Market Statistics - May 2020

 

The month of May brought considerably more activity compared to a justifiably quiet April. Because of the sparse selection, the smaller number of buyers in the marketplace were still competing over the best listings which helped to keep the prices high.

During the pandemic, sellers had the difficult choice of whether they wanted to open their doors to the public and wondered whether there were enough buyers looking at that time to bring them a good offer. On the buyer's side, they had to adjust to new procedures and adjustments to showing protocols such as wearing masks and gloves, and having someone else open all the doors and closets that they wanted to see into. 

We anticipate that with the relaxation of pandemic restrictions, there will be more properties newly listed in June and possibly throughout the summer. It is primed to be a busy season for property sales as there is lots of pent-up demand on both the buyers and sellers sides. Mortgage brokers were warning us that there has been a surge in the number of pre-approvals recently, which has been fueled by historically low-interest rates and the threat of new lending rules from CMHC (Canada Mortgage and Housing Corporation).

As mentioned above, first time home buyers and the sellers of "starter properties" should be aware of mortgage lending changes taking effect on July 1st. CMHC is a primary provider for insured mortgages. Insured mortgages are mortgages on the property purchased with less than 20% downpayment.

Some of the major changes in the new CMHC insurance rules are:
- The requirement of a minimum credit score of 680 instead of the current 600

- A new limit of total gross debt servicing (GDS) ratios to its new standard requirement of 35% of annual income, compared with a current threshold of 39%, and total debt (TDS) servicing to 42% versus 44% now.

These changes will effectively lower purchasing power for any buyer who does not have 20% down.

 

On the positive side, however, let's not forget that the COVID event did lead to a drop in both fixed-rate and variable-rate mortgages that has helped a buyers' ability to borrow. This has made many people sitting on the sidelines decide to participate in the market.

 

VICTORIA REAL ESTATE BOARD
A total of 457 properties sold in the Victoria Real Estate Board region this May, 46.1% fewer than the 848 properties sold in May 2019 but 59.2% more than the previous month of April 2020. Sales of condominiums were down 55.7% from May 2019 with 108 units sold. Sales of single-family homes were down 42.9% from May 2019 with 254 sold. There were 2,544 active listings for sale on the Victoria Real Estate Board MLS at the end of May 2020, 15.7% fewer properties than the total available at the end of May 2019 but a 10.4% increase from the 2,305 active listings for sale at the end of April 2020.
  

The Stats Centre Reports for the REBGV for May are available now on our website at this link under "BLOG AND STATS" .  The Stats Centre Reports are automatically updated every month on our website as they become available. LINK 

Note that you may have to refresh the screen a few times until all the reports come up. This is a problem with the Real Estate Board website.