Victoria Real Estate Market Update
Rates Down, Victoria Property Inventory Up

With June comes good news about the Bank of Canada (BOC) Rate. On June 5th, the Bank of Canada lowered its key interest rate to 4.75%, the BOC’s first such rate cut since March 2020.  While there is chatter among economists about additional rate cuts this year, perhaps as early as the next BOC meeting on July 24, Governor of the BOC  Tiff Macklem, stressed that they are going to take things “one meeting at a time.”

This is especially positive news for Victoria homeowners with variable rate mortgages or those whose mortgages are coming up for renewal.  Whether a 0.25% interest rate cut will entice home buyers who have been waiting on the sidelines to return to the market remains uncertain. However, if we see consecutive rate cuts, we anticipate a brisker real estate market in Greater Victoria this fall.

As we reported last month, Victoria is experiencing a more balanced market with inventory levels higher than they have been since 2019.  End of May data shows that inventory of residential properties, which includes single family homes, duplexes, condos and townhomes, for May 2024 compared to May 2023 is up 52.5%.  While inventory is up, sales are not. When we compare the number of single-family homes that were sold this May, compared to last year, we are flat. The number of condos sold is down 5.2%.

Latest Home sales and prices in Victoria May 2024

More inventory brings more choices for home buyers. So, if you are wanting to sell now, strategic pricing will be important to ensure success. Sellers will also need to temper expectations, especially if they are looking over the fence at neighboring properties that may have in past years sold quickly and for well over their assessed values, when interest rates were at an all-time-low.

For historical perspective, according to Canadian Mortgage Professional (CMP) magazine, the lowest fixed mortgage rate ever in Canada was 1.44% for a five-year term, which happened between September and October of 2021. A five-year variable mortgage rate dropped to as low as 0.88% near the end of 2021.  On the flip side, the highest mortgage rate ever in Canada was 21.75% for a five-year term, which happened between August and October of 1981.The highest variable mortgage rate posted was 22.75% in August 1981 …. ouch!

In other real estate related news:

The Government of British Columbia amended the Strata Property Act early this year with important changes of which condo and townhome owners should be aware:

  • As of July 1, 2024, strata corporations with 5 or more strata lots can no longer waive or defer obtaining a depreciation report and must obtain a depreciation report every 5 years.
  • Existing strata corporations without depreciation reports, or those with reports completed before December 31, 2020, will have a grace period to acquire new depreciation reports until July 1, 2026

The Government of British Columbia also launched a secondary suite program, which started on May 2, 2024. The program will offer forgivable loans of as much as 50% of the total cost of renovations, up to a maximum of $40,000, for successful applicants to add a secondary suite or accessory dwelling unit (garden suite, laneway house, carriage home, etc.) on the property of their primary residence.

The loan can be forgiven if the new unit is rented at below market rates for at least five years. Homeowners in most B.C. municipalities and regional districts can apply to the program through BC Housing’s secondary suite website.

Zoning Bylaw updates are coming soon to municipality near you. Per the Housing Statutes (Residential Development) Amendment Act, 2023, local governments in British Columbia have until June 20th, 2024, to update their bylaws to accommodate the Ministry of Housing’s small-scale, multi-unit housing initiatives.  The City of Victoria’s bylaw changes will be going to first reading on June 13th, while Oak Bay’s changes are proceeding to third reading and adoption on June 24th.

If you would like more information on proposed zoning bylaw changes in your area, or would like help buying or selling in today’s market, just reach out.

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.

Victoria Real Estate Monthly Statistics

BC Real Estate Association Housing Market Update

Canadian Mortgage and Housing Corporation

Canadian Real Estate Association (CREA)