Monthly Market Update
Monthly Market Update
March 2025
Local Real Estate Market: Steady & Balanced
On the local front, we have not seen a decline in open house attendance. Many buyers are carefully evaluating homes, often visiting properties multiple times before making a decision. The number of sales last month surpassed January 2025 by nearly 100 transactions, indicating continued interest in the market. Listing inventory has also started to grow as we move closer to the spring market, providing more options for buyers. While some hesitation exists due to political uncertainty and the potential activation of U.S. tariffs, the Victoria real estate market remains stable. February continued the trend of balanced conditions, with slowly increasing inventory and steady sales activity creating an equitable environment for both buyers and sellers. Nearly two years of steady home prices, coupled with recently improved interest rates, are positive factors contributing to market confidence.
Looking ahead, all eyes are on the Bank of Canada’s upcoming rate decision on March 12. Current bond market predictions suggest a 70% probability of a 25bps rate cut, which could further improve affordability and encourage more activity in the housing sector.
Overall, 2025 has started as a strong year for real estate, making it a favourable time for both buyers and sellers to make their move.
Canada’s 5-year bond yield dropped 8 basis points (bps), reaching a new 3-year low of 2.52%. This decline triggered a broad market selloff, with the TSX falling 1.54% (-391 pts) and the Dow dropping 1.48% (-649 pts). Additionally, the Canadian dollar weakened 0.26%, bringing it to 0.6906 against the U.S. dollar.
With 1.2 million mortgages set to renew in 2025, many Canadian homeowners will face interest rate adjustments, particularly those who locked in low fixed rates during the pandemic. RBC alone has $353 billion in mortgages maturing between 2025 and 2027, which could create financial pressure for borrowers.
Financial institutions are preparing for potential economic shifts. Scotiabank increased its provisions for credit losses (PCLs) to $1.2 billion, reflecting economic uncertainty. While the bank has accounted for modest tariff impacts, stress tests suggest the possibility of more severe scenarios. Chief Financial Officer Raj Viswanathan emphasized the current hesitation in borrowing decisions, particularly in commercial lending.
However, despite economic concerns, residential mortgage demand remains steady. Aris Bogdaneris, Group Head of Canadian Banking, noted that as interest rates have started to decline, pent-up demand in the housing market is becoming evident. He acknowledged that if American tariffs on Canadian goods are implemented, it could slow the mortgage market, but there is no current sign of reduced demand.
BC Speculation and Vacancy Tax: Important Update for Homeowners
We want to bring an important update to your attention regarding the Speculation and Vacancy Tax in British Columbia. All homeowners must register their property by April 1, 2024, even if they live in the home. Failure to register will result in an automatic 1% increase in property taxes in the next billing cycle. Homeowners can complete their registration online at gov.bc.ca/spectax.
Sincerely,
Michele, Mark and Eric
