Victoria Real Estate Market Update

As we head into August, we have several important updates to share regarding the real estate market, policy changes, and recent trends in Victoria.

Tenanted Properties: Eviction Policy Changes Effective August 21st

Starting August 21st, the eviction notice period for tenants when a property is purchased will be reduced from 4 months to 3 months. This change, championed by the BCREA and BC Mortgage Brokers Association, aims to remove serious impediments to buyers of tenanted properties, including issues related to mortgage rate commitment periods. While we appreciate the efforts of these organizations, we believe that earlier government consultation with the industry, as with most housing policy, could have led to even better outcomes, which balance the interests of renters and homeowners.

Bank of Canada Rate Cut

In a widely anticipated move, the Bank of Canada reduced its overnight policy rate in late July by another 25 basis points, bringing it to 4.5%. While this reduction may seem small, it signals a positive trend that could boost buyer confidence and improve affordability. If rates continue to decrease, we expect this to make a meaningful difference for homebuyers. Following the previous interest rate cut, the Canadian Real Estate Association (CREA) reported a rise in national home sales and new listings in June. This latest rate cut is expected to further stimulate the market, potentially leading to increased activity in listings, buying, and selling. The next interest rate announcement will be September 4th with many economists forecasting additional cuts before the end of 2024.

Real Estate Market Data for July

The Victoria Real Estate Board’s July report shows that we are still in a sellers’ market, but properties are taking longer to sell compared to last year.  In July, the VREB region saw a total of 650 properties sold, marking a 9.2% increase from the 595 properties sold in July 2023, but a 1.7% decrease from June 2024. Here’s a breakdown:

• Condominiums: Sales increased by 6.5% year-over-year, with 213 units sold.
• Single Family Homes: Sales rose by 8.9% from July 2023, with 319 homes sold.
• Active Listings: There were 3,348 active listings at the end of July, a 3.2% decrease from June but a significant 38.4% increase from July 2023.

Home Prices in Greater Victoria

• Single Family Homes: The Home Price Index benchmark value in the Victoria Core was $1,322,800 in July 2023 and decreased by 2% to $1,296,100 in July 2024. However this is an increase from June’s value of $1,295,500.
• Condominiums: The benchmark value in the Victoria Core area was $571,500 in July 2023 and slightly decreased by 0.6% to $567,800 in July 2024, down from $567,900 in June.

Broader Trends & Local Issues:

Victoria’s Population Growth

Victoria experienced a population growth rate of 1.9% in 2023, which is notably the lowest among B.C.’s largest metropolitan areas and near the bottom nationwide. This slowdown was accompanied by a sharp decline in interprovincial migration to Victoria, impacting the overall growth dynamics of the city.

Local issues: Short-Term Rentals in Victoria

Despite new regulations introduced in May, hundreds of short-term rentals apparently continue to operate illegally in Victoria. According to the B.C. Ministry of Housing, there are 1,697 short-term rental listings in Victoria, which exceeds the number of issued business licenses by about 900. It is argued that compliance with these regulations is crucial for maintaining order and fairness in the housing market, however we have not seen any meaningful data in the statistics collected by the Victoria Real Estate Board that banning short-term rentals has improved housing affordability. A newly-released StatCan report reveals that reducing short-term rentals in B.C. won’t significantly impact housing prices, as these rentals comprise only a small portion of the total housing market.

If you have questions about the Greater Victoria Real Estate market, 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.