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Experts said Victoria's housing market would take a beating, but not even soaring listings have dampened prices

Downtown Victoria's soft condominium market is looking for up-side potential, which may come in the form of an upcoming interest rate announcement due Wednesday. Victoria's overall housing market, however, remained resilient in May with stable pricing overall, and a single-family-home sector that continues to draw strong demand.

Experts said Victoria's housing market would take a beating, but not even soaring listings have dampened prices
Mike Kozakowski,
A significant surge in property listings in May couldn’t temper the price of Greater Victoria’s single-family homes or drastically dampen values of other market segments, according to the latest Victoria Real Estate Board data, as 763 deals were completed in the last full month of spring that is historically the strongest period of the year.
MLS transactions throughout May for single-family properties yielded 399 sales, exactly equal to May of 2023, albeit at a higher price of $1,323,064 on average compared to $1,297,552 one year-ago, with the median in 2024 edging out last year’s median by $5,137, to $1,177,500.
The condominium segment took one on the chin, however, as values dropped from an average of $674,732 in May of 2023 to $613,936 this year, although the median fell by a less noteworthy sum from $560,000 to $547,450. The total number of sales dragged slightly to 235 units from 248 last year. Much of that segment’s woes, says Victoria-based realtor Marko Juras (see website), can be attributed to downtown Victoria’s struggling condominium market dragged down by an over-supply of units, and an under-supply of demand.
Townhomes, meanwhile, represented a mixed bag of stronger sales, a softening average and a higher median, delivering 91 transactions (eclipsing 84 last May) at an average price of $836,439 and a median of $789,574. The average was lower than May of 2023’s $853,470, but the median was stronger at $789,574 this year versus $785,000.
“Demand for single-family homes remains very strong, and sales are only held back by the resilient price points we’ve seen over the last year,” said Juras. “As far as condo sales go, in today’s market two-bed, two-bath units on the West Shore where pricing remains attainable for many buyers continue to close deals, and townhomes are the natural fall-back for buyers priced out of houses, so it’s not a surprise that values remain stable for that segment.
Juras adds, that downtown Victoria remains a depressed sector of the housing market as a variety of factors continue to weigh down sales.
“Whether it’s the high cost of downtown Victoria listings, or the social issues at street level, or the growing number of units all competing with similar layouts and similar amenities for limited buyers, the downtown market continues to struggle and that is having an impact on overall condominium sales in the region. On the flip-side, as soon as you push away from downtown, demand gets stronger, and more deals are happening, especially in the suburbs, and especially with larger units.”
Values and transactions aside, the fireworks in May were around active listings, totalling 3,338 combined residential and commercial units, or 52.5% higher than last May’s 2,189 units, equating with a nine-year high for listings in any month. In April, active listings numbered 3,017, and the year started with 2,140.
Of May’s 3,338 listing total, the VREB identified 2,627 units as residential, and the remainder commercial. In 2023, May’s residential listings reached 1,642 units, making 2024’s active residential inventory a whopping 60% higher than twelve months ago.
New listings soared to a 14 year high in May with 1,757 units of residential and commercial combined, the highest since 1,783 in April of 2010.
Still, prices held steady.
“We are seeing a significant amount of new listings entering the market, and existing listings, especially in downtown Victoria, are remaining on-market for longer,” Juras says. “That being said, not all listings are created equal, so desirable properties will sell and will reach a seller’s asking price, maybe beyond in some cases, and there is no hint yet of sellers collectively feeling pressured to sell and willing to significantly dampen their price expectations in order to do so.”
This week, though, could be sentiment changing for the broader market, Juras notes, with a key interest rate decision due Wednesday morning.
“The speculation is, that the Bank of Canada will begin to lower rates this week. The drop in rates may not be sizable at first or all that meaningful, but it will set the tone, and that’s what the market currently needs in order to give buyers more confidence, especially non-investor buyers who may be interested in a market like downtown Victoria where up-side potential has been challenged of late.”
Juras also points to the difficulty investors have found themselves in. While their collective dollar has historically helped add rental inventory to Victoria’s housing stock, today, investors are holding back and waiting for provincial and federal election results that could drastically impact the viability of their investments.
“From federal changes to capital gains taxes, to provincial tenancy branch regulations appearing to favour tenants more than landlords, to the provincial ban on AirBnB rentals in investment units, the verdict is out whether lower interest rates are enough to bring most investors on the sidelines around,” Juras says. “And until the investors return, we will continue to see downward price pressure on downtown Victoria condominiums, particularly one-bedroom units where appreciation potential remains an investment hurdle.” C
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