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, John Cooper here with some fresh real estate news for you. The spring market is heating up just in time for summer, and let me tell you, the numbers are looking interesting. In May 2023, a total of 775 properties were sold in the Victoria Real Estate Board region. That's a 1.8% increase compared to last year and a whopping 21.7% jump from April 2023.
But let's break it down even further. Sales of condominiums were slightly down by 0.8% from May 2022, with 248 units sold. On the other hand, sales of single-family homes saw a healthy increase of 8.7% from May 2022, with 399 homes sold.
According to Victoria Real Estate Board Chair Graden Sol, May marked the highest number of sales since April of last year. It's the fourth consecutive month with sales higher than the previous month, showing growing consumer optimism in the market heading into June. However, we need to address the ongoing lack of homes for sale. If this trend continues and sufficient inventory isn't added, we could risk a return to an overheated market with pressure on pricing.
Now, let's talk about inventory. At the end of May 2023, there were 2,189 active listings for sale on the Victoria Real Estate Board Multiple Listing Service®. That's a 7.1% increase compared to April and a significant 23.3% increase from the same time last year. This slight uptick in inventory means buyers have more selection, but it's important for buyers to be prepared to move quickly, especially on well-priced properties to ensure they can seize the opportunities in the current market. Particularly in this overall enduring low-inventory environment.
Now, let's dive into the numbers that matter to buyers and sellers—the benchmark values. In May 2022, the Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core area was $1,424,000. However, in May 2023, the benchmark value for the same home decreased by 8.9% to $1,297,600. It's worth noting that this is up from April's value of $1,295,800. As for condos, in May 2022, the benchmark value in the Victoria Core area was $619,500. But in May 2023, the benchmark value decreased by 8.1% to $569,300. Again, it's up from April's value of $564,000.
While market confidence and demand is growing, seller's should be mindful of the fact that we are still in a period of market uncertainty. Canadian inflation saw an unexpected rise from 4.3% in March to 4.4% in April. In response the Bank of Canada (BoC) has gone ahead and increased the key interest rate by another 0.25% for a combined 4.75%, the highest rate we've seen in 22 years. This move suggests that the BoC has anticipated that inflation is not yet under control and further intervention is needed. Although the current increase is small compared to past hikes, if inflation continues to grow the BoC may need to come in stronger. This could have a mild or strong impact on dampening demand. This will all depend on what next steps the BoC decides to take, when that happens, and how aggressive those steps are. Despite this, with current demand surging relative to supply, average prices increasing across most product types, and the absorption rate at 46% (20% or above typically consider a seller's market), it seems likely that real estate prices will continue to grow for the time being. It also seems likely that the BoC will be hesistant to impose another big rate hike after such a rapid tightening cycle, unless it's absolutely necessary.
To sum it all up, the market is showing signs of momentum and consumer confidence is strong. The increase in inventory provides more choices for buyers, but they need to be ready to act swiftly. Sellers should be cautious about pricing and work closely with their REALTOR® to position their properties effectively. These numbers give us a snapshot of the current real estate landscape in Victoria, so if you're thinking about buying or selling, make sure to connect with your local REALTOR® for detailed information and guidance.
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.
The term "amortization" is used in different ways depending on the context. For loans amortization is the rate at which a loan is repaid. An amortization schedule is often used to calculate a series of loan payments consisting of both principal and interest in each payment, as in the case of a mortgage. In this case, amortization is the reduction in the carrying value of the balance.
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: