Victoria’s housing supply has been ticking upwards since 2016. (BCREA)

Report shows real estate market trending toward buyers

Local housing supply is going up, but prices are to remain stable

A new report from the organization representing realtors in British Columbia offers a mixed bag of goods for Greater Victoria home buyers and home sellers as 2019 approaches.

First the good news for potential buyers. According to the British Columbia Real Estate Association (BCREA) fourth quarter housing forecast, the regional housing supply has been rising since the start of the year, with much of the credit — or blame, depending on the perspective — falling to senior levels of government responsible for new mortgage rules (federal government) and the speculation tax (provincial government).

RELATED: October property sales pop in Greater Victoria

These current demand-depressing measures have coincided with new housing starts responding to the high prices of the past, as the number of housing units under construction in the Greater Victoria region has more than tripled over the past three years.

They are now 44 per cent higher than the previous peak in 2008 and experts might be concerned that housing supply is rising so fast, builders might end up sitting on units, prompting a pull back.

“Home builders are closely monitoring the absorption rates of their units currently under construction as well as assessing their capacity to increase production,” it reads.

In short, trends are moving in favour of potential buyers, provided they can pass the new mortgage rules, no small measure in light of the fact that Victoria has a relatively high share of what experts call highly indebted borrowers. Not surprisingly, the new rules have chased away potential buyers, which helps explain declining sales and the trend towards more balanced conditions.

“While home sales in Victoria have climbed since May, the effect of the mortgage stress test will likely continue to be a drag on demand over the next several quarters,” it reads.

But BCREA also has some good news for sellers and realtors. While government policies might have caused an “ebb in home sales” in the Greater Victoria region, the fundamentals remain strong, as the provincial economy continues to grow.

“After five consecutive years of strong economic performance, the resulting high employment level has pulled the unemployment rate down to a cyclical low, which is typically a precursor to upward pressure on wages and rising disposable income,” it reads.

Both ends of the demographic spectrum will also continue to boost demand. First, the region draws more than its fair share of retirees, most of whom are mortgage-free and not subject to the stress test, the report notes. “Moreover, retirees are less susceptible to the ebb and flow of the business cycle and are expected to help underpin housing demand in the region over the next decade.”

Their grandchildren — read: millennials — are also starting to enter the housing market as they start their own households. “Both local millennials reaching their household-forming life stage and millennial migrants seeking employment opportunities and housing affordability will bolster housing demand, especially in the urban areas of Victoria and Nanaimo,” it reads.

RELATED: Greater Victoria’s real estate market remains strong compared to rest of Canada

In short, the region will remain an attractive destination likely able to weather any major downturns. For sellers, this means that prices will be relatively stable in 2019 after rising some six per cent in 2018.

Technically, the region remains a seller’s market, setting up a tantalizing prospect. On one hand, sellers would not be foolish to expect a nice return on their properties. On the other hand, potential buyers can afford to be more choosy, partly because governments have shrunk the pool of potential competitors, and partly because more supply is becoming available. Overall, the BCREA predicts a marginal uptick in sales


Like us on Facebook and follow us on Twitter

wolfgang.depner @saanichnews.com

Just Posted

Canadian students are smart cookies

Canadian teachers also among highest paid in the developed world

Local fundraising initiative addresses tampon recall

Period Posse checking donations during 10-day campaign

Victoria Literacy Connection needs volunteers for new Reading Partner program

The program will be in five Greater Victoria elementary schools

Inspired by her kindergartners, Oak Bay teacher organizes fundraiser

Sally Hallam’s class is creating calendars to help plant trees

VicPD notify public of sexual assault with weapon in Esquimalt

Officers ask residents to be vigilant while investigation continues

Langford elementary school kids test their hand at entrepreneurship

Students sold their own products at a Young Entrepreneurs Fair Friday

POLL: Are you dreaming of a white Christmas?

The rain Vancouver Island is famous for is coming down in buckets,… Continue reading

Greater Victoria Crime Stoppers wanted list for the week of Dec. 11, 2018

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Boeser has 2 points as Canucks ground Flyers 5-1

WATCH: Vancouver has little trouble with slumping Philly side

B.C. animation team the ‘heart’ of new ‘Spider-Man: Into the Spider-Verse’

The animators, largely based in Vancouver, ultimately came up with a creative technique that is drawing praise

Light at the end of the tunnel for UN climate talks

Meeting in Katowice was meant to finalize how countries report their emissions of greenhouses gases

Janet Jackson, Def Leppard, Nicks join Rock Hall of Fame

Radiohead, the Cure, Roxy Music and the Zombies will also be ushered in at the 34th induction ceremony

Supreme Court affirms privacy rights for Canadians who share a computer

Section 8 of the Charter of Rights and Freedoms protects Canadians against unreasonable search and seizure

‘Ghost bikes’ installed to remember teen cyclists who died in Port Alberni

Cycle Alberni installs memorials to remember teens, remind all about road safety

Most Read