People like to say that Victoria real estate is so expensive people can’t afford to buy.
Well, not everyone.
Some people not only can afford to buy local real estate, they can afford to pay for it in cash – with the number of those buyers rising.
Leo Spalteholz is an independent analyst who operates House Hunt Victoria. Spalteholz recently posted a chart showing that the number of Victoria cash buyers has soared to 32 per cent in 2023 from 19 per cent in 2020 (see the full numbers in the chart above).
“Big jump in cash buyers in Victoria this year, nearly a third of all transactions,” Spalteholz posted on X (formerly Twitter). “It’s not just that sales dropped and cash buyers remained. (The years) 2010-2014 we had similar sales, but much fewer cash buyers. Unclear if it’s wealthier buyers, or just buyers avoiding high-rate mortgages.”
Canadian mortgage rates have been steadily rising in 2023.
There were 2,699 active listings for sale on the Victoria Real Estate Board Multiple Listing Service at the end of September 2023, an increase of 8.4 per cent compared to the previous month of August and a 17.3 per cent increase from the 2,300 active listings for sale at the end of September 2022.
The Multiple Listing Service Home Price Index benchmark value for a single-family home in the Victoria core in September 2022 was $1,299,500, according to the latest numbers from the Victoria Real Estate Board.
The benchmark value for the same home in September 2023 increased by one per cent to $1,312,200, which is down from August’s value of $1,323,900. The MLS HPI benchmark value for a condominium in the Victoria core area in September 2022 was $581,500, while the benchmark value for the same condominium in September 2023 increased by 1.4 per cent to $589,600, which is up from the August value of $582,000.
Overall, a total of 493 properties sold in the Victoria Real Estate Board region this September, 20.2 per cent more than the 410 properties sold in September 2022 and a 9.4-per-cent decrease from August 2023.
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“That increase in inventory means there are more properties for prospective buyers,” Victoria Real Estate Board chair Graden Sol said. “More inventory also means buyers may have more time to shop, though in many of our local markets a well-priced property will sell rapidly, and we’re still seeing some multiple offer situations. The challenge of the day is that there are many buyers who hope to find homes in the missing middle – families who seek two- or three-bedroom homes at attainable price points – who are challenged by our current interest rate environment. Though housing prices have remained reasonably stable this year, the cost of carrying a mortgage has increased tremendously. This means that many first-time buyers and families are unable to purchase homes in our current market. With so many variables at play in each of the micro markets within Greater Victoria, it’s a good time to meet with your Realtor to discuss strategy if you are considering a move.”