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Greater Victoria housing prices rise in 2022 despite Canada seeing a decline

Local real estate officials talk about region’s sales, supply and housing forecast
The Victoria area saw average adjusted housing prices rise by 2.3 per cent while Canada saw a 12 per cent decline from 2021 to 2022, the Canadian Real Estate Association said on Jan. 16. (Jake Romphf/News Staff)

Housing sales were raging in Greater Victoria to start 2022 with little inventory and homes getting snapped up after just days on the market.

But local real estate officials who met with peers on Monday (Jan. 16) see a market nearing balance again while prices stay historically high.

Canadian Real Estate Association figures released Monday show Victoria’s Home Price Index – which gives a more robust picture of the typical home countrywide – rose by more than two per cent while the national average fell by 12 per cent. That translated into the region’s typical home being about $8,000 more in 2022 than it was the previous year.

“In 2022, we saw one of the biggest single-year shifts on record in Canadian housing activity, from record highs last winter to just below the 10-year average to end the year,” said Jill Oudil, chair of CREA, in a release.

Graden Sol, chair-elect of the Victoria Real Estate Board, said consumer confidence goes down in an environment where they’re being hit by a “knockout punch” with every interest rate hike. Those increases were the story of 2022, he said, as sales continually fell with the rate increases after the early-year boom.

“So every time a buyer comes back out for a breath after an interest rate hike, they get knocked back down,” Sol said.

Twenty-two per cent of all local sales were first-time homebuyers, ones Sol said are going to get beat up the most by rate hikes.

He said Langford got the message on currently lacking missing middle homes as the city saw the region’s greatest volume of townhome sales in 2022. That comes as couples with kids made up the largest buyer group, at 29 per cent, in Greater Victoria.

“Affordability is key and of course what does affordability mean to different people,” Sol said. “Right now, people say, ‘Oh you know housing prices are down,’ and I’m like well they kind of aren’t.”

The region’s realtors see about 3,000 listings as a healthy level, but it’s only been around 2,200 and that plummeted to just around 500 at one point last year.

“We probably in Victoria had the worst supply situation maybe in Canada,” Brendon Ogmundson, chief economist at the B.C. Real Estate Association, said of 2022’s low points. “We’re just getting back to very low pre-pandemic levels, let alone back to where we were with a healthy amount of supply (around a decade ago).”

He forecasts housing sales returning to around 2019 levels this year, but that’s contingent on a number of economic unknowns around interest rates, inflation and whether a slowdown causes a recession – despite the current strong job growth and near record-low unemployment.

Ogmundson also said the federal government will need to have robust housing plans that aligns with its planned increase in immigration.

Pershing Sun, a senior analyst at the Canadian Mortgage and Housing Corporation, said local buyer preference cooled on high-priced detached homes last year, while interest and mortgage rates meant people in Greater Victoria were more likely to go with a condo when they normally would’ve chosen a townhome.

Housing construction costs have also been growing in general, with Sun highlighting how the province’s industry sees consistently higher job vacancies compared to Canada and Alberta – and noting the latter pays those workers better than B.C does.

A few speakers joked about measures prohibiting foreign buyers from scooping up homes as they made up under two per cent of those purchasing.

READ: B.C. to overhaul approval process for building houses in hopes of increasing supply Follow us on Instagram.
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Jake Romphf

About the Author: Jake Romphf

In early 2021, I made the move from the Great Lakes to Greater Victoria with the aim of experiencing more of the country I report on.
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