Year-to-Date Victoria Real Estate Market Update

As we enter the final quarter of the year, real estate data in Greater Victoria continues to show market shifts. While prices have declined, inventory has increased, and the market is becoming more balanced for both buyers and sellers.

In the Victoria Core, the benchmark price for a single-family home has decreased to $1,279,700, down from $1,315,100 in September 2023. Condominiums have seen a similar trend, with a 5.1% reduction, equating to approximately $30,000 less compared to last month.

This shift reflects the basic principles of supply and demand, where increased supply and steady demand typically lead to softened prices. Anecdotally, we’ve noticed more subject-to-sale offers, but multiple-offer situations are still emerging for well-maintained single-family homes priced between $900,000 and $1.1 million and certain well-priced townhouses such as those between $600,000 and $700,000.

Despite what appears to be a slower pace, conversations with industry professionals confirm that this is a “strange market” that is difficult to characterize in general terms given that some properties, which have lingered on the market for months, are suddenly in demand, while others continue to sit with little interest. This suggests that pent-up demand may be beginning to surface.

The Bank of Canada has two meetings left this year, on October 23rd and December 11th, with many economists predicting a 125-basis-point rate cut by spring, which could lower the policy rate to 3%. This expectation has led some buyers and sellers to delay their decisions in hopes of securing lower rates. However, the recently available discounted variable-rate mortgage products often provide a better financial opportunity than waiting for less discounted options that will likely become available as interest rates decline. There’s a saying that when banks are promoting something, it’s wise to consider doing the opposite; we are already witnessing this shift in the lending market, with banks pushing fixed-rate mortgages to lock in clients at higher rates. It’s also important to remember that higher-rate environments often yield more favorable real estate pricing for buyers—a condition that won’t last indefinitely as rates decrease.

Recent federal announcements are set to have a direct impact on the housing market. Starting December 15, 2024, first-time homebuyers will be eligible for 30-year mortgages, lowering monthly payments by approximately 8%. On the same date, the insured mortgage limit will rise to $1.5 million, up from the current $1 million cap. This change could significantly improve access to homes in high-priced markets like Victoria. We’ve already seen increased activity in the sub-$1 million segment of the Victoria single-family home market due to the current cap, and we’re particularly interested to see if the new $1.5 million threshold will drive similar demand for properties priced just below that mark. It’s an area we’ll be watching closely in the coming months.

For homeowners considering adding a secondary suite, starting January 15, 2025, a new federal program will allow borrowers to refinance up to 90% of their home’s value, including the value added by the secondary suite. The amortization period for these refinanced mortgages can be extended to 30 years. Coupled with the BC Housing’s Secondary Suite Incentive Program (SSIP), which offers up to 50% of renovation costs (capped at $40,000), there are ample opportunities for homeowners seeking to add a mortgage helper.

As always, we’re here to assist with any questions you may have about buying or selling property in Greater Victoria. Whether you need further market insights, guidance on the best timing for your move, or other personalized advice, we’re just a call away. We’re also happy to schedule appointments to view properties at your convenience. Don’t hesitate to reach out—we’re here to help.

Warm regards,Audra Poole & Robert Peterson ^JD

For more statistics on the Victoria real estate market – click on the links to the right for the latest reports and data from the Victoria Real Estate Board, the British Columbia Real Estate Association, the Canadian Mortgage and Housing Corporation and the Canadian Real Estate Association.