Real estate professionals gathered at the Victoria Residential Business Association's annual Crystal Ball Housing Forecast, anticipating a significant slowdown in Greater Victoria's once-booming housing market. The event, held at the Gorge Vale Golf Club, brought together contractors, realtors, designers, and suppliers to discuss emerging trends and challenges.
Key Takeaways
- A notable increase in housing starts in Greater Victoria during 2025, coupled with the highest vacancy rate since 1999, signals a market shift.
- Unsold new units, primarily apartments, have reached a 35-year high, impacting economic dynamism.
- Federal policies aimed at reducing non-permanent residents are expected to further decrease demand.
- Obstacles such as rising development charges, regulations, and municipal delays are projected to curb housing starts over the next two years.
- While 'missing middle' housing is seeing some growth, single-family home construction has significantly declined.
- Calls for greater municipal accountability and the election of housing-expert councillors are being made.
Economic Headwinds and Market Shifts
According to Brendon Ogmundson, chief economist for the British Columbia Real Estate Association, the optimism at the start of 2025, fueled by strong demand and a return to average home sales, was short-lived. Uncertainty stemming from tariffs in February led to a sharp decline in sales across British Columbia, particularly in the Lower Mainland, with the market struggling throughout the year.
Despite a 20 percent jump in housing starts in Greater Victoria between January and November 2025, according to the Canada Mortgage and Housing Corporation, the unit vacancy rate climbed to 3.3 percent, the highest since 1999. This indicates that demand has not kept pace with supply.
Inventory and Economic Concerns
Ogmundson noted that the current level of active listings on the resale market is considered healthy for the long term. However, he expressed concern over the high number of unsold new units, predominantly apartment units, which represent the highest level in 35 years for Greater Victoria. This situation is seen as detrimental to the slow-growing B.C. economy, hindering investment and job creation.
The federal government's efforts to reduce the number of non-permanent residents are also expected to impact the housing market by decreasing both renter and buyer demand.
Municipal Challenges and Housing Solutions
Casey Edge, executive director of the Victoria Residential Builders Association, highlighted the rise in 'missing middle' housing, partly attributed to Bill 44. However, single-family home construction has seen a substantial decrease of approximately 58 percent over the past five years. Edge pointed out that while 'missing middle' housing constitutes a small percentage of new housing, municipal zoning bylaws, high fees, and setbacks continue to obstruct its development in some areas.
Specific municipalities, including View Royal, Metchosin, Highlands, North Saanich, and Central Saanich, were called out for not adequately supporting housing development. Edge also criticized the Capital Regional District water commission's decision to add significant development cost charges, urging that "anti-development councils should be contributing significant amounts towards DCCs." He stressed the need for individuals with real-world housing expertise to consider running in the upcoming municipal elections to address these issues.
Housing Price Trends
Royal LePage's fourth-quarter report for 2025 indicated a flat year-over-year aggregate home price for Greater Victoria, with a slight decrease of 0.1 percent. The median price of a single-family detached home saw a 2.2 percent year-over-year decline to $1,246,200, while the median price of a condo unit increased by 1.2 percent to $527,100.
