The local real estate market continues to set records, as nearly 1,000 properties changed hands in the month of September.
According to the Victoria Real Estate Board (VREB), 989 properties sold in VREB’s region in September, 60.6 per cent more than the 616 properties sold in September 2019 and one per cent more than the previous month of August 2020. Looking at specific types of properties, sales of single family homes were up 91.9 per cent from September 2019 with 539 sold, while condominium sales were less strong, but still up 26.7 per cent from September 2019 with 280 units sold.
With these figures, the local real estate market echoes developments elsewhere, a point highlighted by local realtor Leo Spalteholz in his analysis at househuntvictoria.ca.
“Whether bulls, bears, or regulators, not a single pundit predicted that the largest economic shock in our lifetime would cause house prices to spike in Victoria and across North America,” he said.
Sandi-Jo Ayers, VREB’s president, acknowledged this aspect of the market in pointing to the pent-up demand from dampened sales in April and May.
“There’s no doubt that buyers are extremely motivated and this increased demand, coupled with limited inventory, fueled the September market,” said Ayers.
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Spalteholz, for his part, expressed surprise. “I argued back in April that the market was well positioned to absorb this shock, and I didn’t see a big downside risk, but I certainly never expected the boom that we’ve seen, with luxury sales off the hook and the detached market back to nearly the crazyness we saw in 2016.”
The numbers certainly bear this out, as the Home Price Index (HPI) benchmark value for a single family home in Victoria’s core rose by 3.5 per cent to $879,200 in September 2020 compared to September 2019. (By way of context, this figure dropped slightly compared to August 2020). Looking across the region, the HPI for a detached home on the the Saanich Peninsula was the second highest in VREB with $842,800, up 7.5 per cent from a year ago. The figure for the Westshore was $695,500, up 7.7 per cent.
So what lies ahead? Predictions remain hazardous, but the current boom has a historical precedent as Spalteholz notes.
“I’m almost sure the market will not stay this hot for long, but right now this is where we are,” he said. “It is perhaps interesting to note that after the financial crisis we had a price boom as well. That lasted for about a year before it burned itself out and consumer changed toward the negative.”
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