Victoria real-estate has settled on a slow and steady trajectory to macroeconomic pressures since mid-2022, when mortgage rates began to rise and new buyer regulations emerged at the federal and provincial levels aimed squarely at softening demand.

 

As expected, government interventions saw prices ease from their 2022 peak, particularly in markets further east and across major Canadian cities.

 

What wasn't on the radar, at least not among the new generation of home buyers and their advocates, was the reappearance of an effect known as the ‘Victoria plateau,’ which, like clockwork, emerges when the housing market ought to be in a depreciation cycle, but finds a way to remain elevated.

 

“At the onset of higher mortgage rates and as inflation caused financial strain for Canadians, the broader sentiment based purely on what was happening elsewhere, was that Victoria’s housing market would follow a similar path with significantly lower prices and a buyer's market. Yet, our situation has, again, and somewhat predictably, become a boring and stable alternative to the national news cycle,” said Victoria-based realtor, Marko Juras. “And when it’s your primary asset that’s at stake, it’s not a bad thing to have boring and stable outcomes.”

 

Juras is speaking to a lack of re-sale inventory dampening home availability from Sooke to Sidney at levels not seen since COVID-19 restrictions took effect in March of 2020 (back then, the month had 1,084 new listings), and March of 2004 before that, when 1,088 new listings were recorded. By comparison, this March saw 1,118 units of new listings, 1,003 of which were residential (115 were commercial), according to the Victoria Real-Estate Board’s most recent market data. At this threshold, Juras argues that there isn't enough pressure to shift the equation into a buyer's market.

 


“If we were to pin a dominant data point to describe what is happening in Victoria and what has happened since mid-2022, it would be the lack of housing re-sale inventory,” Juras notes. “When just a thousand homes are listed over the span of a month at the start of the busiest buying season, it’s difficult for buyers to motivate sellers to drop prices, because demand is not only strong, competition for what is available is also strong. And what you will find, is over-priced inventory that lingers doesn’t have a weighing-down effect on the market, because buyers exclude those properties, and their presence on the market has little to no bearing on competing sellers.”

 

In total, the VREB reports March had 1,970 total active listings (1,493 residential, 477 commercial) on the Multiple Listings Service (MLS) that generated 590 sales (560 residential, 30 commercial). Compared to prior years, total active listings numbered 2,252 in March of 2020, 2,435 in 2019, and well into the 4,000s between 2011 and 2014.

 

An average single-family-dwelling sold in March via MLS for $1,225,446, a drop from February’s $1,272,933 and January’s $1,233,152, according to the VREB, although the median price (or exact mid-point price among all sales and arguably a more important metric) fell just slightly to $1,080,000 compared to February’s $1,100,000, but notched higher than January’s $1,065,000. 281 detached homes sold in March. In short, the stable median and an average well in line with the last two quarters speaks to the plateau effect.

 

Condominiums, meanwhile, had a strong run in March as buyers snapped up 197 units sold through the MLS at an average of $628,230, the strongest showing since September’s $628,356. The median rose, too, to settle at $569,500 and surpassed all monthly periods since March of 2022 when it reached $598,000.

 

“Demand for older two-bedroom, two-bath condominiums is very strong across the region,” Juras says. “This segment of the market is a logical option for someone who may be priced out of a townhome, or initially searching for a detached home in the suburbs, but eventually opting for a larger condominium in the inner core of the region.” 

 

67 townhomes sold in March via the MLS at an average price of $774,710, and at a $750,000 median. The average was the second highest since November ($788,113 in February and $802,912 in November), but the median of $750,000 outpaced all months since October’s $755,000.

 

Asked about the financial toll on Victorians as mortgage rates jumped to levels not seen in years, Juras believes current mortgage costs are already factored in to the finances of most homeowners.

 

“Victoria has avoided, for the time being, a level of financial duress that was anticipated as mortgage rates began to rise, showing that even with higher prices, the market is resilient and the federal government’s stress test already ensured buyers were capable of handling higher mortgage costs,” Juras said. “The stress test has been around for half a decade, and the higher costs of today are largely accounted for as far as financing qualifications are concerned.” C

 

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