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.
Alright, today we're diving back into the numbers of the Victoria Real Estate scene. In March 2024, there were 588 properties sold in the Victoria Real Estate Board region. Now, that's just a smidge less than the 590 properties sold in March 2023, but still a substantial 25.1% increase from February 2024.
Condo sales took a bit of a hit, down by 10.2% from March 2023, with 177 units sold. On the flip side, single-family homes saw a slight uptick, with a 1.8% increase from March 2023, boasting 286 sold. It's like a real estate seesaw, with different products doing their own dance.
And what's the buzz from the Chair of the Victoria Real Estate Board, Laurie Lidstone? She's calling it a quiet first quarter transitioning into the spring market. More shoppers are stepping into the scene, but it hasn't quite translated into sales numbers yet. But hold tight, because historically, this is when things start heating up.
Now, let's talk listings. At the end of March 2024, we're looking at 2,647 active listings for sale, marking a solid 12% increase from February and a jaw-dropping 34.4% increase from March 2023. That's a buffet of options for buyers and sellers alike.
Chair Lidstone chimes in again, saying that this increase in inventory is a game-changer. More choices mean more confidence for both buyers and sellers. And as people make moves, more properties get added to the mix, creating a healthier market overall. It's all about supply and demand, folks.
Now, let's get down to the nitty-gritty – prices. The benchmark value for a single-family home in the Victoria Core area saw a modest 1.7% increase from March 2023 to March 2024, now sitting at $1,279,300. Condos in the same area? They're up 3.3%, hitting $567,300. While these aren't massive gains, it seems like the market is normalizing and moving higher.
In line with the forecasts delivered by the Royal Bank of Canada, the Canadian real estate market seems to be making a slow but steady return to increased sales and higher prices. In our local market, the similar number of sales to last year reflects that fact that any change is gradual and not fast. Although the number of home sales is up substantially month over month, year over year we aren't seeing a dramatic rise in demand this month.
At the same time, there is a massive increase in active listings compared to March 2023 with current listings at 2,647 at the end of March this year compared to 1,970 last year. That 34.4 percent increase in supply will give buyers a lot more options to choose from.
While prices are up compared to last year, current demand is lower. March saw an absorption rate of 29% compared a whopping 38% absorption rate this time last year. However, that doesn't necessarily mean that sales are trending downwards. While the heat may be a bit lower, absorption has been steadily trending upward since October 2023 and the change in price reflects this. Prices are not only trending upward year over year, almost every property category is up 1-2% month over month.
If absorption continues to rise, we may see demand over take supply within the next month or two. It's also worth noting that while overall inventory is currently up since last year, Months of Inventory has been trending downward since October last year. Months of Inventory is another way to measure supply and demand; normally, 6 months of inventory is considered a balanced market. More than 6 months, we're moving toward a buyer's market. Less than 6 months, we're moving towards a seller's market. In October we had 6.3 months of inventory, but this has steadily eroded to 3.8 months in March. Unless we see a sudden spike in new listings, this number will probably continue to trend downward.
Based on the current trend, all signs point toward an increasing likelihood of more competition and higher prices, although this probably won't be a rapid change as we've seen in recent years. Instead, it's reasonable to expect a steady rise in demand as we head into the Summer.
The main wild card that people are watching closely is a change in the Bank of Canada's (BoC) interest rate policy. However, the BoC is being cautious in its approach to rate cuts as it doesn't want to risk tipping the balance by cutting rates too soon or too aggressively. This could send the real estate market back into a frenzy. More likely, we probably shouldn't expect anything more than a small cut in June or July, and it's possible that the BoC could delay rate cuts until later in the year, depending on what the market is doing.
So, if you're considering moving in the Victoria housing market, now's the time to get in the game. Interest rates are unlikely to budge soon, and the market is already starting to turn upward. And hey, don't forget to reach out if you have any questions. I've got the knowledge to help you navigate these wild real estate waters.
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.
Glossary Term
Title Restriction
Title Restriction is a legal provision that limits or controls how a property can be used, it's often placed by the original developer to maintain a certain aesthetic or purpose. This includes all covenants, conditions, easements and any other title restrictions encumbering the Premises. This can include restrictions on what an owner can do with the property (i.e. building height limitations), and it can include rights given to other property owners (i.e. an easement for a shared access road across your property).
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Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: