Rising interest rates expected to lead to Victoria housing market correction
Three new townhomes on Nelson Street in Esquimalt, B.C., are weeks away from hitting the market. The question for the developer is – how will they be priced?
"The market is changing, we are feeling it," said Xeniya Vins, who is developing the properties.
Victoria home sellers have banked on a frenzied market for years. Prices have continued to climb and multiple offers generally come in for properties, many times without conditions.
However, that is all about to change as the market is expected to make a course correction, according to a new Royal Bank of Canada report.
"In the last few months it’s been like someone has turned off the taps in terms of sales," said Marko Juras, a realtor with Fair Realty.
In Victoria, sales are running at a 20-year low month over month.
Meanwhile, condo prices have fallen six to eight per cent since the peak in March.
"Single family homes, depending on the price range, are down anywhere from eight to 13 per cent,” said Juras.
The realtor says a market correction is taking place and motivated sellers need to list their homes to reflect that new reality.
(File Photo)
BUYING POWER
On the surface that sounds like good news for buyers, but don’t forget those rising interest rates.
"I think when we first got pre-approved we were around two to two-and-a-half per cent," said Caycy Fedberg who is currently renting in Langford, B.C.
"Now it’s up to upwards of four," he said. "That has definitely softened our buying power.”
Fedberg and his girlfriend have been house shopping for the past two years. When rates were low they qualified for around $800,000. Now they are qualifying for $650,000.
"It’s kind of like a wait and see game, and I feel from a buyer perspective you always have to be looking and be ready with a realtor to go," said Fedberg.
Back in Esquimalt, the developer of those new townhouses is optimistic that they will sell, just maybe not in the same way they would have four months ago.
"We probably would have been better off price-wise if we did pre-sell," said Vins.
Due to an ongoing labour shortage in the trades, however, the developer decided to not take that chance in case there were construction delays.
"I think price-wise, it will be going in at pretty much the same price point but we’re maybe not looking at multiple offers anymore," said Vins.
CTVNews.ca Top Stories
Canada's most wanted fugitive arrested in P.E.I. in connection with Toronto homicide
A suspect in a fatal shooting in Toronto’s east end last summer has been arrested in Charlottetown, just one week after he topped a list of Canada’s most wanted fugitives.
BREAKING Federal employees will be required to spend 3 days a week in the office
Starting in September, public servants in the core public administration will be required to work in the office a minimum of three days a week. The Treasury Board Secretariat says executives will need to be in the office four days per week.
Concerns about plexiglass prompt inspections at some Loblaws locations in Ottawa
Inspections are underway at more than one Loblaws location in Ottawa after complaints were filed about tall plexiglass barriers.
OPP officer said 'someone's going to get hurt' before wrong-way Hwy. 401 crash
As multiple Durham police cruisers were chasing a robbery suspect on the wrong side of Highway 401 Monday night, an Ontario Provincial Police officer shared his concerns, telling a dispatcher, "Someone's going to get hurt."
Poilievre unrepentant over calling Trudeau 'wacko' as his MPs say Speaker should resign
An unrepentant Pierre Poilievre returned to the House of Commons on Wednesday to pepper the prime minister about his drug decriminalization policies after being booted the day prior for refusing to take back calling Justin Trudeau 'wacko' over his approach to the issue.
Five human skeletons, missing hands and feet, found outside house of Nazi leader Hermann Göring
Archeologists have unearthed the skeletons of five people, missing their hands and feet, at a former Nazi military base in Poland.
Toddler of Phoenix first responder dies after bounce house goes airborne
A two-year-old child died after a strong gust of wind sent the bounce house he was in airborne and into a neighbouring lot in central Arizona, the Pinal County Sheriff's Office said.
Plane overshoots runway at airport in St. John's, N.L., no injuries reported
Investigators from the Transportation Safety Board of Canada are headed to St. John's, N.L., after a plane overshot a runway at the city's airport this afternoon.
A teen was found buried in a basement in New York. An engraved ring helped police learn her identity two decades later
For more than two decades, the unknown victim was nicknamed "Midtown Jane Doe" because she was found in the Hell's Kitchen neighbourhood of New York City. But this week, investigators finally revealed her identity.