Winter real estate market wraps with improved consumer confidence and more stable pricing

A total of 460 properties sold in the Victoria Real Estate Board region this February, 35.9 per cent fewer than the 718 properties sold in February 2022 but a 65.5 per cent increase from January 2023. Sales of condominiums were down 39.7 per cent from February 2022 with 161 units sold. Sales of single family homes decreased 28.8 per cent from February 2022 with 220 sold.

“Last month we talked about the optimism building in the local market that our REALTORS® saw, and now we can see it in the market statistics,” said Victoria Real Estate Board Chair Graden Sol. “We can confirm the return of buyer confidence by the increase in sales through the late winter. The market is seeing some positive headwinds as we move into springtime, which is traditionally the busiest market for home sales. Inventory levels are starting to increase, a welcome trend when compared to the record lows of last year. We’re also seeing a stabilization at some price points and properties that are priced in accordance with current market conditions are selling at a good pace.”

There were 1,809 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of February 2023, an increase of 4 per cent compared to the previous month of January and a 113.1 per cent increase from the 849 active listings for sale at the end of February 2022. 

“The market today is different than we have seen in recent years,” adds Sol. “There’s plenty of demand from buyers, and we are still low in inventory, but there are opportunities in a less pressurized environment for consumers to get into a new home. Most buyers will find they have more time to view homes, make decisions and do their due diligence in this somewhat more relaxed market. Of course, we are heading into a new season which is typically very active. The statistics in this report reflect what happened last month. Prudent buyers and sellers will seek the knowledge of their Realtor to determine the up-to-the-minute conditions and how to best navigate the market.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in February 2022 was $1,321,400. The benchmark value in February 2023 decreased by 5.6 per cent to $1,247,200, down from January’s value of $1,251,100. The MLS® HPI benchmark value for a condominium in the Victoria Core area in February 2022 was $580,900, while the benchmark value in February 2023 decreased by 2.2 per cent to $568,200, down from the January value of $578,300.

Pre-purchase implications:

1. Additional property transfer tax for foreign entities and taxable trustees
2. Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyers Ban)
3. Anti Flipping Tax rule ( general information only )
4. No age restriction in strata corporations except 55+ (applicable to renters as well)
5. No long term rental restriction in strata corporations (except short term rentals if municipal or strata bylaws prohibit)
6. Home Buyer Rescission Period Regulation

 After purchase implications:

      7. Speculation and Vacancy Tax (provincial) 

      8. Underused Housing Tax (Federal)

If you have any questions, please feel free to give us a call.

Happy New Year to all of our valued clients. While it may not come soon enough for some of us, we can view the end of this volatile year with a boost of optimism. 

In order to manage inflation, the federal government has implemented several interest rate increases this year, which has created challenges when valuing a property in today’s market. Pricing competitively has become much more important when listing your home, as the sellers’ market has eased. It is once again more common to negotiate a purchase or sale with both parties involved, rather than entertain a one-sided ‘demand’. 

Real Estate economists are suggesting that the increase in interest rates will have a shorter life than previously anticipated; the most recent hike to 4.25% is considered by many to be the last one required to help curb inflation. This will open a window of opportunity for our clients to search a larger inventory, which is likely to appear in the new year. We have also seen an increase in the number of blended families purchasing properties, for example, adult children purchasing with parents to decrease the burden of a down payment or to reduce the qualifying challenges faced by a number of first-time buyers.

Along with the optimistic outlook for 2023, we also want to announce the opening of our new office "Open Doors Victoria Real Estate Group” located within our head office of Pemberton Holmes, located at 150-805 Cloverdale Ave. Our team is ready, and we look forward to assisting our many clients with all of their real estate needs. 

Happy Holidays to each of you and here’s to a Fantastic New Year!

Cheers,

Greg, James, Tim & Marilyn.

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