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 the 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.
The Bank of Canada has increased the current mortgage rates, but they are still very low and still a great incentive to get into the market. The absorption rate is very high and we continue to remain in what is considered a strong seller's market as there is still very little supply to satisfy the continued demand for housing.
Although 17% lower than in February 2021, sales numbers are starting to pick up this year with 718 properties sold in February. Despite the rise in inventory levels, demand is also peaking, surpassing previous highs. This means that properties are effectively selling faster than new listings can be added to the market.
One factor that may be pushing up current demand is a rush for buyers looking to lock-in fixed rates before mortgage rates soar higher. If this is the case then we might expect to see demand surge rather than decline as an immediate response to rising interest rates. However, rising interest rates should start to dampen demand in the longer term.
Below is a table that outlines the current (March 2022) housing benchmark pricing along with a sample calculation that can give you an idea of what it might cost you to own a home.
In our current market, a lot of the demand seems to be focused around more affordable properties (i.e. around $1M or less). Whereas, the more expensive properties (i.e. $1.5M+) tend to sit on the market a bit longer and are seeing fewer multiple offer situations by comparison.
With that in mind, there are still opportunities for ordinary people looking to get into their first home, or move up into one of the more affordable homes that are in and around the $1M or less range. It just takes a bit more 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
Variable Mortgage Rate
A variable rate mortgage is a type of home loan in which the interest rate is not fixed. Instead, interest payments will be adjusted at a level above a specific benchmark or reference rate. With some variable rates, the change in interest rate impacts the amount of your monthly payment. With other variable rates, your regular payment remains constant, even if your interest rate changes based on market conditions. With these types of variable rates, change impacts the amount of principal you pay off each month. When rates on variable interest rate mortgages decrease, more of your regular payment is applied to your principal. Additionally if rates increase, more of your payment will go toward the interest.
Read More: https://www.investopedia.com/terms/v/variable-rate-mortgage.asp & https://www.cibc.com/en/personal-banking/mortgages/resource-centre/variable-rate-mortgage.html
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: