High interest rates have finally landed blows to Victoria’s real-estate market with October showing a re-sale slowdown compared to last year and a value drop for single-family and condominium homes, according to the latest Victoria Real Estate Board (VREB) data.

 

407 properties available through the Multiple Listings Service (MLS) changed hands in October, down from October of 2022’s 480 sales which was already a large departure from 745 frenzied sales in 2021, and 990 record-breaking sales in 2020.

 

The month’s 193 single-family-home purchases through MLS represent the second slowest month in 2023 for that segment of the market, with only January posting fewer sales at 120. The average price dropped below the 2023 running average of $1,293,229 to $1,259,028, while the median slipped to $1,125,000 also below the 2023 running average of $1,153,750.

 

“It was a tough month, with interest rates finally having put a lot of weight on buyers, while we also saw the Province’s short-term rental ban resulting in more inventory coming onto the re-sale condominium market,” said Marko Juras, a Victoria-based realtor (see website), adding that “there was definitely less demand for housing in October, as buyers are now electing to wait for potential rate reductions in the spring, and are delaying plans to move into new homes or enter the market.”

 

Juras also noted that in terms of the volume of residential units that sold compared to the amount of residential units listed for sale in October, only a small fraction of properties secured buyers, and this means sellers have to find ways to stand out among their competition.

 

“Only 18% of residential listings actually sold between October 1 and 31, so as a seller, if you’re serious about selling your home, you have to sharpen your pencil and incentivize buyers to consider your listing,” Juras said. “We are no longer at the peak of the market but a lot of sellers are pricing their homes as though we are. Where we’re actually at, in terms of market sentiment, is an established neutral market, where quality counts, price point counts and negotiations are to be expected.”

 

Moving from several years of a seller’s market to a neutral market in 2023, Juras points out that Victoria is slowly shifting towards a buyer’s market, as defined by the amount of inventory relative to sales. October’s VREB data suggests October had over five months of inventory, whereas seven to nine months is considered the threshold for a buyer’s market.

 

Nevertheless, condominium purchases in October totalled 141 units, and like single-family homes, was the second slowest this year behind only 101 sales in January. The average paid for a condo unit in the Capital was $616,545, slightly below the running 2023 average of $634,821, and the median also dipped to $540,000, below the annual running average of $550,000.

 

Townhomes saw a lift in average values, however, with a price of $811,235 (compared to $806,179 throughout 2023 and slightly higher than September’s $801,092 average) across 42 sales and a median of $747,648 (below the annual $760,000 median average). The slowest month of 2023 for the segment was also January, with 37 sales.

 

New listings for October were the highest since 2020’s 1,162, landing at 1,100 for the month. Total active listings rose to 2,756 units compared to 2,699 in September. Of the 2,756, 2,144 were residential and 612 were commercial. 

 

“It may appear at first glance that there are a lot of dark clouds on the horizon, but I remain optimistic the market will stabilize come spring,” Juras says. “Victoria remains such an attractive destination, and we have to keep in mind that interest rates are not going to be high forever, and eventually we will reach an equilibrium. My advice, is for buyer’s to do what is in their financial best interest, be it buy this fall or wait for the spring season, and to try to seperate hype from what can be reasonable market ebbs and flows.” C

 

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