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 1st 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
Victoria Real Estate Market's Record Breaking 2016, Demand Likely to Continue in 2017
A total of 471 properties sold in the Victoria Real Estate Board region this December, 1.3 per cent more than the 465 properties sold in December last year.
Inventory levels edged lower than last year, with 1,493 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of December 2016, 40.7 per cent fewer than the 2,517 active listings at the end of December 2015.
"As we expected, 2016 broke records in terms of the number of properties sold in our area," notes Mike Nugent, outgoing 2016 President of the Board. "10,622 properties sold, which exceeds our previous high of 9,241 sales in 1991."
The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in December 2015 was $613,600. The benchmark value for the same home in December 2016 has increased by 23.6 per cent to $758,500.
"We expect sales to continue to be strong but we don't expect to see the phenomenal activity we saw in 2016 for 2017. Inventory continues to be low," adds President Nugent. "You can't sell something that isn't there. There is certainly an ongoing demand for properties. This is reflected in the fact that 25 per cent of sales this month sold over their asking price. The majority of these properties were in the up to $750,000 price point, so your average buyer will face a competitive market."
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The Neal Estate Team is your #1 source for all of your Victoria BC real estate needs. Get in touch with us online or by phone at (250) 386-8181 to speak with a Victoria real estate buying or selling expert today. With decades of experience as a top selling Victoria REALTOR® and ranked in top 1% globally with over 4,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Team have the industry experience and market knowledge to help you make smart and informed buying or selling decisions.