Market Intelligence - June 2023

June 2023

UNSTOPPABLE FORCE, IMMOVABLE OBJECT.

Once again, this past May, the Victoria real estate market has been a focal point for both local and national investors, continuing to exhibit robust signs of growth. Our May 2023 sales surpassed those of May 2022 by 1.8% and up 22% from April 2023. To date, sales in 2023 have continuously climbed higher with the help of consumer confidence remaining steadfast and, by our estimates, the outlook continues to be very positive.

The theme of our current market remains our level of inventory, or lack thereof. This absence of adequate housing opportunities remains a major issue in the market, an issue compounded by the number of homeowners waiting for product to appear that meets their needs. The housing supply has created a “log jam” scenario; homeowners are hesitant to list their properties for sale because of the difficulty of finding suitable replacements. Consequently, there’s a substantial accumulation of off-market inventory awaiting the right moment to list.

This market bottleneck has led to the return of a particular style of offer; many offers are now contingent on the buyer’s ability to sell an existing property. This arrangement is predominantly because of the housing shortage, which is rapidly devouring any new listings, maintaining our absorption rates at low levels. Even with this shortage, our real estate market continues to support high prices with little sign that numbers will slide. Although we are seeing a slight decrease compared to the same time last year, the market remains stable, reinforcing that now is the best time to list properties. The favourable weather and low competition create a tempting environment for sellers.

Multi-Family homes are witnessing a significant bump in activity, with townhouses and condos becoming the gateway for many into the housing market. This is true of first-time buyers who are finding the price range of single-family detached homes in Victoria out of reach. Additionally, the removal of rental restrictions for Strata property and our current historically high rents offer an appealing opportunity for investors. With these changes, virtually any property can become an investment vehicle.

Today the Bank of Canada raised interest rates a quarter point, however most analysts feel lenders have already factored this new rate into fixed-

Number of Sales

rate mortgages and only those in a variable rate product will be impacted. Most in the industry believe that despite this rate-hike, it’s unlikely to dampen the market. After all, the Bank of Canada telegraphed the recent hike as inevitable.

Overall, the economy continues to support our vibrant real estate market, with robust growth and low unemployment levels. The ongoing rollback to aspects of the Foreign Buyer’s ban by the federal government is opening up new avenues for investment. Now, foreigners on work permits can purchase properties, and vacant land is also open to foreign investment.

The real estate market in the Greater Victoria Area remains a dynamic and resilient sector. While there are challenges with inventory, this also opens up unique opportunities for both buyers and sellers. With the continuation of favourable economic conditions, it’s reasonable to expect the market to remain steadfast for the foreseeable future.

Being a part of our boutique brokerage means benefiting from the strength of the whole. It means coming together with fellow real estate professionals who are constantly rethinking industry norms and pushing themselves further through technology, design and service.

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