As we work to ease out of the pandemic and return to our regular habits, the big question is whether we will see a return to a “more normal” real estate market after more than a year of rapidly growing prices amid a shortage of supply.
Looking back, we can see that the desire to spend more time at home caused increased interest in ownership of primary residences and of local vacation properties. Initially, the demand was focussed on single family homes but that has now spread to all market segments, with condos picking up steam as well after a soft patch last summer and fall.
Prices, and the number of properties sold, climbed rapidly with single family home values up more than 20% over the last 12 months - and still climbing. Our internal research tells us that the peak sales volume was likely early May. We normally see a reduced number of sales over the summer months, and we are seeing that this summer as well. However, with the number of available homes down by more than half from this time last year, the expectation is that prices will stay at record levels. So far, prices are continuing to climb in all market segments.
With local, national, and international travel starting up, the downtown condo market is likely the next to take off. With price appreciation of condos at less than half that of single-family homes over the last year, condos appear more and more to be a great buy. Our province’s excellent track record dealing with the pandemic is expected to drive further migration to our area, with many buyers choosing the easy lifestyle and walkability of our inner harbour district.
If you are waiting for prices to moderate before making a purchase, I’m not sure that I have good news for you. Over the last fifty years, the annual appreciation of property in Victoria has averaged more than 7% per year, way ahead of the rate of inflation. With our low inventory and highly desirable area, the post-pandemic desire to “make each day count” is likely to spur more interest in our region than we have seen in the past. The best advice may be to get the home that you want now, before everyone else arrives.
If you would like to discuss these ideas in more depth, please feel free to give Karl Leong or Mark Roozendaal a call. We are here to help you make sense of this changing market.
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