Victoria Real Estate

News and Forecast

Victoria, BC


  • Victoria house prices surged upward this Spring after 6 months of price drops but, like 2018, the price increases may not extend into the summer.
  • Victoria condo and townhouse prices have been flat for over a year now.
  • The average Victoria household still can not afford current house prices and unusually high house prices ($200,000 more expensive than 2016) are the greatest factor making homes unaffordable.
  • Metro Vancouver and the Okanagan have been hit hard by a real estate slow down. The number of Victoria purchases-sales dropped too but prices haven't been as severely impacted.
  • Foreign speculative investors are leaving B.C. and prices are now more closely linked to local economic fundamentals.

Compared to a year ago, Victoria house prices are lower while condo and townhome prices are up slightly. At this point, considering price trends in Metro Vancouver and the Okanagan, it seems likely that Victoria home prices will drop in the near to medium-term.

Some people blame higher interest rates and tighter mortgage rules for the weaker market, but these arguments don’t hold much weight. Mortgage rates are still at rock-bottom lows and the market weakness began in 2016 when foreign buyer taxes came into effect rather than in 2018 with the introduction of the stress test. Victoria and B.C. house prices have primarily weakened because foreign direct investment has shifted to Toronto and Ottawa.

This article covers:

  1. Where are Victoria prices headed?

  2. What are Purchase and Listing Trends ?

  3. Should investors sell?

  4. Is this a good time to buy?

1. Where are Victoria prices headed?

Home Price Overview

The good news (for buyers) is that prices may be dropping in Victoria, but the not-so-good news is that prices are still beyond the reach of a median Victoria household.

Victoria Detached House Prices

Since the peak in 2018, Victoria house prices dropped and then recovered, but still remain below their peak price. As the market heads into the Summer and Fall, we expect a return to price reductions.

From the beginning of 2016, benchmark Victoria house prices climbed $200,000 to a peak of $770 thousand. House prices subsequently dropped $35,000 by early 2019 and then recovered. It’s still too early to tell but prices are tipping downward again as we head into the slower Summer and Fall markets. Victoria house prices are surprisingly volatile. If you’re looking to buy or sell your home in the next three years, you should definitely pay close attention to recent trends with fewer buyers and more homes for sale.

Metro Vancouver is still the hardest hit population center in BC. Prices there have dropped $200,000!

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In Victoria, condos and townhouses have made the most money

Victoria condo prices have skyrocketed to an April 2018 price near $500,000. The current record price is only slightly higher. In the past year condo prices have “teetered” and it’s not clear whether they will continue upward or tumble instead. Considering price drops in Vancouver and Kelowna it seems likely that Victoria will follow. If prices fall, it is good news for first-time home buyers. The benchmark Victoria condo is almost affordable without help from the bank of mom and dad.

Victoria townhouse prices are headed in the same direction as condos. Since house prices have dropped while townhouse prices only leveled off, the gap between the two has narrowed. For townhouse owners seeking to upgrade to a full house, this could be a great opportunity.

Still a challenge for first-time home buyers

Although Victoria home prices have cooled off they are still not very affordable. To put this into perspective, a first-time home buyer household earning $75,000 can only get a $320,000 mortgage. This makes it painfully obvious that to buy an entry level $500,000 condo, a first-time home buyer needs to save a $180,000 cash down payment or receive a very generous gift from mom and dad. For most people, that’s just not on the cards.

Victoria, BC Housing Affordability Calculations

Interested in other areas of BC? Try these reports!

Metro Vancouver

Okanagan Valley

2019 Metro Vancouver House Price Forecast

Most analysts expect Victoria prices to stay flat in 2019 or drop 1%. We at Mortgage Sandbox expect Victoria prices to drop 1% to 5% by the end of 2019.

2. What are Purchase and Listing Trends?

Trending Toward a Balanced Market

What does this mean exactly? Well, the market for all homes (detached, townhome, condo) are all trending toward a position where buyers have equal power to sellers. The positive outcomes for buyers are lower prices, more selection, fewer bidding wars, and ultimately a little less stress.

The markets are not officially made it to full-blown balanced market though. While the market is trending balance, it’s currently in a seller’s market (i.e., sellers still have a negotiating advantage). Take note that as supply has increased, Victoria home prices have dropped. This means that the current Victoria home prices may be unsustainable in a healthy balanced market. So, if new construction completions later this year push the market into balance or a full-blown buyer’s advantage then we could see major prices discounts in 2020. Yay for first-time home buyers!

Fewer buyers – No longer a foreign investment hot spot

2019 has been a slow year for condo purchases, which is certainly not something we’re used to seeing. In the BC Lower Mainland, Richmond, the Vancouver Westside, and West Vancouver have seen the most dramatic falls in purchase and sales. Our research suggests that foreign buyers are moving on to other cities and countries. These days Toronto, Ottawa and Montreal are becoming more popular.

The number of Victoria houses sold is trending slightly below past years while the number Victoria houses listed for sale has been trending a little higher than past years. Over time, these trends of lower demand and higher supply lead to reduced prices.

In contrast, the number of Victoria condo and townhouse purchases (sales) have been more consistent with previous years BUT we are seeing dramatically higher active listings. Basic economic theory tells us that we can expect this to lead to condo and townhouse price reductions.

People buying condos intending to rent them to students are taking on some risk since the BC Government is planning to fund construction of more subsidized student housing on university campuses like the University of Victoria. The risk is somewhat mitigated because those student residences will take several years to be built.

Our platform matches you with local, pre-screened, values-aligned Realtors because shared values make better working relationships.

Causes of the slowdown

At Mortgage Sandbox, we break down our market analysis to five key forces: affordability, capital flows, government policy, supply and popular sentiment. We’ve completed a full analysis if the impact of these factors on Metro Vancouver and Victoria is facing a similar situation. Read the full report to understand how these factors are affecting prices.


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3. Should Investors Sell?

From a seller’s perspective, now is a better time to sell than in two years as CMHC, a Government of Canada Agency predicts that house prices will be flat or drop for the next two years.

To benefit from the best-case scenario, a home buyer should talk to their mortgage broker about prioritizing flexible loan conditions and mitigating risk. Find out more about the benefits of a mortgage broker.

Potential for a highly supplied market

There’s potential for an overwhelming surge in supply and this would bring more downward pressure on prices.

In February 2019, 6,100 homes were under construction in Metro Victoria (1,800 in the City of Victoria). These homes will be completed in 2019 and 2020. If a significant number of those homes were pre-purchased with the intention to flip them, they could bring a ton of supply to the market.

Our platform matches you with local, pre-screened, values-aligned Mortgage Brokers because shared values make better working relationships.

4. Is this a good time to buy?

With buyers gaining negotiating power, 2019 is a good time to buy. However, 2020 may be even better.

If you are thinking of buying just be sure to drive a hard bargain, and cover your bases with smart and educated decisions. Don’t bite off more than you can chew.

Buying a home is a big decision, so check out Mortgage Sandbox’s Canadian Home Buyer Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

Where will mortgage rates be by 2021?