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.
There were 478 properties sold in Victoria last month, 42.5 percent lower than the 831 properties that sold in August 2021. Despite this year over year decline, the short-term fall in demand is starting to flatten out with the current absorption rate at 28%, only a 2% decline compared to 7% one month prior, and an average decline of 20.75% during recent prior months.
Despite the potential for future changes, fixed mortgage rates have paused for the first time in months. However, with another Bank of Canada interest rate hike rolling out, variable mortgage rates have just increased in the last two days. Although rates continue to increase some are calling for an end in interest rate hikes soon. Since fixed rates have paused, and the gap between variable and fixed rates is shrinking, this could indicate that we are reaching a ceiling. Historically speaking, as we get into the Fall, both supply of property listings and demand for property tends to decline. This typically continues until it hits its lowest point in December, and then both supply and demand tend to lift in January.
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.
Although the market appears to be relatively stable this month, increasing interest rates and reduced demand are likely to mean a few things:
First, that anyone looking to sell their property this year is probably going to want to get listed as soon as possible so they don't miss the current Fall market demand.
Second, buyers are likely to be in a position of growing strength as we move into the Fall and Winter months.
Finally, mortgage interest rates are likely to continue to rise as we get into the Fall and Winter months, so buyers that are looking for a mortgage will want to keep this growing cost in mind if they are holding out for better prices.
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
Average Price
Everyone knows what an average is, but it's worth highlighting that this includes outliers such as bottom of the market sale prices for foreclosed tear downs, sky high prices for mansions, and skewed prices for sales between family members (i.e. parents giving their kids a good deal). It gets even more interesting when looking at how the Median Price is derived. More info below.
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: