All-time low for housing supply leads to record-high prices in Greater Victoria real estate market

All-time low for housing supply leads to record-high prices in Greater Victoria real estate market
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A lack of property listings in the month of August, combined with high demand, has led to record high-prices in Greater Victoria.

It’s a market so hot, that realtor Sophia Briggs from the Agency is doing showings for her clients from morning to night.

“You have to be doing it,” she said. “You can’t waste a minute in this market, there’s no time for it.”

The average price for a single-family home in the region hit a new record high last month at $1,224,438, up about 22 per cent from August 2020, according to the Victoria Real Estate Board.

Prices for condo apartments also rose to an average of $552,353, an increase of nearly 15 per cent.

Briggs gives all of her buyers the same advice: Looking for a new home is like a full-time job.

“You need to carve out time,” she said. “If a house comes up, we are going that night. You have to do your due diligence, you have to be ready.”

If you’re not on the ball, Briggs explained, the house may already have more appealing offers on the table. It all has to do with low supply.

“It’s concerning in the sense that we don’t have enough inventory for the number of people that would like to live in the Greater Victoria area,” said David Langlois, president of the Victoria Real Estate Board.

READ MORE: Victoria real estate hot as ever with sales nearly doubling from last year

In August 2020, there were 2,584 properties listed for sale. This year, that number dropped by more than half (56.7 per cent) to 1,120.

“If we have very little inventory to choose from, there’s going to be significant competition for it so we’re going to see higher prices,” said Langlois.

The question then is why aren’t more property owners selling?

“What’s a seller going to do? What’s the attractive option?” said Tom Davidoff, director of the University of British Columbia (UBC) Centre for Urban Economics and Real Estate.

“Interest rates are low. A lot of the incumbent owners have low mortgage costs. They see home prices appreciating at a rate probably equal to their cost or greater of owner occupancy, so holding on as long as you’re able to is probably attractive to the large majority of potential sellers out there.”

Davidoff added the lack of supply and high prices are things that likely won’t change anytime soon.

“The best guess is tomorrow’s price is today’s price,” he said.

READ MORE: Buyers scrambling with Greater Victoria real estate inventory at 25-year low

Jasmine BalaJasmine Bala

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