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 Victoria Real Estate Board has released its February 2023 market statistics, reporting a total of 460 properties sold, which is a 35.9% decrease compared to the same month last year, but a 65.5% increase from January 2023. Condominium sales fell by 39.7% compared to February 2022, with 161 units sold, while sales of single-family homes dropped by 28.8%, with 220 units sold. Victoria Real Estate Board Chair Graden Sol stated that the increase in sales during the late winter confirms the return of buyer confidence and positive trends in the local market. The inventory levels are starting to increase, which is a welcome trend compared to the record lows of last year. The Multiple Listing Service had 1,809 active listings for sale at the end of February 2023, representing a 4% increase compared to January and a 113.1% increase from February 2022.
Sol noted that the current market is different from recent years, with plenty of demand from buyers and low inventory levels, but consumers have more opportunities to get into a new home in a less pressurized environment. Buyers will likely have more time to view homes, make decisions, and do their due diligence in a more relaxed market. As the new season begins, the market is likely to become more active, and buyers and sellers should seek the knowledge of their Realtor to determine up-to-the-minute conditions and how to navigate the market. In terms of the Multiple Listing Service Home Price Index benchmark value, a single-family home in the Victoria Core had a benchmark value of $1,321,400 in February 2022, which decreased by 5.6% to $1,247,200 in February 2023, down from January's value of $1,251,100. The benchmark value for a condominium in the Victoria Core area was $580,900 in February 2022, which decreased by 2.2% to $568,200 in February 2023, down from January's value of $578,300.
Although the market is still in a state of fluctuation, two things remain consistent. First, housing inventory continues to remain low, and although pricing will probably continue to roll and adjust, a shortage of inventory should continue to curb downside pressure on price. We can see this already with the absorption rate popping back up to 32% (usually indicative of a seller's market when prices are stable or rising). Second, mortgage rates are beginning to settle into a higher level. Although, many financial advisors believed that rate rises were temporary at first, experts are starting to contemplate the possibility of a longer term change. Such a permanent change would mean that the cost of financing a mortgage could remain elevated.
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
Half Duplex
A half duplex is semi-detached almost like a single family home, it is also a multi-unit property with bylaws like a strata property. All half duplexes are governed by a set of bylaws, typically these are the standard half duplex bylaws developed by the Province. Owners of a half duplex can choose to amend the standard bylaws. They can also decide not to hold regular meetings, and not to hold a contingency fund, this is known as a non conforming half duplex. Most half duplexes are non-conforming which usually means no monthly strata fees. Half duplexes typically give owners more flexibility than a typical row/townhouse or condo strata, when it comes to rules and maintenance. However, this added flexibility also means that property maintenance requires a good cooperative relationship with your neighbour.
Read More:
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: