Victoria Market Overview - Sales increased in October from a very slow September but things are slowing down again in November. We are still very much at an inventory level where the market is sensitive to any amount of buyers participating or abstaining from it. If we were at more historic inventory levels the relatively small amount of buyer activity in either direction would have less of an impact. While we might not be at “historical” inventory levels, the number of listings on the market has basically doubled in the last 12 months and buyers have more options than they have had in the last few years. It is worth pointing out that while things are slow, it's not dead. Properties that are priced properly aren’t going in 10 offers but they still might go with 3.
Getting into the numbers - There were 480 sales in Victoria in October which was 35.6% less than the same month last year but up 17.1% from September (again September was uncommonly slow). Of those 480 sales, 230 were single-family homes, 32.2 less than last year, and 152 were condos which were 39% down from last year.
As for inventory, there were 2,192 active listings on the market at the end of October, 4.7% less than at the end of September and up 111.6% from September last year (1,036 at the end of the month). It is not unusual for inventory to drop in the fourth quarter reaching a low in December before building again in the new year. Further to this, many sellers may decide to remove their home from the market over the Christmas season and relist in the spring.
Considering price - Benchmark Home Price Index (HPI) prices for a single-family home in Victoria core peaked in June (HPI is always delayed from the actual peak which was in March) at $1,464,400. Since then it has decreased by 8.4% to come to $1,341,400 at the end of October (also a 1.7% decrease from September). Compared to last year, the benchmark value is still 10.2% above what it was at the end of October 2021. Condos in the core also peaked in June and have decreased from their previous high of $649,100 to come to $602,700 in October (a 7.1% drop). Condos have better retained their year-over-year value, staying up 14.9% over their prices from 12 months ago.
Basically, the average price point is remaining strong in Victoria and though the low buyer activity should indicate more significant price drops, the inventory levels are still fighting that drop.
Looking forward - In the immediate future, we are likely to see a continued slowing as we grow closer to December. The first few months of the new year will illuminate the new ground and give us a much better idea of what 2023 will look like. The greatest factor by far will be what mortgage rates do in the near future. In government efforts to cook the economy, the Bank of Canada rate is expected to top out around 4.25% by the end of the year and then hold there through 2023 before starting to drop to lower rates in 2024. With ongoing and even increasing immigration from other provinces and outside of Canada, there is expected to be continuing low inventory and pressure on prices. The current trend sees declining prices with interest rates up, inventory up from all-time lows and sales down. We suspect more buyers will come out of the woodwork in the new year.
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