Scott Loughton Real Estate & Development
3914 Shelbourne St V8P 4J1 Victoria, BC, Canada

Victoria real estate market continues to experience strong demand, low supply A total of 795 properties sold in the Victoria Real Estate Board region this November, 37.8 per cent more than the 577 properties sold in November 2019 but 19.7 per cent fewer than the previous month of October 2020. Sales of condominiums were up 62.7 per cent from November 2019 with 262 units sold. Sales of single family homes were up 21.8 per cent from November 2019 with 375 sold. Once again, we’...ve tracked an unexpectedly busy month for the Victoria area real estate market, said Victoria Real Estate Board President Sandi-Jo Ayers. With near 800 total sales last month, we came close to the record for sales in a November - which was 892 sales in 1989." There were 1,813 active listings for sale on the Victoria Real Estate Board Multiple Listing Service at the end of November 2020, 24.4 per cent fewer properties than the total available at the end of November 2019 and a 14.6 per cent decrease from the 2,122 active listings for sale at the end of October 2020. I expect the question on most people’s minds is how long does this last, and is this sustainable, adds Ayers. The fact is, the market has out performed anyone’s expectations in the midst of this pandemic. There is a chance we will see a slow leveling of activity over the winter which is what we would expect seasonally. However, because of our consistently low inventory, pressure on pricing and multiple offer situations will likely continue as we remain in a demand-heavy environment. The Multiple Listing Service Home Price Index benchmark value for a single family home in the Victoria Core in November 2019 was $857,600. The benchmark value for the same home in November 2020 increased by 5.3 per cent to $903,100, a 2.7 per cent increase from the previous month of October. The MLS HPI benchmark value for a condominium in the Victoria Core in November 2019 was $517,400, while the benchmark for the same condominium in November 2020 remained close to last year’s value at $516,600, a 0.2 per cent fluctuation.

The BCREA Commercial Leading Indicator (CLI) rebounded in the third quarter of 2020 from 122.3 to 136.9, representing the first increase after four consecutive quarterly declines. It was the largest increase in the indicator since the start of the CLI series in 1999, reflecting a recovery from a significant drop in the first half of 2020, due to strict COVID-19 containment measures. Compared to the same time last year, the index was up by 1.3 per cent. The third quarter of 20...20 saw the resurgence of key economic industries in BC, particularly the hard-hit retail sector, as brick-and-mortar stores reopened and travel restrictions in the province were eased. Employment in key real estate sectors and manufacturing also rebounded in the third quarter, while the financial component of the CLI declined. Although the CLI posted a strong recovery in the third quarter of 2020, this is not necessarily reflective of actual commercial real estate conditions, where a rebound in retail sales and employment would normally imply a rebound in retail and office space. The realities of the COVID-19 pandemic are currently driving a wedge between what we see in the data and what is being experienced on the ground. BC’s economy reopened in the third quarter of 2020 after it was halted in the previous quarter by COVID-19 containment measures. Manufacturing sales were boosted by strong demand for wood products supplying robust activity in new home construction in Canada and the US. The increase in wholesale trade was driven by higher sales in motor vehicles and building materials, as many households undertook home renovations during this period. Retail sales also pulled ahead in the third quarter, increasing by 16.3 per cent, representing the largest quarterly growth since the start of the CLI series in 1999. Employment growth in key commercial real estate sectors such as finance, insurance, real estate and leasing was up by about 15,000 jobs, recouping all losses reported in the first half of 2020. Manufacturing employment was also up by 12,500, nearly eclipsing job losses that started in the third quarter of 2019. The CLI’s financial component was negative in the third quarter of 2020, as a fall in REIT prices more than overcame the impact of a reduction in risk spreads due to the Bank of Canada’s actions to provide liquidity in short-term credit markets.

Canadian Inflation (Oct) - November 18, 2020 Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.7% in October year-over-year, up from the previous month's increase of 0.5%. Excluding gasoline, the CPI rose by 1.1%. Prices rose in five of eight components year-over-year in October, with food contributing the most to the increase due to rising prices for lettuce as a result of disease and inclement weather. Growth in the Bank of Canada's three measures ...of trend inflation rose by 0.1 percentage points in October, averaging 1.8%. Regionally, the CPI was positive in all provinces. In BC, CPI rose by 0.5% in October year-over-year, up from September's increase of 0.4%. Strong price growth continued for health and personal care (3.1%), shelter (2.2%), and food (2.0%). In contrast, downward price pressures were ongoing in gas (-18.0%), clothing and footwear (-3.8%), and transportation (-1.7%). Costs for shelter continue to increase, as record-low interest rates put downward pressure on mortgage costs. This has made single-family homes more attractive to households demanding more space. As provinces such as Ontario and Quebec expand their containment measures, and with new restrictions in BC, Canadian inflation is expected to remain subdued. In this environment, the Bank of Canada will continue to keep interest rates low. Link: https://mailchi.mp//canadian-inflation-oct-november-18-2020

BCREA Market Update November 2020