Karen Dinnie-Smyth, President of the Victoria Real Estate Board shares the state of real estate in Victoria for 2021 and makes predictions of trends in 2022.
Paulette Marsollier introduced Karen Dinnie-Smyth. Karen has been an award winning real estate agent for over 25 years. She currently works with RE/Max Camosun and is the President of the Victoria Real Estate Board (VREB). Her detailed bio is at https://harboursiderotary.org/Speakers/320c1b58-f849-4fc2-9bc0-5797b71f44d2
Karen Dinnie-Smyth
VREB has been serving Members since 1921. My focus today is a local real estate market overview and consideration of how we make more homes available to avoid the demand/supply crunch in the market. The VREB predictions for 2021 were highly accurate – a tight market, government intervention, interest rate increases…
Current conditions – Total properties sold in 2021 around 10,000. Active listings in Dec 2021 about 400 – very low. Total Listings and sales for Dec 2021 is similar to Dec 2019. Home price index for single family homes: Dec 2019 $863,900, Dec 2020 $915k, Dec 2021 up 25% to $1,144,900. The new CMHC mortgage rules and speculation tax did not cool market. Single family home price index showed increases ranging 25-34.4% across local areas. In the condo market price index, less inflation: Dec 2019 $466,700, Dec 2020 $487,100 and Dec 2021 $570,600. Condo price increases ranged from 14.8-20.7% across local areas. Recall in 1989 Vanderzan decided market was inflated and brought in property purchase tax which also did not cool the market, so it appears that such interventions are not effective.
Where are the sales? Everywhere especially Langford, Saanich East (building growth), Sooke, Vic West. Malahat is increasing. Shawnigan Lake is also growing, so sales are increasing. Condo sales are increasing in Langford, Saanich East and Vic West.
Who is buying? BC 65.64%, Elsewhere in Canada 31.16% and outside Canada 3.6%. Pandemic has reduced buyers from outside of Canada.
Most prevalent motivators to buy is relocation 14%, and buying an investment property 9%.
Market predictions for 2022 – demand/supply conditions continue. Government intervention will happen. Interest rates are predicted to increase though some economists say they can’t, and cost pressures on development will continue/increase.
Q&A
Q - With that spike on East Saanich, is that taking up agricultural land? A - lots of protected land out there. They are demolishing homes and doing gentle densification.
Q -To what degree are ponderous procedures at city hall limiting building? A- In Canadian market we are 1.4m homes short for requirements. If it takes years to put something through Council, it puts pressure on builders and needs to be addressed. We are advocating for efficiency. Saanich has changed procedures. Provincial government may mandate certain requirements.
Q – understand Provincial government is taking serious look at stopping blind bidding. Can VREB do anything to convince government to be hands off since prior efforts did not cool market? A – Finance Minister stated they would intervene so likely fait accompli. There is discussion of blind bidding and cooling off period (which affects the sellers more). VREB preferring a mandatory listing period since it impacts buyers and sellers equally.
Q – In Iran, to increase supply and force prices down, contractors worked with government to build mass homes (eg 1000 condos). Why do we not do that in Canada? A: Process for building – official community plans – have to balance interests – we like our status quo and privacy and change is slow. Unfortunately, slow is not good in this situation.
Q – I read that total municipal take from a single condo is quite high when considering approvals and taxes. Are the municipalities filling their pockets? A – I don’t work with developers enough to answer, but with single family home building – the fees and timeline for approvals is onerous.
Q – I heard of a community banning single family neighbourhoods. Is that a strategy? A – I was talking to a student from Milan living in condo with family of 4 and seeing this as a trend in Europe, but not seeing that here.
Q – We bear responsibility as communities – in my neighbourhood there was a reasonable development plan and the neighbours were so difficult, the developer walked away and it was vacant for years. A – examples of that elsewhere. In one case Prov government bought the land and put low income housing on it, as they are not subject to the same consultation process and the neighbours are more upset.
Q – I tried to get affordable housing built in Oak Bay. One builder said GVA is one of the worst areas in Canada to get anything done – both from a neighbour response perspective and government engagement.
Q - Can you talk about future trends in how real estate is bought and sold in the future? E.g Zillo, Redfin. A – Zillo has not worked. Redbrick is trying to come in. That is consumer choice and we are not seeing acceptance of those programs in the GVA market. Not seeing enough of a trend in that market to start talking about it.