New figures show the price for an average single family home in the Greater Victoria area now exceeds $900,000, as November sales rose 12 per cent compared to the same period last year. November sales also exceeded October sales.
Ara Balabanian, president of the Victoria Real Estate Board (VREB), said the sales spike likely reflect a response to changing mortgage rules, calling it a “good example” of how outside forces can change market behaviour.
The federal banking regulator — known as Office of the Superintendent of Financial Institutions —announced the implementation of new lending guidelines that tighten mortgage requirements, starting Jan. 1.
“We suggested last month that some buyers may accelerate their purchase timeline to buy a new home in anticipation of the mortgage stress test on uninsured buyers — those with a down payment of 20 per cent or more — that will come into effect on Jan. 1,” he said.
Based on sales, some buyers have in fact sped up their purchasing plans to avoid the new mortgage stress test, with more to come, Balabanian said.“It’s quite likely we’ll see a little bump in sales over December, and even January as buyers who are avoiding the stress test will be making purchases,” he said.
But Balabanian warns against reading too much. This is not the start of a new trend, he said.
“Generally the winter months, particularly December and January, are quieter for real estate,” he said. “December is traditionally the very lowest month for listings and sales.”
During the holiday season, sellers often pause their listings, which means there is often less choice on the market, he said. “However, many buyers suspend their searches, which means serious buyers can find interesting opportunities.”
For now, numbers in Victoria are pointing up. “While not a record, it is the highest November sales count we’ve tracked since 1996,” he said. “It is also rare that we see November numbers beat October numbers.” Other markets have reported have reported similar developments.
Local housing prices have also risen. According to VREB, the average selling price of a single-family home in Greater Victoria was $902,985, up 5.6 per cent from the month before and 5.9 per cent compared to the same time last year. Back in November 2016, the average price of a single-family home stood at $852,590.
Balabanian warned against reading too much into that figure. “The average for a month doesn’t indicate what most buyers will pay for a home – two or three high value properties selling in a month can really increase an average in a smaller market like Victoria,” he said.
Looking at Saanich figures, 78 single family homes sold in November for a total of nearly $65 million,with sales in Saanich East outpacing Saanich West. Prices in Saanich East for single family homes also outpaced prices in Saanich West — $855,300 versus $705,600.