on how things will play out. Despite the fact that most economic fundamentals have faltered, market euphoria and government assistance have resulted in price acceleration and record house purchases.
People currently planning to sell a home can take heart because home values are at all-time highs and want to push ahead and sell during the pandemic.
People planning to buy a home could wait for a possible market correction, but there’s no guarantee that prices will be lower by the end of 2021.
Whether you’re planning on buying or selling, at Jack Barker we can help you navigate the process and find the best home for you. Just get in touch to get the process started.