Monthly Market Update - October 2024

Monthly Market Update

October 2024

After a sluggish summer, it's refreshing to see the real estate market gaining momentum once again. New listings are beginning to populate the marketplace, signaling a renewed influx of options for buyers. Additionally, consumer interest is steadily returning, reflecting growing confidence in the housing sector. As always, the key factors determining whether a home sells hinge on its price and condition, underscoring the importance for sellers to price their properties competitively and maintain them in top shape. This resurgence promises a more dynamic and balanced market, benefiting both buyers and sellers alike. The Canadian federal government has announced major reforms to make home ownership more accessible, particularly for first-time buyers and younger generations. The changes, effective in late 2024, also target investors in pre-construction properties, making it easier for them to secure financing.

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Introduction of 30-Year Amortizations for Insured Mortgages

Perhaps the most significant change is the introduction of 30-year amortizations for insured mortgages, a measure designed to reduce monthly payments and improve affordability. Beginning December 15, 2024, first-time home buyers will be eligible for 30-year insured mortgages on all property types, not just new builds. Investors in preconstruction homes will also benefit from this extended term.

According to a report by Edge Realty, the expanded amortization period is expected to reduce monthly payments by approximately 9% compared to the standard 25-year term, making home ownership within reach for more Canadians, especially in costly markets.

Increase in Insured Mortgage Cap to $1.5 Million

Another key reform is the increase of the insured mortgage cap from $1 million to $1.5 million, effective December 15, 2024. This adjustment is in response to skyrocketing home prices in cities like Toronto and Vancouver, where the average price of homes now exceeds $1 million. With this change, more buyers will qualify for an insured mortgage with a down payment of less than 20%, making home purchases more feasible in high-demand markets.

Real Estate Trends in the Victoria Core

In Victoria, these mortgage rule changes coincide with a softening in the housing market. According to the latest data from the Multiple Listing Service® (MLS®), the Home Price Index benchmark value for a single-family home in Victoria's core area was $1,316,100 in

September 2023. By September 2024, that value had decreased by 2.8%, settling at $1,279,700. For condominiums, the decline was even steeper, with the benchmark value dropping by 5.1% from $583,400 in September 2023 to $553,400 in September 2024. While these price drops may provide some relief for buyers, competition still exists, particularly for well-priced homes in desirable locations and in many instances we are seeing multiple offers again.

With the introduction of longer amortization periods, a higher insured mortgage cap, and more inventory, buyers now have more flexibility and a greater opportunity to achieve their homeownership goals.