In Greater Victoria, the real estate market this past year was marked by undersupply, stagnation in certain segments and, luckily, promising growth in others. Here, we look at what happened in 2023 in presale and resale and, most importantly, what we can expect in the coming year.
Greater Victoria Presale Market: What We Saw In 2023
The presale market in Greater Victoria saw a total of 12 project launches, introducing 797 new units. The nine wood-frame launches of a total of 543 units and three townhome launches of a total of 254 units had a collective absorption rate of 45%, leaving 55% of the released product remaining to be sold in the new year. The Westshore region emerged as the leading presale market in the region, accounting for nearly 80% of this new inventory. Saanich also saw considerable activity with four new condominium developments. The attention in the two areas can be partially attributed to the typical presale purchaser profiles of young couples and local investors, both of whom wish to tap into the significant urban renewal occurring within these communities.
Comparatively, the city of Victoria itself witnessed no new project launches. This is indicative of the challenges Victoria is facing in bringing new developments to market. Factors like restrictive zoning policies, a local preference to maintain the historical character of the city, and the high cost of land and construction have contributed to a stagnant market scenario. This stagnation has been a major obstacle in addressing the critically low supply that has characterized the area’s market in recent years.
Significant Approvals And Developments
Despite these challenges, the past year saw key projects receiving approval, signalling a potential shift in the market dynamics. Starlight Investments' Harris Green Village is the most notable and ambitious project, set to bring over 1,500 rental units in three phases. Chard's redevelopment project at Douglas and Caledonia has proposed a mix of 451 rental and market condo units. These developments are a crucial step towards revitalizing the housing market in Victoria, indicating a potential positive trajectory for the years ahead.
Residential Resale Market: More Supply, More Demand
The resale market in Greater Victoria remained tight, despite a great improvement in supply conditions. Starting with over 1,700 active listings, the market experienced nine consecutive months of increasing supply, aligning more closely historic norms. However, despite rising levels of supply, the sales-to-listings ratio peaked at 35% for all product forms in May, reflecting continued tight market conditions.
Systemic challenges, such as low supply and minimal development, have been the mainstay of the market over the last three years. As interest rates stabilize, we anticipate a resurgence from pent-up demand, which will likely support both prices and sales activity moving forward.
Looking towards 2024
As we project into the next year, the developments approved in the past year offer a beacon of hope for a more dynamic Victoria market. However, the systemic challenges of under-supply and under-development remain key factors.
Coming Soon: MLA Intel 2024 Our yearly report, MLA Intel, will be released later this month with expanded information on the Victoria market, and the rest of British Columbia, and a deep analysis of the real estate landscape for the coming year. Keep an eye out at mlacanada.ca or sign-up for Newswire to be the first to read the soon-to-drop report.