The cost of a single-family-home between Sooke and Sidney on southern Vancouver Island has reached an average and median between January and August that is just shy of 2022’s all-time records, according to Victoria Real Estate Board data.

 

The same story applies to townhomes throughout the Capital, which have also posted valuations so far this year that are closely behind the market peak of 2022.

 

Over the first eight months of the year, the average price for a free-standing house sold through the Multiple Listings Service was $1,308,286, 2% below the 2022 average of $1,333,869. This year’s median house price is $1,170,000, while $1,180,000 was the peak median set three years ago, and represents a difference of less than 1%.

 

Victoria real-estate agent Ryan Cook (see website) with south Island brokerage Re/Max Camosun says demand for houses in the Capital remains high, and many more buyers and sellers are on the sidelines waiting on lower interest rates.

 

“We saw throughout the year healthy sales activity across all market spectrums, but especially for single-family homes and townhomes,” Cook notes. “And while the high prices of 2022 were noteworthy at the time, what the market hasn’t broadly realized today, is in terms of the average and median prices buyers are paying, our market is skirting the same valuations we saw when interest rates were at historic lows three years ago, and when buying activity was at historic highs."

 

Cook then adds, that "buying demand may increase now that interest rates have started to slide once more, and as broad market pessimism at the start of 2025 has eased in markets like Victoria. Could higher demand this fall lead to even higher prices? It's quite possible.”

 

Townhomes have averaged $830,823 through August, compared to $867,002 set as the record-high annual average in 2022. The difference is just over 4%. The median has an even closer gap of less than 2%, or $792,000 this year compared to $807,000 in 2022.

 

Cook believes that Wednesday’s 0.25% Bank of Canada Rate drop to 2.5% and murmurings of yet another interest rate adjustment later in the fall (or even multiple downward adjustments) is motivating more buyers to commit to a property search, and at the same time, is giving would-be home sellers an incentive to list into what may be a busier fall season than typically seen in the Capital.

 

“2025 has been a relatively strong sales year, but the spring market was muted compared to what it may have been had the economic outlook for Canada been less turbulent,” Cook says. “However, what the market held back this spring, appears to be lined up for this fall, and it looks like that is a sentiment multiple housing markets across the country are forecasting.”

 

A key obstacle to mortgage qualification remains the federal government’s interest rate stress test, which requires homebuyers to qualify not at the rate offered by their lender, but a significantly higher percentage meant to ensure that should rates fluctuate in future, the buyer will not face financial hardship. It is there that any drop in mortgage rates will be most felt by lowering the qualification floor.

 

The stress test, while laudable in theory, has kept a significant volume of purchasers from qualifying for their desired purchase and having to downgrade expectations, or to come up with a higher down payment, or foregoing a purchase altogether. This, Cook says, has contributed to the wait-and-see approach across all market segments since the last rate adjustment in March, especially among younger or first-time buyers without existing equity.

 

At the Re/Max brokerage, Cook mentions that agents are being briefed by their in-house mortgage advisor that for the first time in quite a while, variable mortgages are back in vogue. This is a stark departure from the get-in-and-lock-in interest rate environment of 2024 through much of 2025.

 

Home values, meanwhile, have crept higher and higher throughout the year, with townhomes posting the segment’s highest monthly average in August at $870,978, as houses averaged $1,294,407 (not the highest of 2025, but above 2024’s annual average of $1,270,057).

 

As an aside, the condominium market has been both a challenge for sellers in Victoria’s urban core, and also an opportunity for buyers. Condominium prices throughout 2025 across the entire region have averaged $610,321, some 6% below the 2022 peak of $642,826, dragged down by soft buying activity in the Capital's bellwether condominium sub-market of downtown Victoria and its periphery. Slower sales, though, have persuaded some sellers to accept lower offers, providing an opportunity for first-time buyers to enter the market at favourable prices.

 

Cook said in an article published by Citified in May of this year, the condominium market had “not seen conditions quite like this …in a long time, where buyers are holding much more bargaining power than sellers. When looking at the re-sale data available via the Multiple Listings Service, this spring and summer appear to be poised for negotiation and opportunity.” 

 

And indeed, they were. Now, coupled with even more favourable lending rates, first-time and entry-level buyers eyeing an entry point into the downtown and core area condominium market have an even stronger incentive package to help make the leap from renting to homeownership. C

 

© Copyright 2025 by Citified.ca. All rights reserved.