Blog by Mark Longpre

<< back to article list

Greater Victoria real estate sales reach 17 yr high for September

Greater Victoria’s real estate market flexed its muscles last month by ending with the highest number of September sales in 17 years.

“The last seven months have shown a steady improvement in sales and price stability,” Chris Markham, president of the Victoria Real Estate Board said Thursday.

At the same time, a spurt in sales over the $1 million mark pushed the average price for a single family house in the capital region to $619,936 in September, up four per cent from $596,498 in August. Last month saw 24 sale of $1 million plus.

“These included five sales of over $2 million, three in Saanich East, one in Victoria, and one on the Gulf Islands, which had a significant impact on the overall average price,” Markham said.

This is the first time since January 2008 that the average price for single-family homes topped $600,000. In December 2007, the average was higher, at $624,450.

Last month’s median - or mid-way - price for single family houses was $550,000, an increase of $10,000 from August, board figures show. The six-month average price was $581,498.

The average price for condominiums rose as well, moving to $325,106 last month, from $317,312 in August. The median in September was $295,000.

Townhomes saw their average price slide to $441,966 in September, from $455,430 in August. The median in September was $415,000.

A total of 776 homes and other properties sold in September through the board’s Multiple Listing Services. That’s up from 764 in August, and from 512 in September of last year, when the global economic crisis was in full force.

The highest number of September sales, since data was collected in 1990, took place in 1992 when 903 properties changed hands.

May 1991 recorded the highest number of sales for any month, at 1,083, since 1990, the board said.

The value of all property sales in September was $382.4 million. Sales included 437 single-family homes, 197 condominiums, and 79 townhomes.

September’s inventory of properties on the market was 3,419, down from 4,754 from the same month a year ago.

“We are now seeing some renewed upward pressure on prices as a result of the declining inventory,” Markham said.

Meanwhile, a global housing market recovery is underway, said Scotia Economics in a report released Thursday.

“Real home prices increased in a number of major developed economies in the second quarter of 2009, including Canada, Australia and the United States,” said Adrienne Warren, Senior Economist, Scotia Economics, in the Global Real Estate Trends report. “Prices were still falling in many other markets, including the U.K., France and Spain, but generally at a slowing rate. For the most part, however, real home prices are still lower relative to a year ago.”

Scotia Economics believes the improving sentiment in global residential real estate markets is sustainable. According to the report, the firming in pricing is evidence of growing confidence in the sustainability of the fledgling global economic recovery. Historically low borrowing costs, increased affordability, and home-buyer tax incentives in a number of countries are underpinning a modest revival in housing demand. Signs of a bottoming in home prices are likely now bringing some fence-sitters off the sidelines.

While not as robust as the revival in resale housing activity, new home construction in Canada has notably turned up, said the report. On a trend basis, housing starts are running just over 140,000 annualized units, up from a spring low of around 120,000 units. Most regions are showing gains, with the largest improvement in Canada’s four western-most provinces.

“Builders are responding to tight resale market conditions, which tend to spur relative demand for new homes,” said Warren.

Despite the modest rise in new construction, the inventory of unsold new homes, which has been trending higher since 2003, appears to have peaked, having edged down for a third consecutive month in August. The current overhang is a bit higher than its long-term trend, though still well below the peaks reached during the housing bust of the early 1990s.

“We expect resale markets will become better balanced in 2010 as pent-up demand from the depressed levels of last fall and winter wanes and as the number of listings increase, removing some of the recent incentive to add more new housing stock, and cooling price increases in both the new and resale market,” said Warren.