According to Canada Mortgage and Housing, Greater Victoria home builders ramped up production as temperatures rose this summer. Builders started 580 housing units in the region in August, a huge jump from the 183 started during the same month last year. Since January, builders have started 2,765 new homes, up from the 2,096 started through the first eight months of 2017. Braden Batch, senior market analyst for CMHC, said a majority of the starts were again in Langford and were mainly multi-family homes.
The market statistics for September continue to show a decline in residential sales in Victoria (down 16.7% compared to September 2017) and an increase in listings (up 33.9% compared to September 2017). Our real estate market is continuing to find a safe footing in a changing environment.
According to a recent report by Royal Bank of Canada economists, Canada’s housing affordability has reached its worst level in 28 years. The share of income a household would need to cover ownership costs hit 53.9% in the second quarter of 2018.
Greater Victoria had the third highest affordability measure in Canada at 65%, behind only Vancouver (88.4%) and Toronto (75.9%). “Poor affordability, the mortgage stress test and other market-cooling measures introduced by the B.C. government have weighed heavily on buyers this year,” said RBC, adding home resales in the region fell 20% over the first eight months.
RBC’s economists are predicting that affordability levels will continue to deteriorate if interest rates keep rising, but they expect household income increases to soften the blow for buyers.
Downtown Victoria remains a city of renters and is No. 2 on the list of Canadian cities with the fewest homeowners, according to numbers from Statistics Canada. Compiled by online real estate blog Point2Homes, the numbers show Victoria hasn’t changed much over the past 16 years, with homeowners making up 39% of the population in 2016. It was 38% in 2001. These numbers change significantly in areas such as Langford, which has close to 80% homeowners and Saanich at more than 70%.
The proposed Speculation Tax in B.C. continues to be very controversial. The finance Minister, Carol James, states, “We are moving ahead with the speculation tax because as a government, we have a responsibility to tackle the housing crisis head-on and we are encouraged by the early signs of moderation in the housing market.” Albertans have invested heavily in second homes in B.C. especially in Victoria and Kelowna, not because they are “speculating on the market” but because they see themselves retiring to B.C. in the future. Albertans have hired lawyers to respond to the proposed tax on their second homes in B.C. if it is voted in. They are inviting all second homeowners to join them. A copy of a letter from their lawyer which you are free to share is available here.
Sotheby’s Fall Market Forecast
For a snapshot on the major Canadian real estate markets, see the latest Sotheby’s Fall Market Forecast.
I have the seller’s permission to open the doors to my listing at 1851 Crescent Road to the public this weekend on Saturday, October 6th at 2 – 4 pm. If you, or a friend or family member, are interested in viewing this property as a potential buyer, I would highly recommend you drop by. Crescent Road is the ultimate executive beach house. Sited in the heart of the bay on Crescent Road, it is styled on a Malibu beach house with the quality of construction seldom seen in Victoria. It was recently featured in a blog in the U.S.
On Sunday I will be hosting open houses at 2 very affordable seaside condos in Sidney where the complex is recognized for the great sense of community. Join Kirsten and I between 1 – 3 pm at 10461 Resthaven Drive.
If you have a real estate question, please do not hesitate to contact me.