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Victoria's slow sales start to 2023 couldn't shed high home prices

Condominium and rental towers in downtown Victoria's Harris Green neighbourhood as seen in late January, 2023. Despite a month of slow sales, home prices in the Capital Region remained buoyed.

Victoria's slow sales start to 2023 couldn't shed high home prices
Mike Kozakowski,
January’s real-estate sales data is in, and while the month may have been the slowest start to a year since 2009, home prices ushered in 2023 at an upwards trajectory.
The latest Multiple Listings Service (MLS) data from the Victoria Real-Estate Board (VREB) shows 278 properties changed hands throughout the first month of 2023, including commercial deals and manufactured homes.
VREB data shows 120 single-family-dwellings sold at an average of $1,233,152 and a $1,065,000 median. The average slipped from December’s $1,244,484 but surpassed the lower median of $1,050,000 (January’s numbers, in fact, were above averages and medians in September, October and November of 2022). Further to the median, this mid-point price in a given market category can be considered a more reliable indicator of market sentiment by not being as prone to cost outliers impacting a figure like the monthly average.
Victoria realtor Marko Juras says market activity leading to stable prices and a focus on quality offerings suggests the current interest rate environment has been absorbed and a new normal is taking shape.
“Based on buying activity in the latter half of January, we could see February’s sales surpass the near-record lows we’ve seen in prior months as higher interest rates are no longer a shock factor but a reality of the times,” Juras said. “And in Victoria, desirability for real-estate remains very high, with a lot of pent-up demand due not necessarily to high prices and higher interest rates, but an overall lack of quality product on the re-sale market.”
Condominium sales, meanwhile, totalled 101-units on MLS at an average of $606,681 and a $530,000 median, outpacing by a healthy margin December’s $549,561 average and a $510,000 median.
37 townhome sales on MLS averaged $662,338 at a $620,000 median, according to the VREB. However, the prices paid represented a sharp decline compared to December’s $748,795 average and $725,000 median, and landed at the lowest price point since January of 2021’s $647,345 average and $610,000 median. The small volume of transactions is likely to have played a role in the large average and median deviation.
New listings recovered in January to 805-units compared to 361 in December and 785 in November, yet remain significantly below long-term averages for the month with peaks yielding nearly 1,400 new units in 2008, 1,257 in 1995 and 1,211 in 2010. Active inventory throughout January remained low, at 1,739-units, compared to a long-term average closer to 3,000-units.
With inventory approaching 2,000-units, Juras cautioned that much of what is for sale is not higher quality, and bidding wars are still a factor for prized listings.
“You wouldn’t think of this market as one where competing offers are presented, yet we’re seeing bidding scenarios and homes selling for above-asking when a property rises above expectations. So the active listings total is somewhat misleading in that much of what is for sale has lingered on the market and is either priced too high, not meeting expectations, or both,” Juras said.
January also introduced changes to the real-estate market like a country-wide ban on foreigners acquiring residential real-estate, a three-day recision period in BC for unconditional offers, and higher interest rates following a 0.25% rate hike by the Bank of Canada in the second half of the month. Juras says the measures have not made a noticeable difference, according to sentiment from fellow realtors, due to a small number of foreign buyers active in the local market, a small amount of unconditional offers occurring at-present, and banks offering relatively stable five-year mortgage rates not impacted by the most recent hike.
“The recision period legislation has created more paperwork and increased the size of the purchase contract, and it came at a time when there does not appear to be a need for it. We are also not a market known for foreign buyers, so little if any impact has been felt due to the federal ban. Interest rates are also no longer as large a variable as long-term mortgages have remained static over an extended period.” C
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