Friday May 1, 2020 ~ GREATER VICTORIA
Real Estate Market Analysis by Mary P Brooke ~ West Shore Voice News
It should be a surprise to no one that the impact of COVID-19 has had a dampening effect on the real estate market in Greater Victoria.
What with physical distancing there has not been much room for the normal activities of real estate sales (i.e. property showings and open houses). And with the self-isolation required during the pandemic, people are for now hunkered down in homes they already have. Further, the economic impact of the pandemic which has kept most people out of the active workplace has challenged current mortgage scenarios, let alone any new ones that might be contemplated.
The pandemic was officially declared in BC in mid-March, therefore April was the first month showing a full-impact of the pandemic in data issued by the Victoria Real Estate Board (VREB) today.
In April the overall sales tally of residential properties in Greater Victoria plummeted by 58.5% compared to April 2019: a total of 287 properties sold last month compared to 696 in April last year. As well, the April 2020 tally was 52.8% lower than in the previous month of March 2020.
The volume of single family home sales dropped 55.8% last month compared to April of last year. Sales of condominiums were down 64% from April 2019 with 73 units sold.
Sales lower than what VREB expected:
“We continue to see the impact of the COVID-19 pandemic on the local real estate market,” says Victoria Real Estate Board President Sandi-Jo Ayers. “Sales numbers are much lower than what we expected to see this spring and new listings are slow to come to market as owners wait to see what our community’s trajectory is over the course of this pandemic.”
Overall real estate sales volume had been steady through 2019 into early March 2020 then dropped significantly due to overall economic inactivity because of the pandemic. [See graph above]
The available inventory of properties for sale remains lower than in April last year (2,305 active listings at the end of April, which is 16.2% lower than April 2019), with the market effectively on pause. “Like so many other industries, much of the real estate market is watching, waiting and adapting,” said Ayers in the standard monthly VREB news release.
The number of active listings at the end of April at 2,305 being higher than the 2,252 seen in the previous month of March 2020, likely indicates people selling for financial need (i.e. income impacts of COVID-19 such as loss of work, loss of a business, loss of investment income) more than any sort of consumer-confidence indicator.
Real estate services and Realtors were declared an essential service in BC back in March in order to protect consumers who need to make real estate transactions during this time. Internet, wireless and remote technology has allowed VREB and its members to move much of their work online.
West shore property sales profile (April 2020):
The profile of sales volume and average sale price by property type, shows Langford in the lead during the pandemic. Langford, Colwood and Sooke encompass most of the west shore active and pro-active real estate market.
For single family homes in April 2020, Langford saw the highest number of sales. With 30 sales ($804,730 average sale price), for Langford that was 20.6% of the full Greater Victoria housing sales volume in April 2020. Langford surpassed Saanich East — frequently the leader for sales volume — which had 28 sales ($974,308 average sale price), which is 19.3% of the 145 sales in Greater Victoria in April. Colwood saw 10 sales ($701,520 average sale price), and Sooke saw 17 sales ($603,388 average sale price). All those sales volumes are notably below pre-pandemic volumes. That’s a bit of a dip in housing average sale price in Colwood, otherwise prices in all the other areas remain strong.
For condominiums in April 2020, sales were highest in Victoria (where there is a larger volume of condos compared to other areas). But in the west shore, Langford again saw the highest volume of sales at 11 (average sale price $393,100) which is 15% of the 73 sales seen overall in Greater Victoria (average sale price $421,512). Colwood saw 2 sales (average price $314,500). No condo sales in Sooke (not much of that property type in that area). The rest of the condo sales volume breakdown in April 2020 included 8 in Saanich West, 5 in Saanich East, 3 in each of View Royal, Esquimalt and Oak Bay, and 1 in Sidney which is packed with condos owned or occupied mostly by seniors.
For townhomes in April 2020, with 15 sales Langford captured half of the townhome sales volume of Greater Victoria. The 30 sales in Greater Victoria saw an average sale price of $608,507 while Langford held its own with an average townhome sale price of $531,413. Property value strength was seen in Saanich East where 4 townhome sales had an average sale price of $703,725. There was one townhome sale in Sooke last month (at $499,000), and no townhome sales in Colwood.
Why Langford holds strong:
The strength of Langford housing sales volume and pricing is not surprising. The municipality invites business and investment as a key plank of its ethos. Because of that aggressive economic activity as made possible by the pro-development mentality, the sheer number of all residential property types has grown steadily since around 2010.
That has kept housing prices in Langford at relatively low levels (compared to the Victoria/Saanich core areas), though home ownership is still a huge commitment in Langford as well as anywhere in the Greater Victoria region. Housing prices in Greater Victoria and south Vancouver Island have been resilient for decades due to the lure of the temperate climate and virtually year-round recreational opportunities.
Housing prices have been equally upward-pressured in Vancouver and Toronto since the mid 1980s (to some extent for lifestyle in Vancouver, but in both cases due to proximity to major centres of business, with the Vancouver market in particular being changed dramatically by the influx of capital from Hong Kong ex-patriates).
People who are not particularly financially affected by the economic changes brought on by the pandemic (i.e. they have plenty in reserve and don’t carry unsuitable mortgage debt) are still fluid in the real estate market. Given the number of residential properties in Langford — and much of it new or nearly-new — there is value that can be grabbed and gained by those who are in a position to do so during a time when the chips are down for most other people.
This follows the stock market principle of ‘buy low and sell high’. While prices are holding, the ability of most people to participate in the housing market right now is low which leaves others with unrestricted capital the opportunity to manoeuvre if they can do so quickly.
======= About the writer:
Mary P Brooke, editor and publisher with Brookeline Publishing House Inc,, founded the weekly West Shore Voice News in 2014 which became daily online in October 2018. West Shore Voice News evolved from Sooke Voice News which (published weekly during 2011-2013). Mary’s focus on the west shore goes back to 2008 with her first serialized publication MapleLine Magazine (quarterly during 2008-2010). Ms Brooke at one point held her BC real estate licence (in the 1990s).