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Market Insight Series - March 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 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.





Alright, listen up folks, it's time for another update on the Victoria real estate game. and let me tell you, this is one you won't want to miss. Today's issue isn't just covering market trends, but new legislation that will have an impact on home owners and seller's across the Province. So, put on your thinking cap and get ready to dive in!


For last month we had a total of 470 properties sold in the Victoria Real Estate Board region. While that's only a 2.2% bump from February 2023 it's also a 37.8% surge from January 2024. Sales of condos? Well, they dipped a bit, down 5.6% from last February, with 152 units sold. But hey, don't sweat it, because single-family homes picked up the slack, up by 1.8% from February 2023, clocking in at 224 sold.


Now, here's where it gets interesting. Active listings are starting to pick up. At the end of February 2024, we had 2,364 listings up for grabs. That's a cool 10.5% jump compared to January and a hefty 30.7% surge from the same time last year. More listings mean more options, and that's music to the ears of buyers out there.


And let's talk about townhomes. There's been a buzz around them lately, and for good reason. Last month we saw a whopping 50% increase in townhome sales compared to last year. That's significant, folks and it tells us something. More people are buying starter homes and moving up out of condos, possibly to start a family or get some more elbow space. It's about time we pay attention to the missing middle housing segment, and these numbers are shouting it loud and clear.


Now, let's talk money. The benchmark value for a single-family home in the Victoria Core area? In February 2023, it was sitting at $1,251,000. Fast forward to February 2024, it's down a smidge, about 0.3%, landing at $1,247,400. But hey, it's still up from January, so let's keep things in perspective. Condos? They're on the rise, up by 1.4% compared to last February. In February 2023, they were at $549,300, and now? We're looking at $557,000.


Now, if you're in the market to buy or sell, you'll want to start planning things out with your local realtor so you can get ahead of the game. Here are some thoughts on that. Despite the climb in inventory, the absorption rate is rising faster. What does that mean? It means that buyers are scooping up properties at a faster pace, and if this continues it will start to put upward pressure on the price of homes. We're also seeing a return to seasonal normalcy, so winter markets are slower, while spring and summer markets start seeing demand pick up.


As far as last month's data goes, the benchmark price for single family detached homes was slightly up in most areas, whereas townhouses and condos were slightly down. That combined with a mild year over year rise in total sales tells us that the market isn't about boil over any time soon. However, buyers should be mindful of market dynamics which could start to shift in the next couple of months. If demand continues to rise relative to supply, we can expect prices to rise with it. It's also important to keep in mind that analysts are still forecasting a June timeline for the first Bank of Canada rate cut. If this happens it will probably begin stoking the fires of market demand.


BC Legislative Changes


As many of you are already aware, the BC government has made it a major priority to tackle the current housing crisis. This has become of corner stone of Premier Eby's action plan to address housing affordability when he took office at the end of 2022, and a new separate Ministry of Housing was set up in short succession in order to prioritize this goal. Now, after some time, research, and planning, the province has made a series of amendments to existing legislation. While there are a number of different changes worth reading up on, here are a few highlights of changes that may impact you.

Summary of important Changes

Reference

The maximum dollar threshold for first time home buyer Property transfer tax exemption eligibility is being raised to $835k effective April 1, 2024. The full exemption will still only apply to the first $500k of purchase price. See reference for full eligibility requirements.

Local governments are required to update their bylaws by June 30, 2024 to accommodate small-scale, multi-unit housing requirements (except in areas where they have applied for an extension).

New legislation will require some municipalities to designate Transit-Oriented Development Areas (TOD Areas) near transit hubs. These TOD Areas are defined as areas within 800 metres of a rapid transit station  and 400 metres of a bus exchange that the Province has listed in regulations.

The B.C. government is setting housing targets for municipalities with the greatest need and projected population growth. The Province is taking a phased approach to implementing municipal housing targets. The approach begins with 10 municipalities. The top 10 target municipalities include Victoria, Saanich, and Oak Bay with the following 5-year housing unit targets: City of Victoria - 4,902; District of Saanich - 4,610; District of Oak Bay - 664.

Note: The above is not legal advice, may be subject to change, and is for information purposes only. Please ensure you are seeking proper legal advice where necessary.


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


Capitalization Rate (Cap Rate)

is used to indicate the rate of return that is expected to be generated on a real estate investment property. The rate is expressed as a percentage that represents the potential return on an investment property based on its net operating income and purchase price.


Read More:


Resources


1. VREB Insight:


2. Mortgage Calculator:


3. Mortgage Rate By Bank:


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