Sales of apartment buildings in Victoria plunged nearly 50 per cent last year, but it could be due more to a lack of product than a cooling of demand.
For all of 2011, B.C.'s capital city saw just 12 rental apartment buildings sell, down from 22 a year earlier, while the total dollar volume dropped from $98.5 million to $46 million, reports Colliers International. This is down $10 million from the 10-year average.
The average price-per-suite of a rental building dipped moderately to $130,600.
"We are feeling the effects of a lack of available product for sale," Collier's Victoria office reports, noting there was also a lack of portfolio sales last year. Such sales accounted for half of all transactions in 2010.
Victoria's rental apartment vacancy rate is up slightly to 2.1 per cent, but remains close to the lowest among major Canadian cities.
The average capitalization rate for a Victoria apartment building is 4.7 per cent, Colliers estimates.
Colliers is forecasting steady sales of Victoria apartment buildings this year, but notes that low mortgage rates are the main market driver. With insurance through Canada Mortgage and Housing Corp., landlords can acquire 10-year mortgages at rates as low as 3.29 per cent.
