According to the recent National Bank of Canada’s Housing Affordability Report, Victoria, Toronto and Vancouver rank as the three most expensive cities in Canada to purchase a home.
In Victoria, the average detached home now costs over $1.4 million — meaning you would need an annual household income of $176,000 and have to save for over 20 years to purchase a home. For a condo with an average price of $570,000, a buyer with an annual household income of $108,000 would need to save for almost four years.
The current market in a nutshell: For better or worse, the British Columbia housing market is on the rise.
This year has seen several months in a row of increased home sales and rising prices in the province. Since June 2022, B.C.’s average residential price has risen more than 20 per cent to $991,648 (both single-family and condos).
While high interest rates helped bring prices closer to earth toward the beginning of 2023, low supply is helping push them right back up.
What could be coming: First-time buyers in Victoria could be in store for a frustrating short-term market. If the economy tips into a recession and fixed mortgage rates remain uncertain, it may likely entice more buyers into the market to battle it out over fewer properties.
In cases like this, people can feel pressured to buy a home before prices fully rebound. Ironically, the competition this creates tends to push prices even higher.
What buyers can do: In addition to pouncing on lower fixed rates, homebuyers can also improve buying power by decreasing their total debt service ratio — the percentage of annual income required to cover all other debts and loans. Lowering the TDS can encourage lenders to loan more money or offer more competitive interest rates. It’s a tough ask with inflation being as high as it is, but paying off credit cards and loans before starting the mortgage process can make buying a home a lot easier.
Another step to consider is getting pre-approved for a mortgage now rather than waiting for the market to heat up. Once you’re pre-approved, you’ll be able to make an offer sellers can put some faith in.