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 everyone! We've got some juicy real estate news this month, and let me tell you, the numbers are speaking for themselves. So, grab a seat, put on your real estate cap, and get ready for a deep dive into the conclusion of a strong Spring market.
In the month of June 2023, a whopping 705 properties were sold in Greater Victoria. Although, this is a 9 percent decrease from May 2023, that's still a 15.2 percent increase compared to June 2022 when only 612 properties were sold. Sales of condominiums also experienced a stellar performance, with a jaw-dropping 19.8 percent surge from June 2022, totaling 242 units sold. And single-family homes had a respectable increase of 6.6 percent from the previous year, with 322 homes finding new owners.
Now, let's look at the bigger picture. As we reflect on the first half of this year, we're witnessing a return to a more traditional sales trend that aligns with the changing seasons. The way things used to be before the whole pandemic mess. Winter tends to slow things down, spring sees a surge, and summer keeps the market stable, albeit not as hot as Spring. It's like nature's rhythm is influencing the real estate game.
Here's something else to consider! At the end of June 2023, we had a total of 2,342 active listings for sale. That's a 7 percent increase compared to May and a substantial 13.7 percent increase from June 2022. Now, I don't know about you, but I think this influx of inventory is a breath of fresh air. We've been running low on available listings. And guess what? If this trend continues, we might just see those prices stabilize even further. Supply and demand, my friends! However, we aren't out of the woods just yet. While the property absorption ratio has declined from the previous month, the rate is still very high. Whereas last month's report had an absorption rate of 46%, this month is still elevated at 39%. As many of you already know anything above 20% is considered a seller's market. Therefore, we may still have a ways to go before prices begin settling down, and as we'll discuss next prices are still rising month over month.
Now, let's talk dollars. The benchmark value for a single-family home in the Victoria Core area in June 2022 was a hefty $1,408,500. Fast forward to June 2023, and we witnessed a 7 percent decrease, bringing that benchmark value down to $1,310,100. While prices are still down since this time last year, it's not all bad news because that's still an improvement from May's value of $1,297,600. Similarly, condominiums in the Victoria Core area saw a 9 percent decrease in benchmark value, dropping from $615,200 in June 2022 to $573,800 in June 2023. But again, current prices are still ahead compared to May's value average of $569,300, so we're still seeing a continued upswing in price this year. Taken together, although today's prices may pale in comparison to last year's highs, the overall trend for 2023 so far has been sustained recovery and price growth.
One caveat to all of this is the fact that the Bank of Canada implemented a new rate hike in June, and anaylsts are predicting another hike in July, which could be followed by a third hike in September. Depending on the strength and number of additional hikes this could put a serious damper on consumer demand. However, the counter argument, according to Desjardins Group, is that strong economic factors should keep demand strong despite new interest rate increases. These include a strong labour market, high population growth, and a healthy level of household savings. Although time will tell, at this point the market remains strong and robust.
So there you have it, folks. The numbers tell a story of a market following the ebb and flow of the seasons, while benchmark prices have had their ups and downs since last year, the current trend is on the up and up. A rise in inventory should give hope for future price stabilization, but in the immediate term the market, demand, and prices are all rising. Now, get out there, make informed decisions, and remember, knowledge is power in the world of real estate.
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.
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.
Although pending may give hope to some buyers, more realistically in Canada a pending status means that a property has reached a "firm deal". Unlike a conditionally accepted offer, a "firm deal" is very unlikely to collapse. This is because a buyer has already removed conditions and has committed to, at bare minimum, forfeiting their deposit if they are unable to close. Additionally, the buyer would be in breach of contract if they failed to close; and therefore, would be at risk of the seller seeking damages through legal action, above and beyond the seller's deposit becoming forfeit.
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: