Market Dichotomy A strange new beast

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The outside influence on our real estate market continues to drive us into uncommon waters in Victoria. Historically speaking when a sales to active listings ratio sits below 14% we are in a buyer’s market with downward pressures on pricing, and when we’re sitting above 20% we’re in a seller’s market with upward pressure on pricing. Last month, April 2019, there were 696 sales with 2751 active listings, or a sales to active listings ratio of just over 25% and yet the benchmark price for single family homes in the Victoria Core dropped year over year but climbed very slightly month over month, while the condo benchmark rose again both month over month and year over year.

The new stress tests and mortgage rules continue to put pressure on the upper end of the market, meaning we’re likely to continue to see multiple offers and quick sales for “affordable” housing, while the middle to upper end of the market is showing signs of slowing. This will likely continue as the population of the region has grown by 10.9 per cent since 2011 while the number of housing units has not kept pace, with inventory increasing by only 9.8 per cent. The pressure at the bottom of the market combined with the slowing at the top is likely to have a compressing effect on prices. Perhaps we could apply this principle to the wealth discrepancy and reinvigorate the middle class...