Industry experts gathered at the Victoria Residential Business Association's annual Crystal Ball Housing Forecast, signaling a potential end to years of rapid development in Greater Victoria. The outlook suggests a significant slowdown in housing starts over the next two years, influenced by economic factors and policy changes.
Key Takeaways
- Housing starts in Greater Victoria saw a 20% jump in 2025, but demand slowed, leading to the highest unit vacancy rate since 1999.
- Unsold new units, primarily apartments, are at a 35-year high, impacting economic dynamism.
- Federal policies aiming to reduce non-permanent residents could further decrease demand.
- "Missing middle" housing construction is increasing but faces municipal obstructions.
- Home prices remained largely flat year-over-year in late 2025, with a slight decrease in detached home prices.
Economic Headwinds and Shifting Demand
Brendon Ogmundson, chief economist for the British Columbia Real Estate Association, noted that while 2025 began optimistically with strong demand for higher-density housing, sales plummeted in February due to tariff uncertainty. This led to a significant slowdown throughout the year, particularly in the Lower Mainland.
Despite a 20% increase in housing starts in Greater Victoria between January and November 2025, the unit vacancy rate climbed to 3.3%, the highest since 1999. Ogmundson highlighted that while the current level of active listings is considered healthy for long-term price stability, the accompanying weak demand is concerning. The high number of unsold new units, especially apartments, is at a 35-year peak and poses a challenge for economic growth.
Adding to the pressure, federal efforts to reduce the number of non-permanent residents are expected to impact both rental and buyer demand. Ogmundson predicts a "pretty significant slowdown in housing starts over the next two years," questioning the rationale for starting new projects when existing inventory remains unsold.
Obstacles to "Missing Middle" Housing
Casey Edge, executive director of the Victoria Residential Builders Association, pointed to an increase in "missing middle" housing, partly due to Bill 44. However, single-family home construction has declined by approximately 58% over the past five years. "Missing middle" housing constituted only 4.7% of total new housing in 2025.
Edge criticized several municipalities, including View Royal, Metchosin, Highlands, North Saanich, and Central Saanich, for continuing to obstruct small multi-housing developments through high fees and restrictive zoning bylaws. She also called out 14 Greater Victoria council members for approving increased development cost charges, suggesting that "anti-development councils should be contributing significant amounts towards DCCs" to offset costs.
Market Performance and Future Outlook
Royal LePage's fourth-quarter report for 2025 indicated a flat year-over-year aggregate home price in Greater Victoria, with a 0.1% decrease. The median price of a single-family detached home saw a 2.2% year-over-year decline to $1,246,200, while the median condo price rose by 1.2% to $527,100.
Edge emphasized the need for change, urging individuals with real-world housing expertise to consider running in the upcoming October municipal elections to better articulate industry challenges at the council table.
