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December 2023

The holiday season is rapidly approaching, and while it is a busy time of the year, it is also a great time to wind down, take some time off and to spend quality time with family and friends.
2023 has been dominated by local news stories and conversations centering around inflationary issues. Whether it be the high food and gas prices, high interest rates and mortgage payments, high rent and real estate prices, or the obscenely high-ticket prices for your favourite artists. The year 2023 has been full of eye-popping numbers and has been financially challenging for most Canadians.

However, fixed mortgage rates have come down recently, and there is talk of some interest rate cuts by the Bank of Canada in the spring and early summer of 2024. Inflation numbers are also expected to fall in 2024, so let’s hope the effect trickles down to lower prices in our day-to-day life. Locally, real estate prices are lower than 2022 peak numbers, and the current supply of listings is considered a more balanced market which should help to keep the Greater Victoria real estate market stable in 2024.

Have a wonderful holiday season, and a very happy and healthy New Year, and here’s to a great 2024!

Below are some of the statistics for November 2023

Listing Inventory:

There were 2,644 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of November 2023, a decrease of 4.1 % compared to the previous month of October and a 25.% increase from the 2,111 active listings for sale at the end of November 2022.

Sales:

A total of 394 properties sold in the Victoria Real Estate Board region this November, a 2.6 % increase from the 384 properties sold in November 2022 and a 3.2 % decrease from October 2023. Sales of condominiums were down 11.8 % from November 2022 with 120 units sold. Sales of single family homes increased by 6 % from November 2022 with 193 sold.

Average Prices:

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in November 2022 was $1,248,600. The benchmark value for the same home in November 2023 increased by 3 % to $1,286,400, which is down from October’s value of $1,305,900. The MLS® HPI benchmark value for a condominium in the Victoria Core area in November 2022 was $568,400, while the benchmark value for the same condominium in November 2023 increased by 1.6 % to $577,400, which is down from the October value of $585,600.

If you or any of your family or friends require any real estate related information, feel free to contact Dale at 250-744-0844, or email him through his website: www.dalesheppard.com

The information contained in this blog is for general information purposes only. The information is provided by Dale Sheppard and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this blog.

The post Victoria Real Estate Market Update-December 2023 appeared first on Dale Sheppard.

MARCH 2019 Blog:

The weather is finally improving in Victoria and the flowers are now starting to bloom. Most of February was snowy and cold, but the temperatures over the last week have improved greatly, leading to an increase in activity in the real estate market which should result in higher sales over the course of this month. The overall year to date sales volume is still down considerably compared to last year, but prices are holding steady. Open houses were very busy this past weekend, and the market should pick up now that the weather is improving.
The Canadian news headlines however have been quite negative over the past month. The Canadian economy has ground to a halt as far as GDP growth, and the stress test for Mortgage approvals has dampened real estate sales and contributed to lower prices across Canada. The BC Governments tax initiatives over the last 18 months have also contributed to bringing Vancouver and the Lower Mainland’s market to a screaming halt with sales down to their lowest level since 1985! Prices are down 30% in some regions.

The local Victoria market is not as bad as some other regions in Canada. Sales are down and prices have dropped slightly on upper end properties, with average prices down about 5% over the last 6 months, but over all, the lower end is doing fine, with sales and prices remaining stable. Lower interest rates are also expected in the coming months, which will help keep the market moving in a positive direction into the Spring and summer. Here are some of the statistics for February, 2019:

Listing Inventory:
There were 2,131 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of February, 2019, a 38 per cent increase from the 1,545 active listings for sale at the end of February 2018, but only 3.6% higher than last month. While significantly higher than a year ago, the current levels are on par with the 10 year average, which should result in a continued balanced market for buyers and sellers throughout most of this year.

Sales:
A total of only 421 properties sold in the Greater Victoria region this February, which was 22.8 per cent fewer than the 545 properties that sold in February 2018. Sales of single family homes were down 15.8% from February 2018 with 219 homes sold. Sales of condominiums were down 25.9% from last year with 129 units sold this past month, but the total was higher than January 2019. Overall sales numbers should start to improve this spring, but the overall numbers will remain lower than 2018.

Average Prices:
Currently, the average price for a Single Family home in Victoria is sitting at $845,900, down slightly from the average price of $847,800 at the end of January, 2019. However, overall prices are down by about 5% from the peak high in the summer of 2018. Average condo prices are sitting at $502,800, slightly higher than a year ago which was $483,700. While these condo prices are slightly higher than one year ago, they have not changed much in the last 6 months and should remain relatively unchanged in the coming months.

Have a great rest of your week. If you or any of your family or friends require any real estate related information, feel free to contact Dale at 250-744-0844, or email him through his website: www.dalesheppard.com or direct at 250-744-0844. I look forward to hearing from you soon.

Check out the Latest Greater Victoria Statistics: www.dalesheppard.com/resources

Click here for List of Upcoming Open Houses in Greater Victoria

 Interesting programs for you first time buyers

To help make homeownership more affordable for first-time home buyers, Budget 2019 introduces the First-Time Home Buyer Incentive.

• The Incentive would allow eligible first-time home buyers who have the minimum down payment for an insured mortgage to apply to finance a portion of their home purchase through a shared equity mortgage with Canada Mortgage and Housing Corporation (CMHC).
• It is expected that approximately 100,000 first-time home buyers would be able to benefit from the Incentive over the next three years.
• Since no ongoing payments would be required with the Incentive, Canadian families would have lower monthly mortgage payments. For example, if a borrower purchases a new $400,000 home with a 5 per cent down payment and a 10 per cent CMHC shared equity mortgage ($40,000), the borrower’s total mortgage size would be reduced from $380,000 to $340,000, reducing the borrower’s monthly mortgage costs by as much as $228 per month. Terms and conditions for the First-Time Home Buyer Incentive would be released by CMHC.
• CMHC would offer qualified first-time home buyers a 10 per cent shared equity mortgage for a newly constructed home or a 5 per cent shared equity mortgage for an existing home. This larger shared equity mortgage for newly constructed homes could help encourage the home construction needed to address some of the housing supply shortages in Canada, particularly in our largest cities.
• The First-Time Home Buyer Incentive would include eligibility criteria to ensure that the program helps those with legitimate needs while ensuring that participants are able to afford the homes they purchase. The Incentive would be available to first-time home buyers with household incomes under $120,000 per year. At the same time, participants’ insured mortgage and the Incentive amount cannot be greater than four times the participants’ annual household incomes.

Budget 2019 also proposes to increase the Home Buyers’ Plan withdrawal limit from $25,000 to $35,000, providing first-time home buyers with greater access to their Registered Retirement Savings Plan savings to buy a home.

The budget also includes a focus on strengthening rules and compliance and INCREASING supply through partnerships and targeted investments.

Review the entire budget here

Review the complete Housing overview here

The post Victoria Real Estate Market Update – March 2019 appeared first on Dale Sheppard.

The Victoria real estate market is undergoing a slight change as the strong market continues into the fall. The average prices appear to have hit a peak as this summer experienced a small price drop for the first time in almost 2 years. The overall listing inventory has increased slightly in September compared to the previous month, when normally the inventory would decrease month to month until the end of the year. With the new mortgage rules announced today, and the potential increase in interest rates later this year, the result might be a more balanced market in 2018, and a slow down and possible decrease in prices into 2018.

The new mortgage rules “Stress Test” announced today, which are due to start on January 1, 2018, will have an effect of creating a short term buying spree between now and the end of December, as buyers that will lose some purchasing power with a lower mortgage qualification in January will need to make their home purchase prior to the new rules kicking in. This should create a busy fall market in Victoria, which is great if you are a seller. However, once the rules are enacted in the new year, the market may slow down and the result could be lower prices in 2018. Either way, it appears that the market frenzy of 2016 and parts of 2017 is winding down, and a more balanced market will be the result in 2018, which would be the desired outcome from these government changes.

The other factor to watch for is the Federal Governments policy on interest rates. Most are predicting another increase at the end of this year, and possibly another round of increases in 2018. This, coupled with the new mortgage rules announced today, could also create additional slow downs to the market in Victoria and across Canada into 2018. The proposed mortgage “Stress Test” will make it much harder for buyers to qualify for a mortgage at the amount they require to purchase in our high priced market in Victoria, as this new rule will lower the amount of a mortgage that a buyer can obtain. If a buyer is seeking a mortgage, and they have 20% or more down payment, they will now have to qualify at the greater of either 2% above the current best 5 year mortgage rate, or at the current 5 year posted bank rate. In other words, if the best 5 year rate is at 3.2%, and the posted rate is at 4.9%, then the buyer would have to qualify at 5.2%, even though they will still get the mortgage at 3.2%. These mortgage changes alone might produce a further slow down by yearend and into 2018.

Also, monthly sales have been lower in 2017 compared to 2016, so the potential for increased listing inventory is inevitable, further creating a market slowdown, with a more balanced market for buyers and sellers. This is actually a good thing. A lot of buyers have been frustrated with the lack of homes to view, and the panic to submit an offer right away, which has resulted in a lot of buyers staying out of the market for the time being. More listing inventory would bring these buyers back and keep the market moving at a good pace. This would also be good for sellers that want to repurchase in the same market.

Overall, the market should remain strong, but these above factors will definitely bring some changes to the overall market conditions, and the return to a more balanced market is most likely on its way. It is always hard to predict the future of the real estate markets, and even harder when the government enacts rules to alter the course of the market. It will be interesting to see what 2018 brings.

Here are a few links to various real estate sources that may be of interest to you:

1. Up-to-date real estate information on my Facebook page: VictoriaBCProperties

2. Latest Website Newsletter: Newsletter

3. Latest historical statistics from the Victoria Real Estate Board: VREBStatistics

4. Search for Victoria Properties at my website: www.DaleSheppard.com

Have a great rest of the year and I will touch base again in early 2018.

The post Victoria Real Estate Market Update – Fall 2017 appeared first on Dale Sheppard.

The Victoria real estate market is experiencing a surge that has not been experienced since the start of 2010. We have had a large increase in the number of sales this year, and a definite firming up of pricing. In some areas, there has been an increase in the number of homes selling above their list prices. Also, the inventory of homes for sale is much lower this year than the previous two years, which is helping sellers to obtain a successful sale in a shorter period of time. These factors are resulting in a strong spring market which should continue throughout this year.

The current record low interest rates are another significant factor positively affecting the real estate market. Not only are first time buyers benefitting, but those looking to re-finance or move up or downsize are all able to take advantage of the low monthly payments on a new mortgage. With the Bank of Canada holding firm on their commitment to keep inflation at bay, the result has been a rate hold that is poised to continue through the remainder of this year, with the possibility of a further .25% drop should the oil prices or Canadian dollar change significantly in the direction that will affect the Bank of Canada’s target 2% inflation rate. The end result for consumers is that the banks are not feeling any pressures to increase mortgage rates any time soon, which is good news for the local Victoria real estate market. As of today, some banks are offering fixed 5 year mortgages for 2.59%. These rates are extremely low, so it will be interesting to see how long they last. Most forecasters are predicting well into 2016.

Have prices bottomed out in Victoria, and are we now in for price increases? Time will tell. The significant increase in sales this year, combined with lower listing inventory, will eventually lead to an increase in prices. Some areas are experiencing this now. If the current level of activity continues throughout this year, then yes, I think we will see a higher priced market later this year, or into 2016. That means that the year 2015 might well be the year that everyone wished they had jumped into the real estate market in Victoria. We will see…

In the meantime, here are a few links to various real estate sources that may be of interest to you:

1. Click on this link and hit “Like” to obtain current postings from my real estate Facebook page: VictoriaBCProperties

2. Click this link for my latest Website Newsletter: Newsletter

3. For the latest historical statistics from the Victoria Real Estate Board, click here: VREBStatistics

4. Search for listing at my Victoria BC Properties website: DaleSheppard.com

All the best to you and your family.

Dale.

The post Victoria Real Estate Market Update – Spring 2015 appeared first on Dale Sheppard.

Unlike Vancouver with their souring prices, increased sales and increased building starts, Victoria is still lagging behind like most cities across Canada. Victoria had a small increase in sales in March, but still trails the 5 year average. Listing inventory has dropped slightly, but still only 1 in 8 homes are selling per month. Overall prices are down as well, but in most regions, the drops have been significantly higher than the statistics are showing. The saving grace so far has been continued low interest rates, combined with these lower prices, creating a fairly stable Victoria real estate market over the last few years.

When will the next upswing begin in Victoria? This is a good question. Sales should continue to increase this spring and prices will probably stay fairly stable, and the market will not change much in the coming months unless we see a significant reduction in the overall listing inventory this summer. If inventory remains high, which it probably will, then the market should remain the same for the rest of 2014 and into 2015. If listing inventories are significantly lower in the summer and fall, then the result could be a shift away from a buyer’s market towards a seller’s market, which usually creates the supply demand ratio for prices to slowly start increasing. And if sales also increase, then this supply demand effect always creates further upward pressures on pricing. Eventually this will happen, and the big question is still when. Most experts are not expecting this to begin in our region until 2015 or even as far out as early 2016. We will see. However, when it happens, it usually happens fast. In the meantime, there are still a lot of good real estate deals in Victoria.

This leads me to one investment scenario. There are some really good deals in the market if you are looking for a revenue property. I will give you an example of a condo that I currently have listed for sale on Bear Mountain. It is a small 1 bedroom listed for $176,800. As an investment property, you would need the required 20% down for a second property, as this is required if the purchase is not your principle residence. This would equate to about $35,000 down, plus about $5000 for closing costs. The mortgage would be about $140,000, and the monthly payment would be about $588 if you obtained a mortgage for 2.99% for a 5 year term, with a 30 year amortization period. The strata fees are $168 per month, and insurance is about $40 per month, and taxes are about $75 per month, for a total of about $870 per month. This condo rents right now for $900 per month. Based on these numbers, this condo would actually provide a small positive return, coupled with the fact that you have a tenant paying down your mortgage each month which lowers your principal amount owing on your mortgage. As a bonus, if real estate prices increase, you are further building your cash equity in your condo which leads to a substantial equity portfolio increase over the course of the 5 year mortgage term. This investment condo would actually work. There are a number of examples like this throughout Victoria, and it has been years since you could buy a property and not have a negative cash flow on a monthly basis, so this is a good thing.

However, low prices and low interest rates will not last, as history usually repeats itself, and during the course of a natural economic cycle, which usually lasts about 7-8 years, the markets usually turn in one direction or another. And as most experts are predicting we are slowly moving towards the end of the current slowdown which started in the summer of 2008, the next upturn could be arriving sooner than later. The US economy is showing improved numbers not seen since 2008, so this usually results in a positive spin for the Canadian economy as well. Once this begins, interest rates and prices usually start to increase, and the investment property example above would immediately have a negative monthly cash flow. For example, an increase in interest rates of .50 percent alone would increase the monthly mortgage payment in the above example to about $628, which is an extra $40 per month, which turns the above scenario into a monthly negative cash flow of about $10 per month. If prices go up 5%, the same happens above. These interest rate changes can happen overnight, and the price increase can also happen quickly once the market starts improving.

Having said all of the above, I think we are still about a year or so away from seeing interest rate or price increases, so there is still a good window of opportunity for real estate deals to be made. Again, we will see…

In the meantime, here a few few links to various real estate sources that may be of interest to you:

– To stay informed on my listings and local real estate information, click on this link and hit “like”: VictoriaBCProperties

– Click for details of my Spring Newsletter:  Newsletter

– For the latest historical statistics from the Victoria Real Estate Board, click here: VREBStatistics

– Search for listing at my Victoria BC Properties website: DaleSheppard.com

Have a great Spring and I will be in touch this summer for another update.

Dale.

The post Positive Cash Flow on an Investment Property appeared first on Dale Sheppard.

It appears that the current Victoria real estate market is in a stalemate. The number of listings remains at about 5000, while the number of sales per month averages about 500. This equates to about 1 in 10 homes selling on a monthly basis. This makes it very difficult for sellers who want to make a move now, especially when there is a slight downward pressure on prices, fewer buyers looking, and even fewer writing offers to purchase. This is likely a result of the recent tightening of lending rules by the Federal government, plus negative media posts and discussions amongst friends and family about prices continuing to go down. This, coupled with interest rates remaining at near record lows, leaves no reason for these buyers to jump in at the moment. Even if they do want to buy now, most need to sell their homes first, and once they list, they then become these same sellers, and are put in the same tough predicament of trying to sell their homes first.  In other words, a real estate stalemate occurs.

On the bright side, my experience has shown that a seller can still make a move in this slow market, and not lose out on their future home equity gain, as long as they are repurchasing in this same market.  These sellers must price their homes very sharply to obtain a sale, but the lower selling price will be recouped by the gains made on their purchase. In other words – sell low, buy low. Or, if you wait for the market to go up, you will then have to pay more for your new home, and the gain is usually negated.

There is also good news for buyers that buy now. The gains you might make by gambling on prices dropping further will most likely be offset by two significant scenarios:  1. Owning now means not paying rent to a landlord, and paying off your mortgage equates to building equity in your home now rather than down the road. 2. Your mortgage payments will likely be lower now than in the not too distant future, because the current interest rates are at near record lows, and most are predicting they will rise once the Canadian economy starts improving. And rates tend to go up faster than they come down!

Predicting the exact timing of the market turnaround is not something we can do, or we would all be rich. Usually it takes something significant to trigger a change in the market, like a large increase in interest rates, or a quick turn around on pricing, or global market booms, which usually sparks a buyer frenzy that eventually leads to a lack of housing inventory and to an eventual increase in prices. Most analysts are predicting that we are a ways off from this turning point, and that more of the same will likely continue for another couple of years. This stalemate will not last forever, but while it is here, all we can do is try to make the best of it.

Click here for the latest Victoria Real Estate Statistics: https://www.dalesheppard.com/market.php

Click here for my latest Real Estate Fall Newsletter: https://www.dalesheppard.com/newsletter/Newsletter_Fall_2012.pdf

For more information about Dale Sheppard, visit: www.dalesheppard.com

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