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Market Insight Series - October 2023

Updated: Oct 5, 2023

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 critical market numbers to look into, provide glossary term definitions, and conclude with resources if you want to research current trends and stats further. To find the Market Insight for the previous month, click here.

Ladies and gentlemen, we've got some real numbers to crunch here, and today, we have some juicy topics to uncover. Particularly how current geo-global affairs may impact the local real estate market. This is the state of the real estate game in Victoria, and it has severe implications for homeowners and potential buyers. So, get ready because we're diving deep into the figures.

Alright, let's kick it off with the stats. In September 2023, 493 properties were sold in the Victoria Real Estate Board region. That's a 20.2 percent jump from the 410 properties sold in the same month last year, but these are not substantial sales numbers by any stretch of the imagination. Sales of condos increased by 23 percent compared to September 2022, with 155 units changing hands. And single-family homes? They are also up slightly, with a 3.2 percent increase at 228 homes sold. Although the year-over-year comparison is favorable, we must remember that last year's numbers are from the bottom of the previous significant correction, which saw the property absorption rate fall from 120% in February 2022 to 22% in September 2022.

While the market might seem stable on the surface, there may be a hidden storm brewing. The inventory game has changed, with almost a thousand more listings for sale compared to the start of the year. As of September 2023, there were 2,699 active listings on the Victoria Real Estate Board Multiple Listing Service®, marking an 8.4 percent hike from the previous month and a 17.3 percent increase from last year.

Now, this might sound like good news for buyers, and in some ways, it is, but there's a kicker. The cost of carrying a mortgage has skyrocketed. While housing prices have been relatively stable throughout the year, excluding a decent bump over the summer months, the burden of a mortgage is getting heavier by the day. This poses a real challenge for first-time buyers and families looking for those elusive two or three-bedroom homes at reasonable prices. The interest rate environment is making it challenging to crack that homeownership dream.

And let's not forget about the current benchmark prices. In September 2022, the benchmark value for a single-family home in the Victoria Core was $1,299,500. Fast forward to September 2023, and it's bumped by 1 percent to $1,312,200. Condos in the Victoria Core area had a benchmark value of $581,500 in September 2022. By September 2023, that number had climbed 1.4 percent to $589,600. These kinds of increases can have a tangible impact on your pocket.

The Global Macro-economic Environment

That's your high-level market snapshot, but let's break it down further. As many of you know, inflation is a critical driver in our current market environment, and local and global factors move inflation. Regarding global factors, we know that COVID-19 significantly contributed to supply-chain issues and shortages. This, paired with a large amount of money printing, government spending, and the resurgence of consumer markets after the end of our pandemic lockdown, kicked off a substantial rise in inflation. Unfortunately, although the response of central banks was rapid, it has not been fast enough to tackle rising inflation. This includes the response of the Bank of Canada (BoC), whose rapid interest rate rises are still battling to beat down rising and potentially entrenched inflation today.

Rising Sanctions and Trade Tensions

Some other geo-political elements appear to be contributing to a persistent inflationary environment. One of these is the application of Western sanctions against Russia in response to the war in Ukraine. These tightening sanctions have closed access to a significant resource market with direct and indirect impacts. European countries have broadly felt the direct effect since they were one of the biggest beneficiaries of trade with Russia. However, an indirect effect is that when these markets are willing to pay more to source these limited resources from other suppliers, this can increase some commodity prices. For example, if European markets are eager to pay alternative suppliers more for oil and natural gas, suddenly, these alternative suppliers can charge more to everyone else. This can mean rising local costs at the fuel pump, contributing to the increasing cost of everything else, and rising inflation.

Similarly, we should consider rising trade tensions between the West and China. The US has been applying increasing trade sanctions against China in response to their aggressive posturing towards Taiwan. As we all know, Canada usually isn't far behind in making similar steps when the US makes a geopolitical policy move. We've seen this with Canada's assistance in the US arrest of Huawei's Chief Financial Officer in 2018 and our sanctions in response to Chinese human rights violations of people in the Xinjiang Uyghur Autonomous Region.

North American Re-industrialization

The rise in global trade sanctions and trade tensions, with weaker global supply chains and local populism, contributes to another emerging trend. That trend is the reshoring of manufacturing and reindustrialization of the North American continent. Although this is a positive long-term trend since it should continue strengthening and building local economies, the short-term cost of building a larger industrial plant is inflation. The price of developing more local manufacturing and production capacity means that the cost of goods and services may continue to increase substantially over the next 5-10+ years.

Changing Global Demographics

Finally, a third global element of inflation is demographic shift. We are in a unique moment in history where most significant populations worldwide, especially those in developed countries, are beginning to see their population demographics become inverted. A healthy population demographic usually takes the form of a pyramid shape. This is where most of the population is at the bottom (i.e., babies, children), fewer people are in the middle (i.e., young adults, mature adults), and the fewest people are at the top (i.e., retirees, the elderly). This has been common for most of human history, and we have typically had a healthy number of working people in the middle who are both producing and consuming goods and services. The outcome? Generally productive growing economies. However, today, we are seeing the reverse.

Many national demographics are taking on the shape of either a chimney or an inverted pyramid. With a chimney shape, young, mature, and old are beginning to equal in number. With an inverted pyramid, the population of older people exceeds that of adults, which exceeds the population of children and adolescents. In both cases, we have more retirees who still depend on an economic system they have already paid into but one in which they typically produce less and spend less. At the same time, the adult and adolescent populations replacing these former workers and consumers are fewer, meaning less productive capacity and less consumption. The result is less human capital and profitable economic activity to support a larger population. This could lead to a degree of global economic stagnation in the medium and longer term. However, in the immediate term, this lack of human capital has led to a less competitive labor market and rising wages. Rising wages then give way to more expensive goods and services, which means, yep, you guessed it! More inflation.

Local Economic Drivers

So that's the global environment we are currently contending with. But what does that have to do with local real estate? Well, it all comes back to inflation. Since global drivers are pushing inflation upwards, global trends could keep housing prices higher for years to come unless we enter a recession or see another housing correction. What about local trends?

Thinking more locally, we see a Canadian housing market where prices have risen for a few years, pushed upward by inflation, consumer demand, and housing shortage. Today, we also have a dramatic rise in interest rates, making those already high housing prices even more challenging. First-time buyers may no longer qualify to purchase with today's prices and interest rates. And those who qualify are second guessing whether or not they should be jumping into the market right now. It's a complex problem to gauge. Some experts are anticipating that Canada will narrowly avoid a recession. In contrast, others think it's already effectively here and will soon materialize in a confirmed technical recession (2 months of negative growth).

Inflation, Market Activity, Seasonal Change, and Supply/Demand

While no one knows where the market is heading, we have four guiding trends. First, inflation has proven harder to beat back than we might have hoped. Shortly after the Bank of Canada decided to hold interest rates in September, a new report was released stating that inflation had risen again to 4%. This suggests that the BoC may need to increase interest rates further. If that occurs, it will mean more pain for home buyers and a greater risk of recession.

Second, if we zoom out, we have been in a slower overall market since last year. We hit a peak in demand in February 2022, followed by a sharp drop until June/July 2022, then a flattening out with slower activity between July 2022 and January 2023. Although this year has seen a rebound in consumer demand, total monthly sales in 2023 lagged behind those in 2022 between January and April. These sales only began to overtake last year's activity starting in May, primarily due to the steep decline in demand at the end of 2022 leading into early 2023. At the same time, demand and prices this year did surge between January and May. However, May 2023 until the present has seen a slow but steady reversal, with the absorption rate dropping from 46% at its peak in May down to 22% in September. Naturally, this was primarily driven by the BoC's two recent interest rate hikes over the summer months and fear and uncertainty regarding additional future hikes. Rising prices over the summer also didn't help.

Third, we are now in the fall season, moving toward winter. This is typically when demand for housing is at its lowest. If the current trend continues, then prices should remain stable or decrease as we head toward the end of the year.

Finally, Supply versus demand. As we've discussed before, a big part of our enduring challenge is a lack of housing inventory. Canada has been in a severe housing shortage for the last few years, and this has become critical in the previous two years. Fortunately, inventory has been increasing this year, but we still face shortages that may not be corrected soon. This is because our population is growing primarily due to a substantial increase in immigration. Immigration has always been essential for Canada to maintain its population growth and growing economy. However, the cost of a growing population is an increased difficulty in addressing our housing shortage.

Key Takeaways

So, what's the main takeaway from all this data? Well, it's a mixed bag. Buyers have more options but a more challenging mortgage landscape to navigate. Prices are holding steady for now but will likely weaken as we move toward the end of the year. And the cost of carrying a mortgage is getting heavier all the time. Although there is no way to know what the future will hold, with less demand and higher interest rates, there is a real opportunity here to seek a steep discount if you're still looking to buy. And as mentioned before, cash buyers are at the biggest advantage since they don't have to worry about interest rates. It's a real estate puzzle that's as complex as it gets. This is even before we account for your unique situation since every story differs. We are now facing a complex landscape where expert advice is more important than ever.

If you're considering buying or selling a home in Victoria, it's time to connect with a local Realtor who can help you navigate this ever-changing landscape. Because when it comes to real estate, numbers don't lie, and you need someone in your corner who knows how to play the game.

Below is a table that outlines the current housing benchmark pricing and 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, more excellent 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 the overall market view in Victoria and Vancouver Island. I have included more Resources below so you can dive in and read more. I will also include a new Glossary Term each month and define it to add to your knowledge of common standard terms.

Feel free to contact me if you want to learn more or have any questions about the broader market trends.


Glossary Term


Home equity is the value of a homeowner’s financial interest in their home. In other words, the actual property’s current market value, less any liens or mortgages attached to that property. The amount of equity in a house fluctuates over time as more payments are made on the mortgage, and market forces impact the property's current value.

Home equity can represent more than a mortgage loan being paid off. It is an asset that homeowners can borrow against to meet critical financial needs, such as paying off high-cost debt or paying college tuition. The interest rate on home equity-based borrowing is typically lower than that on credit cards and personal loans because the equity secures the funds. So, the equity in your home can be an intelligent source of funds. Plus, interest on such borrowing may be tax deductible if funds are used to improve the home.

Read More:


1. VREB Insight:

2. Mortgage Calculator:

3. Mortgage Rate By Bank:



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