The Victoria real estate market is a dynamic and ever-evolving landscape, where supply and demand play a crucial role in determining property prices and market stability. In August 2023, the Victoria Real Estate Board reported 13.8% more property sales compared to the same month in 2022, signifying continued interest in the region’s real estate market. However, beneath the surface, there’s a pressing issue that needs attention: the need for a more balanced mix of housing supply to restore equilibrium. Keep reading for the full Victoria Real Estate Market August 2023 Update.
Sales Statistics: A Glimpse into the Market
During August 2023, 544 properties changed hands in the Victoria Real Estate Board region. While this number represents a 13.8% increase from August 2022, there was an 8.6% decrease from the preceding month, July 2023. The real estate market often experiences fluctuations during late summer, but the recent surge in sales suggests that this trend might carry into September.
Notably, the condominium market witnessed a significant uptick, with a 10.8% increase in sales compared to August 2022, totaling 164 units sold. Single-family homes also saw growth, with a 9.6% increase in sales compared to the same period last year, totaling 273 units sold.
Supply Imbalance: A Cause for Concern
While the sales figures show promise, Victoria’s real estate market is facing a critical issue related to housing supply. At the end of August 2023, there were 2,490 active listings for sale, marking a 2.9% increase compared to July and a substantial 16.5% increase from August 2022. Despite this increase in inventory, the market is far from achieving balance.
Victoria Real Estate Board Chair Graden Sol emphasized the urgency of addressing this supply issue, stating, “The focus in our market and by all levels of government needs to be on opening up more supply.” While the number of listings has risen, it remains significantly lower than the levels seen a decade ago when over 5,000 active listings were available in August.
Another critical aspect of this supply challenge is the composition of available housing. The majority of residential properties for sale are single-family homes, which tend to be at the top end of the price spectrum. These properties cater to a specific market segment, leaving a significant gap for “missing middle” homes such as townhomes and condos.
In August 2023, townhomes and condos comprised only 37.1% of the listings for sale. Townhomes, in particular, which are often sought after by families, represented a mere 9.8% of the residential properties available. This lopsided mix of housing options can lead to increased price pressure on these more affordable property types due to concentrated demand.
Price Trends: A Reflection of Supply and Demand
The Multiple Listing Service® Home Price Index provides further insight into the market. In August 2022, the benchmark value for a single-family home in the Victoria Core was $1,327,700. By August 2023, this benchmark value had dipped slightly by 0.3% to $1,323,900, though it was up from July’s value of $1,318,800. Similarly, the benchmark value for condominiums in the Victoria Core area was $583,700 in August 2022, but it decreased by 0.3% to $582,000 in August 2023, despite a slight increase from July’s value of $578,000.
These fluctuations in benchmark values underscore the impact of supply and demand dynamics on property prices. Without a more balanced mix of housing supply, the market risks ongoing price volatility that can limit accessibility to homes for many potential buyers.
Conclusion: A Call for Action
The Victoria real estate market continues to show resilience and attractiveness to buyers. However, achieving a healthy and balanced market requires addressing the pressing issue of housing supply and the skewed mix of available properties. To ensure affordability and accessibility for a broader range of buyers, stakeholders at all levels must collaborate to create a more diverse and robust housing inventory.
As Victoria navigates its real estate landscape, finding innovative solutions to this supply challenge will be essential for maintaining a thriving and sustainable market that benefits both buyers and sellers alike. Only through a concerted effort to broaden the housing mix can Victoria’s real estate market truly find its equilibrium once more.