Victoria Real Estate Market Report August 1, 2020
From the time of our last update on June 1st, the Victoria real estate market has shifted radically. You may recall that because of COVID-19, home sales in April and May were down about 50% compared to the same months in 2019. Home buyers who were taking a step back in April and May have jumped back in with both feet starting in June. The tighter mortgage rules announced by CMHC, which took effect on July 1st, no doubt spurred some buyers to make their purchases before July 1st.
We saw a huge increase in market activity starting in June which coincided with the loosening of COVID-19 restrictions and a general feeling that in Victoria we had avoided the worst of COVID-19. In June, a total of 808 properties sold in the Victoria Real Estate Board (“VREB”) region. This was 9.2% more than the 740 properties sold in June 2019 and an astounding 76.8% more than May 2020. Then, in July, 979 properties sold in the VREB region, which was 38.7% more than the 706 properties which sold in July 2019 and 21.2% more than sold in June 2020.
Single-family home sales in June were up 16.8% over June of 2019 and single-family home sales in July were up 61.1% over July 2019.
Condo sales were less dramatic. The number of condo sales in June 2020 was down 3.2% from June of 2019 and condo sales in July were up 11.2 from July 2019. Demand for condos has likely been dampened by the general uncertainty surrounding strata insurance.
Because of the effect of COVID-19, we believe that our busy spring market which typically starts in March and April was delayed until June.
June and July saw many single-family homes in Victoria garner multiple offers, particularly those priced under $1 million. This can be explained, at least in part by the fact that our inventory of properties available for sale in June and July was down. The number of active listings for sale on the VREB at the end of June was 11.3% lower than the total available at the end of June 2019. The number of listings for sale at the end of July 2010 was 10% less than the total available in July 2019 and 1.7% lower than the available listings at the end of June 2020.
So, we had a combination of a lot of pent-up demand on the part of buyers because of the “COID-19 pause” in April and May and we also had lower inventory. Simple supply and demand.
Given all of that, it wasn’t surprising that, notwithstanding the pandemic, the price of homes and condos continued to rise moderately in June and July. The benchmark value for a single-family home in June 2020 was 4% higher than in June 2019. And July saw another 1.6% increase.
Condo prices in Victoria increased more modestly. Benchmark price for condos in June 2020 was 1.3% higher than the same value in June 2019. Condos increased by another .8% in July 2020. Again, we believe condo sales and prices were affected by the uncertainty and media attention around strata insurance.
Going forward there are a number of wild cards which may affect the Victoria real estate market:
- The possibility of a second wave of COVID-19 which will likely result in reinstituting restrictions on social movement.
- The effect of expiring mortgage payment deferrals and eviction freeze. These are temporary relief measures. (Although CMHC was quoted in The Financial Post as stating that it is considering options to “potentially develop new tools” to employ when the 6 month deferral on mortgage payments ends.)
- Short term rentals which are now vacant due to COVID-19 may be converted to long term rentals or potentially sold, adding to supply in the market.
- Thousands of students in Universities and Colleges in Greater Victoria will not be attending classes in September, but rather taking classes online. So, many students from out of town will not be renting suites in Victoria. In local markets, particularly around those schools, this could result in lower rental rates for landlords and more homes coming on the market.
- Our housing market will also be affected by the elephant to the south. Canadian exports rely heavily on the US market and tourism to Canada is predominantly Americans. Our economy, and thus our housing market will be affected by how well or how poorly the Americans manage the pandemic.
You can find the full Victoria Real Estate Board report as well as recent reports from the BC Real Estate Association and the Canada Mortgage and Housing Corporation by clicking on the links to the right.
If you have any questions, we’re here to help.
Hal Decter, LLB & Audra Poole