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.
Even though the Bank of Canada has increased the current mortgage rates again, they are still low enough to continue the represent a great incentive to get into the market.
With property absorption plunging down to 76% from all time highs (120% in March), we are finally starting to see some relief from the relentless surge in demand.
Following a similar trend in recent months Sales are continuing to trail lower with April sales being 26% lower (824) than in April 2021 (1116). This shift in demand appears to be largely driven by rising and anticipated interest rates which are dampening purchasing demand.
Below is a table that outlines the current (May 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.
April saw the Bank of Canada hike the countries benchmark interest rate by 50 basis points (half a percentage), and this is continuing to push mortgage interest rates higher. Despite the slow down in demand, housing inventory continues to remain very low and current market demand continues to outpace supply.
For the time being prices are still on the rise and it will likely be many months before the market starts to cool down.
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 are still out there, 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
Closed Mortgage
A closed-end mortgage (also known as a “closed mortgage”) is a restrictive type of mortgage that cannot be prepaid, renegotiated, or refinanced without paying breakage costs or other penalties to the lender. Closed term mortgages are usually the better choice if you're not planning to pay off your mortgage in the short term. Interest rates for closed term mortgages are generally lower than for open term mortgages.
Read More: https://www.investopedia.com/terms/c/closed-end-mortgage.asp & https://www.rbcroyalbank.com/mortgages/mortgage-types.html
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank:
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