Metro Victoria
Real Estate Trends and Price Forecast

HIGHLIGHTS

• Metro Victoria home values have been volatile since 2021. House and townhouse values have recently been flat, and apartment values are trending downward.

• While industry experts saw signs of improvement in late 2024, conditions have since deteriorated.

• Multi-factor analysis identifies Metro Victoria as a higher-risk real estate market.

• Mortgage rates have eased from their peak, but remain high relative to the 2010–2020 average, limiting buyer budgets.

• Economic uncertainty is rising due to Canada’s recent migration policy shift and the Trump administration’s tariffs, which could further weigh on the market.

This article covers:

1. What is the state of the Victoria property market?

2. Where are Victoria's prices headed?

3. Should investors sell?

4. Is this a good time to buy?

1. What is the state of the Victoria property market?

Overview of the Victoria Property Market

Metro Victoria is a region of 435 thousand people that is renowned for its mild weather and historical charm.

Victoria, BC, offers a distinct charm that draws people in, especially retirees. Here's a breakdown of why Victoria is attractive:

• Charming and Historic Atmosphere: Victoria boasts a distinctly British feel, with beautiful Victorian architecture, manicured gardens, and a slower pace of life. This creates a quaint and elegant atmosphere that many find appealing. Its historical significance as one of the oldest cities in the Pacific Northwest adds to its character.

• Mild Climate: Victoria enjoys a mild climate, with less extreme temperatures and few heavy snowfalls. This makes it particularly attractive to those seeking a comfortable year-round environment, especially retirees.

• Beautiful Gardens and Green Spaces: Victoria is known as the "City of Gardens," with world-renowned attractions like Butchart Gardens. The city is filled with parks, green spaces, and meticulously maintained flowerbeds, creating a visually stunning environment.

• Waterfront Lifestyle: Situated on the southern tip of Vancouver Island, Victoria offers easy access to the ocean. The Inner Harbour is a vibrant hub with boat tours, whale watching, and scenic walkways.

• Cultural and Recreational Activities: The city offers a rich cultural scene with museums, art galleries, theaters, and festivals. Outdoor activities are abundant, including hiking, cycling, kayaking, and golfing.

• Slower Pace of Life: Compared to Vancouver, Victoria offers a more relaxed and laid-back lifestyle. This is a significant draw for retirees seeking a peaceful and tranquil environment.

• Retirement Haven: The combination of mild climate, beautiful scenery, access to healthcare, and a slower pace of life makes Victoria a highly desirable retirement destination. It is a very safe city, which is also a huge draw for retirees.

• Capital City: As the capital of British Columbia, Victoria is home to the provincial legislature buildings, adding a sense of civic importance and providing access to government services and cultural events. This also provides many stable jobs.

However, it's important to note that Victoria is also an expensive city to live in, particularly when it comes to housing.

Overall, Victoria is a great place for people of all ages and backgrounds to live. It offers a high quality of life, a vibrant culture, and a strong economy.

For the time of year, supply levels are on par with previous years. Buyers and sellers should expect a market similar to 2024, albeit with lower mortgage rates.

Metro Victoria Detached House Prices

Since the peak in Spring 2022, house prices in Vancouver have resembled a roller coaster. The benchmark price fluctuated tens of thousands of dollars, up and down.

We believe politicians are hoping to guide the market toward a typical annual real estate cycle with price growth in the range of 1 to 3% annually – in line with income growth.

Demand in Metro Victoria is low. Many people want to buy a home, but affordability is very low, which is reflected in the number of successful purchases. Significantly fewer people can realize their homeownership dream in these market conditions.

New homebuyers can’t afford to get onto the first rung of the homeownership ladder, and high rates prevent existing owners from taking the next step. Fewer households that want to upgrade to a larger home can qualify for a new mortgage at the current rates.

Meanwhile, the total active listings are trending upward. They are at their highest level in three years.

Metro Victoria New Construction Home Prices

Prices of new homes have been falling. With the drop, some homebuyers might find they will have paid much more than the most recent buyers in their development. Based on economic fundamentals, they will likely continue to drop.

Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes

Market Risk

Based on Mortgage Sandbox Analysis, Victoria is at moderate risk of a significant market correction.

Metro Victoria Condo Prices

Metro Victoria's benchmark apartment price is trending downward.

Purchases are picking up, but the increased demand is not keeping pace with sales listings. Active listings are higher than in the last three years.

With more people working-from-home, we expect developers will begin marketing larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.

At Mortgage Sandbox, we would like developers to build 4 and 5 bedroom condos because:

• Not everyone can afford to buy a house for their family.

• Canadians who now work from home need more room to segregate workspace from living space within their homes.

• Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

• Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Metro Victoria Townhouse Prices

Still a challenge for first-time homebuyers

Metro Victoria's home prices are not very affordable. A homebuyer household earning $70,000 (the median Metro Victoria household before-tax income) can only get a $250,000 mortgage. For a homebuyer to purchase a benchmark priced condo, they would need to save hundreds of thousands for a down payment or receive a very generous gift from family. For most people, that is just not possible.

What about the rest of BC?

Read the Vancouver Home Price Forecast and Okanagan Home Price Forecast.

2. Where are Metro Victoria home prices headed?

There is a lot of uncertainty in the forecasts for looking out toward 2027. Many of the forecasters we've surveyed have different expectations for:

• Will the federal government’s recent migration policy pivot lead to a shrinking population?

• Will mortgage rates drop to the 2 to 3 percent range that Canadians have grown used to?

• Will Trump impose a 25% tariff on Canada, leading to a trade war and recession?

How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.

At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms. We then present the most optimistic estimates, the most pessimistic prediction, and the average forecast.

Would you like to learn more about real estate risk? We've written a comprehensive report explaining the uncertainty level in the Canadian real estate market.

Our forecast inputs:

• CMHC Housing Outlook

• Fitch Ratings Global Housing Forecast

• Reuters Housing Forecast Poll

• Royal LePage House Price Forecast

• RE/MAX Housing Market Outlook

• Canadian Real Estate Association Quarterly Forecast

• RBC Home Resale and Price Forecast

• TD Bank Economic Housing Outlook

• BMO Housing Outlook

• C1 Central 1 B.C. Outlook

• BC Real Estate Association Forecast

3. Is it a good time to sell a home in Victoria?

From a seller’s perspective, more changes in the market influence prices downward, so this year may be a better time to sell than in two years. Remember that the house and apartment markets are on different trajectories too.

The annual real estate cycle usually favours sellers in the first half of the year.

Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check out our Complete Home Seller’s Guide.

4. Is this a good time to buy a Victoria property?

Prices have been flat or falling, and supply is higher than during the pandemic. Mortgage rates are relatively high and falling. Also, the annual real estate cycle usually favours buyers in late summer and autumn.

These factors would lead buyers to conclude that later in 2025 or 2026 will be a better time to buy than now.

It's almost impossible to time the market perfectly. However, if you are buying your forever home and don't plan to sell for ten years, the risks of buying now are lower than a year ago.

If you are considering buying, be sure to drive a hard bargain and pay as close to market value as possible. Also, don't bite off more than you can chew when it comes to financing.

Planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

Here are some recent headlines you might be interested in:

• Canada housing market unlikely to surge despite plunging interest rates (MPA | Mar 14)

• Millennials, gen Z in 'Goldilocks moment' to jump on Canada's property ladder (Financial Post | Mar 12)

• Bank of Canada cuts interest rate to 2.75% as country faces 'new crisis' from tariffs (CBC | Mar 12)

• Tariff worries push B.C. housing market lower amidst big sales drop (Urbanized | Mar 11)

• Vancouver home sales fall as market conditions more balanced in February: board (CTV News | Mar 04)

• Opinion: How U.S. tariffs could shake up B.C. real estate (VIA | Feb 16)

• B.C. real estate sales off to a stronger start in January 2025 (CTV News | Feb 13)

• Housing market faces “uncertainty” amid economic and geopolitical shifts: CMHC (REM | Feb 10)

• Trump tariffs like 'sword of Damocles' hanging over Vancouver real estate (BIV | Feb 07)

• Vancouver real estate market shifting as more sellers enter market, January sales up (CBC | Feb 05)

• How a trade war and U.S. tariffs could hit Canada’s housing market (Global News | Jan 29)

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