VRBA’s Crystal Ball Housing Forecast was presented by:
- Kyle Kerr, Past President, VREB
- Cameron Muir, Chief Economist, BCREA
- Braden Batch, Senior Analyst – Economics, CMHC
The theme for 2019 is market moderation.
The economy is strong, unemployment is low, interest rates are reasonable – all essential for a healthy housing market.
However, Victoria’s historically high housing starts of 4,273 in 2018 are unlikely to continue.
Signs of a moderating market are already underway.
There were 1,988 active MLS listings in Dec 2018, 46.3% more than the 1,384 active listings in Dec 2017.
We are moving into more balanced territory. Historically, listings have averaged 2,757.
There were 7,150 properties sold in 2018, 25% less than the 8,994 sold in 2017.
Much may be attributed to the mortgage stress test reducing homebuyers’ purchasing power by 20%.
All markets were impacted by the change but young buyers were hit hardest.
Since 2003, peak MLS sales were 10,622 in 2016 followed by 8,944 in 2017 and 7,150 last year.
The benchmark value for a single family home in the Victoria Core Dec 2018 was $858,600, an increase of 3.2% over the previous year, but down from Nov 2018.
Migration to Victoria peaked in 2017 followed by a decline in 2018.
Almost half of housing starts were rentals to accommodate many priced out of home ownership.
Watch for a spike in housing supply as sales decline and existing projects under construction come on stream.
The key message is peak sales and prices are not sustainable but moderation should still provide a reasonably strong market and economy.
Three levels of govt can assist a soft landing by acknowledging the changing market and practice restraint on regulations, fees and taxes.
This column appears Wednesdays in the Times Colonist newspaper.
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