top of page
Search

Market Insight Series - July 2024

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, provide glossary term definitions, and 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, Summer is here, and today we're welcoming in the Summer sun, cool beats, and the latest numbers from Victoria's Summer real estate market. In June 2024, a total of 661 properties changed hands in the region, marking a 6.2 percent drop from the same period last year when 705 properties were sold. Compared to May 2024, there was a more significant 13.4 percent decrease in month over month sales.


Condominium sales were down 16.5 percent from last June, with 202 units sold. This may be surprising when you consider the new short-term rental rules that have been motivating investors to sell their short-term rental condos and the additional inventory this has been adding to the BC condo market. In fact, if we look at the historic supply of condos since 2022, the current supply is near its highest point in two years, with about 856 active condo listings at the end of last month.

However, ample supply alone does not always translate into more sales. Now, while it might be easy to point to cost and affordability as a leading cause, we have to keep in mind that while condo sales are down, single-family homes saw a modest uptick of 6.2 percent from last year, clocking in at 342 sales. So, simply put, cost and affordability aren't the whole story here. Instead, I think it's important to consider relative cost and relative affordability. If we think about it this way, then there are some common distinctions between typical condo buyers and typical detached home buyers that can help explain this divergence, namely:


Typical Condo Buyers

  • Often have a smaller budget and are typically first-time home buyers

  • Are usually younger individuals and couples who are earlier in their career and bringing home less income

  • As first-time condo buyers, many of these folks haven't built up equity to put toward their first purchase

  • As first-time condo buyers, many of these folks have a smaller down payment, which means they are carrying a bigger mortgage


Typical Detached Home Buyers

  • Usually have a bigger budget to work with and are not first-time home buyers

  • Are usually older individuals and couples who are more advanced in their careers and bringing home more income

  • As homeowners, many of these folks can sell their current home and use their existing equity to put down a much bigger down payment and carry a smaller mortgage

  • As homeowners, many of these folks may be able to port over a lower interest rate from their existing home mortgage, keeping their mortgage cost down for the time being


All of this is to say that even though a detached home may be more expensive in absolute terms, in relative terms, many detached home buyers are in a much better position to buy than those looking to purchase a condo. Especially if the detached home buyers are moving up rather than breaking into the market in the first place. It's also worth pointing out that while a condo may be half the price of a detached home, the monthly mortgage on a typical condo could be as much as 58% of the cost of a typical detached home! At least, that's what we get from our example below:


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

Beyond condos and detached homes, what else is happening? Laurie Lidstone, Chair of the Victoria Real Estate Board, said June fell in line with the usual seasonal trends. More listings meant more choices for buyers, translating to more time for decision-making. Sellers might have found themselves waiting longer to snag their perfect buyer. Sure, there are pockets where competition remains fierce, but overall, the spring buzz tapered off as summer took hold.


As of June's close, the Board listed 3,460 active properties for sale, up 3.7 percent from May and a whopping 47.7 percent jump from June 2023. Lidstone noted that with sales and prices holding steady year-over-year, we're not looking at a roller-coaster ride for Victoria's real estate market this year. Stability, my friends, it's what keeps both buyers and sellers in the game.


Now, let's talk home prices. The benchmark value for a single-family home in Victoria's core dipped 1.4 percent from last June to $1,295,500. Meanwhile, condos saw a slight nudge upwards, edging 0.1 percent higher to $567,900. Nothing dramatic, just the ebb and flow you'd expect in a market finding its rhythm. Although we are starting to see a small rise in prices, the overall trend has remained relatively flat since February. If we look at the median sale price of detached houses, it gives you a clear idea of what I mean. prices may be rising slightly this year, but for the most part the market is fairly steady.

On a higher level, some financial institutions are beginning to revise their sales and prices forecasts for the remainder of this year. For example, TD has dropped their forecast for expected number of home sales in Q3 and Q4 of this year. Although they still anticipate that sales and prices will gain traction in the second half of this year, they are anticipating a smaller uptick largely due to the fact that borrowing costs seem unlikely to fall as much as previously expected. This updated forecast means that we may see additional pent up demand pushed into 2025, and with it a deferral of some of this year's expected increased sales and home appreciation into next year as well.


So, what's the takeaway? While the market continues to move in the right direction, it's still a slow and steady march. No sudden changes and no cause for alarm. If you're hoping to sell your home this year, just know that it may take a little longer. If you're looking to buy, you're still in a good market to take your time and find the exact perfect home. Although we may see another Bank of Canada rate cut later this month, there's no reason to believe this will have an immediate or dramatic impact. In fact, as you may have noticed above, the current absorption rate has actually fallen from 29% last month to 24% this month. That means demand isn't ramping up yet; if anything, it's actually cooled off from last month.


Whether you're eyeing a purchase or gearing up to sell, feel free to reach out and learn more about the current market. I'll be happy to share some insights and strategies to help you navigate these nuances and find your slice of the Victoria market. Stay informed, stay ahead, and remember—steady as she goes.


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


Zoning

Zoning outlines what types of developmental and operational use of land is allowed on a given tract. Municipalities tend to partition districts and neighborhoods according to a master plan. This may be done to promote economic development, control traffic flow, manage noise levels, reserve living space for residents, and protect certain resources.



Read More:


Resources


1. VREB Insight:


2. Mortgage Calculator:


3. Mortgage Rate By Bank:


32 views

Comments


bottom of page