2015 was a big year for Victoria real estate. The pace of market improvement went on steadily in 2015, with annual sales to list moving up 10% from 55% to 65%. To put that into context, last time we saw the ratio this high was 2006.
After two years of steadily improving market conditions we hit a transition point and prices lurched upward to start the year. For the first time since 2010 we also drifted into hot market territory.
The increase in prices meant that the decline from peak chart is quickly becoming obsolete. Single family homes have regained their peak values at least in nominal terms. Townhouses aren’t far behind, and only condos are still significantly down at 7% below peak values.
Taking a look at affordability, the price gains in 2015 were tempered by a drop in the average 5 year mortgage rate, and some income gains. It took about the same percentage of the average income to pay the mortgage the average Victoria home this year as last. However it does appear we are rounding out a bottom here. It also seems that each bottom comes in higher than the one before (grey line), which makes some sense, given that in a densifying city, detached homes will become less affordable over time as they are replaced with condos.
What does 2016 have in store for us? Well we’ll be reviewing our 2015 predictions in a couple weeks (hint: we all sucked) but I suspect it’s going to be a lively one for the Victoria market.
Marko’s Monday stats update also indicates December numbers will be better than expected.
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