A series of new figures show the local housing market in a state of uncertainty.
New figures from Canada Mortgage and Housing Corporation (CMHC) paint a mixed picture when it comes to new housing starts. Housing starts in the category of detached homes dropped by 32 per cent in March 2018 compared to the same period last year. New apartment starts, however, rose 77 per cent, for an overall increase of 31 per cent.
These figures have led CHMC to the conclusion that Metro Victoria appear to be moving in “different directions with single-detached and apartment units diverging.”
Overall, these trend-lines suggest that supply for single detached homes will remain low in the foreseeable future, while apartment units remain popular.
Housing start figures for Victoria appear in line with provincial figures. New housing starts for single-detached homes declined 21 per cent across the province, while all other starts rose 12 per cent, for an overall increase of four per cent, with considerable regional variations. Housing starts in the Greater Vancouver region rose 30 per cent, thanks to strong migration, household formation and employment growth in the region.
Overall, local prices continue to favour sellers. According to the British Columbia Real Estate Association (BCREA), year-to-year prices in Victoria have risen 15 per cent from 2017 to 2018, and nearly 21 per cent across the rest of Vancouver Island.
This said, it is becoming increasingly apparent that market conditions are starting to change. While the market remains a seller’s market favouring current home owners, figures from the BCREA show the overall market shifting towards a more balanced state, as new mortgage rules are starting to show their effect.
“More burdensome mortgage qualifications are having the predictable effect of swiftly curbing housing,” said Cameron Muir, BCREA’s chief economist in his April market update, which shows provincial sales declined nearly 25 per cent compared to the same period last year. “You simply cannot pull as much as 20 per cent of purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand.”
These provincial figures align with local figures that show sales dropped 25.9 per cent year-to-year.
