Greater Victoria real estate market remains hot during pandemic
VICTORIA -- The numbers are out and Victoria real estate sales for August 2020 are 48 per cent higher than sales in August 2019.
The Victoria Real Estate Board (VREB) reports a total of 978 properties sold in the region last month compared to 661 sales in the same month in 2019.
“We’re seeing a lot of surprises in our market,” said Victoria Real Estate Board president Sandi-Jo Ayers. “We’re seeing this huge amount of activity, especially in single-family units.”
The benchmark value for a single-family home also rose this August to $889,200, up from $849,500 in August 2019, though the value did slip from a reported $909,700 in July 2020.
When the real estate industry was brought to a halt in March due to COVID-19, home sales in the region plummeted to an all-time low. As a result, the traditional rush in the market to purchase a home may have been delayed to the summer months.
But pent up demand isn’t the only factor leading to increased sales numbers.
“Probably the number one factor fuelling the market is very low interest rates,” said Victoria realtor Marko Juras.
“The demand for single-family homes that are liveable, with a common sense layout and decor is just through the roof,” he said.
One local mortgage broker says a reduction in the benchmark interest rate has boosted people’s buying power by approximately five per cent. He says the additional borrowing room that prospective buyers now have is matched by the actual cost of borrowing, which has dropped as much as 10 per cent.
“That means for the average buyer earning $100,000 a year, with no other debts and assuming a 20 per cent down payment, they will be able to afford a $595,000 mortgage today,” said mortgage broker Mike Grace. “That’s opposed to a $569,000 mortgage in January.”
Juras says along with demand, one of the factors that may be keeping prices high is that inventory continues to remain low for single-family homes. With more people staying inside during the pandemic, buyers may also be more aware of the space they live in and what they want in a home.
“Maybe people are starting a family and they want to move from a condo to a single-family home,” added Juras.
The question remains, with interest rates and inventory remaining low, coupled with high demand, will the Greater Victoria real estate market still be super heated in the fall of 2020?
“I wish I could give you what it’s going to be like, but we have no idea,” said Ayers. “Tomorrow it could all change.”