Ron Neal's Candid Comments on the Victoria Real Estate Market for January 2017

We shattered previous records ending the year with more than 10,622 properties sold in 2016. Without a significant increase in available listings we’re unlikely to see that repeated in 2017.

As expected with the recent trend, we ended 2016 in Victoria with the lowest available supply of listings we seen in decades. We were down to under 1,000 available residential listings at the year-end of a total 1,493 active listings which includes over 300 bare land listings and over a hundred commercial listings. In contrast, there were 2,517 total listings at the end of December 2015, which was already historically low!

There were just 471 sales in December, representing about half of the available inventory, or a two month supply. The lack of available listings has led to a drop in sales volume and continues to put upward pressure on prices in our market.

We have seen a significant increase in the number of foreign buyers over the past few months, mostly Americans from south of the border and repatriating Canadians. We have also experienced an increase in the number of Chinese and Persian foreign buyers, many of whom would have purchased in Vancouver prior to the new tax. Furthermore, we’ve experienced a decrease in the number of buyers coming from Vancouver, consistent with their sharp decrease in sales activity following the introduction of the Metro Vancouver Foreign Buyer Tax.

There are many variables to consider in trying to forecast the year ahead. The recent first time buyer incentive granting interest free loans of up to $37,500 to assist with down payment and affordability is certain to contribute to demand. The recent further mortgage rule tightening, Vancouver foreign buyer tax and Chinese laws restraining movement of capital will have their impact too.

You will have received your updated property tax assessment notice and a probable increase from last year of between 10% and 50%. The benchmark home price index for single family homes in Victoria’s core rose 23.6% year over year from $613,600 last year to now $758,500. Prices changed at very different rates for different property types, price ranges and areas throughout the Greater Victoria region in 2016. Keep in mind that your assessment is the estimate of its value as of last July 1^st and the assessor probably is unaware of your property’s current condition and any improvements. If you think its high and don’t want to pay more than your share of tax, or if you are considering selling in 2017, please contact us for a complimentary review of your home value or visit us online.

My own personal prediction is that we will see our normal seasonal increase in listing supply as we begin the New Year. I don’t expect to see the supply build dramatically as there seems to still be much backed up demand of buyers who want to buy but who haven’t had anything much to choose from. Provided the supply of available listings does not escalate dramatically I expect us to continue to see competition for those available and continuing upward pressure on prices. What do you foresee?

Wishing you a happy, healthy and prosperous new year!

Ron Neal and The Neal Estate Team.
Victoria's Real Estate Experts

Media Release from VREB