reater Victoria Real Estate Market Update - Summer 2024
This summer, we're witnessing a much more balanced real estate market. In Greater Victoria, there were 6.2% fewer sales in June compared to June 2023. To put it in numbers, June 2024 had only 661 sales, which matches the number of sales we had in June 2013! Considering all the population and inventory growth, this signifies a standoff in our market. Buyers are plentiful but waiting on the sidelines.
Buyers are taking their time and being much more analytical. The increase in inventory is giving them this opportunity – MLS listings in July of last year were at 2,400, and this year, in 2024, we have 3,400 active listings. Rising inventory combined with slower sales traditionally would indicate downward pressure on prices.
But of course, in BC real estate, that is not the case! Sellers are holding on to 2021/2022 peak pricing. The median single-family home sits at $1,185,000. We're seeing incredible resiliency. Quality products, especially those with rental suites in core locations, are still gathering multiple offers. While this is down significantly from the Spring of 2022, prices are holding strong far above pre-COVID levels when interest rates were a third of what they are today. For contrast, the median single-family home back in June of 2014 was $535,000.
Now, let’s switch to the condo market. The median condo in June 2024 was $549,950, which has been consistent and stable, hovering around this price range all year. However, there are several headwinds impacting downtown condos:
One positive aspect is that buyers priced out of single-family homes are having to settle for condos. In addition, nearly all new construction is going 100% rental. I don’t suspect the theory of new construction adding competition to condo ownership will have any material impact on existing prices.
As of July 24th, The Bank of Canada has lowered interest rates 50 basis points from its peak. This will increase buyer sentiment and remain a positive outlook should 5 year mortgage rates drop below 5%.
The province says its housing target program is a success, as the combined six-month housing totals from the first 10 communities to be given targets indicate more than 4,000 new homes have been built. Victoria eclipsed its target, reporting the completion of 753 new housing units, exceeding its first-year target of 659.
Looking ahead, an interest rate cut is imminent and will bring back some positive sentiment. However, we anticipate this won't happen until 2025. The US Federal Reserve has a policy of not adjusting interest rates during an election year. Once the world's largest economy starts to cut rates, Canada will be certain to follow suit.
That’s all for today’s market update! If you found this information useful, don’t forget to like, comment, and subscribe. Also, hit the bell icon so you don’t miss any future updates. Thanks for tuning in, and I’ll see you in the next update!
Dustin Miller is the managing broker of 8X Real Estate. When he's not on the road, he is on his computer looking at real estate. You can often find Dustin at his office enjoying a bowl of won-ton soup.
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