A surge of out-of-town buyers contributed to another significant increase in local real estate sales in October.
According to new figures, 990 properties changed owners in the area covered by the Victoria Real Estate Board (VREB). This figure means October sales rose 60 per cent from the same period last year.
While sale figures for October were nearly identical for September when 989 properties sold, the additional sale puts October over the top as the best-selling month of the year, according to Leo Spalteholz, a real estate agent and analyst at househuntvictoria.ca.
“Sales normally decline in October, but this year they stayed high, ” he said. “In fact, October with 990 sales is the most sales we’ve had all year, which I hardly need to point out is highly unusual.”
Looking at specific categories of housing, sales of single-family homes (474) in Greater Victoria rose 70 per cent compared to last year, while condominium sales rose 71 per cent with townhouse sales up 67 per cent.
Spalteholz said the figures for October reflect pent up demand from locals in the spring. “But a big contributing factor is a resurgence in out-of-town buyers, that have all poured into single-family detached homes,” he said. Accordingly, the inventory of single-family homes remains “incredibly low” with prices “spiralling upwards.”
Spalteholz earlier pegged the number of out-of-town buyers at 25 per cent, “still shy of the recent peak in 2016” when buyers from the Lower Mainland surged into Greater Victoria.
“[But] it’s a big jump from the first half of the year and a stark reversal of a multi-year trend of declining buyer interest.”
Spalteholz also points to the interest in luxury properties. Through 2020, 130 houses over $2 million sold — that is more than the total number of sales in that category (123) from 2017 through 2019.
This said, Spalteholz warns of reading too much into the figures. So far, the region has experienced all the “positive impacts of the COVID recession drive the market with more out-of-town buyers and rock bottom rate,” he said.
“We shouldn’t extrapolate this market out too far because the negative parts of the impact are still coming and are longer acting.”
They include job losses among first-time buyers, business failures, increasing COVID-19 case counts rising mortgage delinquency rates in the near future. “Overall, the market is in a strong position to absorb a slowdown though,” he said.
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