There were 4,273 housing starts in the Victoria market in 2018 but that level is not expected to be repeated in 2019.
The Victoria Real Estate Board’s Crystal Ball Housing Forecast says that there are signs of moderation in the market, despite all the elements needed for a healthy housing market – strong economy, low unemployment, still-low interest rates.
Listings historically have averaged 2,757 but in December there were 1,988. This was 46.3% more than a year earlier and VREB says the market is moving towards more balanced conditions.
Sales in 2018 totaled 7,150, down from 8,994 in 2017. That 25% reduction is attributed to a large degree to the impact of mortgage stress tests effectively cutting buying power by 20%.
VREB says that the effects are hardest on young buyers and almost half of the housing starts were rentals to accommodate those would-be buyers who were priced out of the market.
Prices were up 3.2% year-over-year in December to a benchmark $858,600.
The board expects that there will be a spike in housing supply as new construction projects are completed while sales continue to decline amid affordability concerns and lower levels of immigration.
