Market Insight Series

What does the current Victoria real estate market look like?

As part of our monthly Market Insight Series, I am excited to continue to bring you regular insights into Victoria and Vancouver Island market trends, so you can make better buying and selling decisions. Below I will jump into the most important market numbers to look into, I will provide glossary term definitions, and will conclude with resources if you want to further research current trends and stats. If you want to see what the Market Insight for the previous month was click here.

Hey folks, let's break down some numbers in the Victoria Real Estate scene. In May 2024, we saw a total of 763 properties changing hands. Now, while that's 1.5% less than what we saw in May 2023 it's also a whopping 12.5% jump from April 2024.

Condos? Yeah, they took a little dip, down by 5.2% compared to last May, with 235 units sold. But hey, single-family homes, they held steady, matching the numbers from May 2023 with 399 sold.

Now, Springtime in Victoria usually screams real estate frenzy. Laurie Lidstone, the Victoria Real Estate Board Chair, puts it nicely, saying May is when we're usually peaking in activity. And guess what? May 2024 was another good month! More inventory means more choices for buyers, and less pressure on prices, keeping them fairly flat. However, don't expect that to last for long. Prices saw another month over month gain for most property types in most areas. Except for condos in the Saanich peninsula, the price of everything else crept up with increases ranging from 0.2% - 1.5%.

Talking numbers, we had 3,338 active listings by the end of May 2024, up by 10.6% from April and a whopping 52.5% jump from May 2023. Chair Lidstone, she's pretty stoked, calling this a positive change after years of navigating an unbalanced market.

And here's the kicker, the benchmark value for a single-family home in the Victoria Core rose by 0.7% from May 2023 to May 2024, hitting $1,309,700. Condos? They're on the rise too, up by 1.2% to $569,500.

So, where is this all heading? Well, as we've mentioned before, most forecasts are predicting a rise in prices and competition as we move toward the end of the year. So far, we seem to be heading in the right direction, and it's entirely possible that the bottom of the market has already been set.

To support our positive forecast, the Bank of Canada (BoC) has now announced its first interest rate cut in a long time. Many market analysts have been anticipating this cut for most of 2024. This response seemed likely due in part to an inflation rate that's nearing the 2% target rate (2.69%) and a weakening Canadian economy which will soon need some fiscal relief.

Now that the first BoC interest cut has occurred it will slowly begin to fuel more competition by encouraging more consumers begin to leave the side lines and start looking for a home. More competition means more demand, and more demand should push prices higher if inventory remains steady or continues to decline. Although our handy absorption rate hasn't seen any change in the last few months, our months of inventory indicator tells a very different story.

While Greater Victoria rose to a healthy 6.7 months of inventory back in October 2023, this has steadily declined down to 4.0 months of inventory as of May. As you may recall, 6 months of inventory is generally considered a balanced market, whereas anything less is beginning to trend toward seller's market territory. So, if the trend persists, we're likely to see growing competition and rising prices over the next few months.

So, if you've been eyeing the market, now might be your time to jump in. But hey, don't just read about it, get in touch and we'll craft a strategy that fits you like a glove.

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Below is a table that outlines the current housing benchmark pricing along with a sample calculation that can give you an idea of what it might cost you to own a home.

Opportunities for ordinary people looking to get into their first home, or move up into an affordable nicer home are still out there, it just takes a bit of diligence, and ideally the support of a committed agent.

Conclusion

The goal is to give you insight into what the overall market view looks like in Victoria and Vancouver Island. I have included more Resources below so that you can dive in and read more at your leisure. I will also make sure to include a new Glossary Term each month, and define it to add to your knowledge of common industry terms.

Feel free to contact me if you want to learn more or if you have any questions about the broader market trends.

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Glossary Term

Leasehold

A small number of residential properties in B.C. are long-term leaseholds (sometimes referred to as a ’99-year lease’ or a ‘leasehold unit’). While commercial leaseholds are very common, residential leaseholds are not.

A long-term residential leasehold is a form of home ownership where a person (the lessee or leaseholder) purchases from the owner of a building (the lessor or leasehold landlord) the right to occupy a premise for a long-term, fixed period (more than 20 years, and usually for 99 years, on first sale). This is sometimes referred to as “prepaying the lease”.

https://www2.gov.bc.ca/gov/content/housing-tenancy/real-estate-bc/buying-selling/long-term-residential-leases