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Rollercoaster 2022 was 'still' a year of real-estate records in Victoria despite losing gains from January to December

A downtown Victoria street on a December, 2022 evening. Despite headwinds in the second half of the year, Victoria's real-estate market still broke multiple price records thanks to high-valued sales in winter and spring of 2022.

Rollercoaster 2022 was 'still' a year of real-estate records in Victoria despite losing gains from January to December
Mike Kozakowski,
The final month of 2022 was a whirlwind for Victoria real-estate as single-family-homes posted higher values than expected – while condominiums and townhomes slipped more than their respective forecasts – to nightcap a year that managed to deliver numerous record-breakers and an infamous about-face halfway through.
According to the Victoria Real Estate Board (VREB), 156 single-family-home sales via the Multiple Listings Service (MLS) in December yielded the highest average valuation since August, landing at $1,244,484 and a median of $1,050,000, surpassing averages in three prior months with a flat-lined median since September. The month’s activity for this segment was the slowest since December of 2018’s 153 sales.
For the year, 3,264 single-family-homes (SFD) sold for an average of $1,333,869 between January and December with an averaged median of $1,180,000, a record-high for both pricing categories. By comparison, in 2021 4,708 SFDs sold, at an average of $1,206,878 and a $1,050,000 median.
Victoria realtor Marko Juras says the annualized data for 2022 will show impressive gains across the Capital’s real-estate market, but the true story is a literal tale of two cities.
“It’s been a rollercoaster all year, that started out super hot in January through to late spring, then the Bank of Canada’s rapid interest rate increases pulled the rug from under the market over, and over again,” Juras said.
“So typically, annualized VREB data most of the time is very reliable, but this year we had completely two different scenarios in effect if you were to compare January to December, so the snapshot on an annualized basis will be somewhat misleading,” Juras added.
On the pricing front, condominiums also had a banner year in 2022, with VREB’s MLS data showing a record-breaking annual average of $642,826 and a record-high $580,000 averaged median across 2,276 sales. However, for the month of December, sales dropped from prior months to 94 at an average price of $549,561 and a $510,000 median, the lowest for 2022. Last year, 3,449 sales were recorded averaging $562,254 and an averaged $495,000 median.
In tandem with condominiums, townhome values reached their highest level ever when averaged over the year, with a unit cost on MLS of $867,002, at an averaged median of $807,000 over 760 purchases. In 2021 the year’s average was $736,482 with a $708,999 averaged median for 1,135 purchases.
The segment had 41 sales in December averaged at $748,795 and a median of $725,000. Like condominiums, these were the lowest figures for the whole year. And not since 2018 have sales dipped this far for the month.
In total, December generated 320 transactions in Greater Victoria across all market segments, including commercial purchases, making December of 2022 the slowest for MLS sales since 2012.
The expectation is slow markets lead to a rise in listings. Not in 2022, though, and not in December. December’s active listings fell from 2,111 in November to 1,688. Only 2020 and 2021 had fewer properties for sale in December since 2003. The story was much the same throughout the whole year, with 2022 showing only 379 more new listings throughout the year than registered in 2021, topping out at 10,395-units. The strength of the rental market, Juras believes, had a lot to do with the anomaly.
“Despite the slowdown in sales and reduced prices, we didn’t see much distressed selling, and the market activity is still in line with five and ten year averages, defying projections. I feel that today, the unseen hand presiding over the state of the re-sale market is Victoria’s rental market,” Juras said.
“A lot of listings ended up getting pulled in 2022 with sellers unwilling to sell their homes for less than their target price, and investors hoping to sell, would fall back on strong rental rates as a back-up to essentially wait out the market downturn, so the impact was fewer lingering listings than we’d see in years prior, and declining listing volumes the closer we got to the end of the year.”
In terms of gross dollars exchanged, 2022 ended up as the second-best year on record, according to the VREB. The annual tally was $6,802,719,196 for 6,804 deals, outpacing every previous year except for 2021’s head-turning $8,976,801,770.
As for an outlook, Juras says market dynamics suggest the first few months of 2023 will be a challenge for sales as the tepid pace of winter real-estate demand couples with what could be another interest rate increase or increases. Once spring comes around, the realtor is optimistic a sense of normalcy will return to the market.
“Victoria is an attractive place, demand for local real-estate remains very high even though current economics present a challenge for new buyers or buyers currently priced out of their market segment, but in time, the market finds a way to adapt, and I believe that will happen by mid-2023,” Juras said.
The New Year also delivered fresh regulations that will freeze the purchase of residential real-estate for foreign buyers until at least 2025, and provide buyers forwarding unconditional offers to sellers a three day rescission period plus a fee for rescinding their bids.
Juras feels the foreign buyer ban is likely to have little to no impact due to the historic lack of foreign buyer activity in Victoria’s real-estate market, and the three-day recision period for unconditional offers is likely to lead to negligible benefits, especially in a market that has already cooled, and with sellers expected to pursue buyers for any monies owed in the event a buyer walks away from an offer.
The province has stipulated that buyers collapsing their offer will theoretically owe a homeowner the equivalent of $250 per $100,000 in home value, or $2,500 for a million dollar home. C
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