The Q Report – Q2 2024


Welcome, valued readers, to our mid-year 2024 Q Report. Fergus is away enjoying a well-deserved holiday far out of mobile service, so you’ll have just half the usual dazzle this time around from just half of The Q Report team. 


The Market Waits on Rates 

  • The biggest story in the capital region’s housing market continues to be the Bank of Canada’s stance on interest rates, and inflation’s influence on the cost of borrowing. 
  • As we’ve discussed in The Q Report before, one of the largest weights in the consumer price index (CPI) — which measures inflation — is housing cost: rents and mortgages. In addition to mortgage rates at 20-year highs driving up the housing category, rents have climbed nearly 9% Y/Y — the worst in four decades.
  • If you’re wondering why housing costs exploded post-pandemic, the market law of supply and demand provides an explanation. Below is the Y/Y % change of rents correlated with the Y/Y % change in population:
  • Our last Q Report pointed out that CPI minus shelter cost shows that inflation is already well under control, below the BoC’s 2% target. Even with housing costs included, inflation has been within the BoC’s target range of 1-3% for months — just not at that 2% centre point of the range:
  • But expect the loosening cycle will still be slow and cautious — likely a 25bps cut every other meeting through 2024 and into 2025. 
  • The ever-popular five-year fixed rate is largely set on market sentiment because it is tied to the bond market. Borrowers taking a fixed rate today are actually already enjoying the outcome of rate-cut sentiment, while variable rate borrowers are signing on for rates a full 100+bps higher than the fixed option, waiting to see the cuts actually materialize and turn into savings. 

  • Will fixed rates come down? 
    • Historically, the spread between the BoC’s overnight rate and the five-year fixed is around 200bps (or 2 percentage points):
  • Current five-year rates are very close to the overnight rate. Economists are forecasting a steady decline in the overnight rate, however it is widely expected that fixed rates won’t go down in lockstep over the coming year as that historical 200bps spread is re-established:
  • Herein is one of the major factors dragging on the housing market in 2024: the reality is finally setting in that rates are not going to return to anywhere near where they were during the pandemic anytime soon (or possibly in our lives), after a year-long news cycle that has largely focused on when and how far rates are expected to fall, after one of the most aggressive rate hiking cycles in Canada’s history. 
    • Polling conducted by the Globe and Mail shows that many aspiring home buyers are awaiting further rate cuts to feel more confident about their financial picture. One cut does not make a trend. 
    • The Nanos Pocketbook Index, which tracks Canadians’ confidence around their personal finances, recently fell to its lowest level — 50 points — the same low it hit in April 2020. For those aged 18-29, the news was even worse, with the index plummeting to 40 points, the lowest ever in its 16-year history. 
  • Combine higher-for-longer rates with prices that have so far only softened to levels set when rates were in the 2-3% range, and you have an affordability crunch that is not making it easy for buyers to wade into the market. 
    • Here’s the Bank of Canada’s federal Housing Affordability Index:
  • The BoC explains: “The housing affordability index is meant to measure the share of disposable income that a representative household would put toward housing-related expenses. The measure is a ratio of housing-related costs (mortgage payments and utility fees) to average household disposable income. The higher the ratio, the more difficult it is to afford a home.”
  • Aside from affordability, the other major factor weighing on the market through Q2 was the effect of listing inventory on buyer psychology. With spring inventory up around 50% from last year, for every two homes a typical buyer had to consider in spring 2023, this year, they had three. 
    • This means buyers feel less pressure to act, less fear of missing an opportunity to own in a particular area, building, or neighbourhood, when it appears that another option will be just around the corner.
    • Home sellers who have not re-set their expectations in terms of the price a buyer will be willing to pay today compared with two years ago, or the amount of time their home will be on the market before finding a buyer, are finding the current market a challenge. Even well-informed sellers who are priced to the current market are finding the conditions challenging, particularly those with condo listings. 

What that background in mind, the trends we saw emerge in Q2 will come clearer in the market breakdown, below. 



  • As a whole, the spring market’s sales and price activity nearly kept on pace with last year. Not that keeping pace with last year is saying much; 2023 was relatively tame year, particularly compared with 2021-22, and even against the 10-year average. 
  • The big highlight over the course of the first half of 2024 has been the massive growth of listing inventory as outlined above — note the liftoff in the strata segment in particular. 
    • At its extreme low, Victoria’s MLS had fewer than 1,000 total active listings as voracious buyers flocked in and jumped on purchases, with scarcity acting as a feedback loop causing buyers to act out of fear of missing out.
    • Lately, listing inventory has been hovering around 3,500 — a level we have not seen sustained for any period of time in nearly a decade.
    • In the near term, we may see a reduction in inventory as sellers who were not successful in the spring market withdraw their property from the slower summer market.

Detached Homes, <$1.5M

  • Single-family detached homes represented a strong spot in our housing market in Q2, with all metrics holding steady from last year, except for a doubling in listing discount along with a big jump in the number of available listings.
    • The increase in listing discount makes sense in light of the number of price reductions in Q2, as 22% of sellers intent on finding buyers adjusted their listing prices, compared with only 13% in Q2 2022. 
  • Homes with income suites have fared particularly well, as rental income provides the strongest balm to the affordability crunch buyers are facing. 

Strata Homes, <$1.5M

  • The strata market, including condo and townhouse product, has seen a significant upward trend in standing inventory throughout the BoC’s rate hiking cycle, though Q2 carried on a two-year trend of prices moving essentially sideways. 
  • It remains to be seen whether the buildup of listing inventory, particularly in the urban areas, leads to lower sale prices as sellers intent on selling compete for attention of buyers. 
  • One thing we have measured is that asking prices have been trending lower for strata properties, which likely explains why this category is currently showing the tightest listing discount: 

Luxury Homes, >$1.5M

  • The higher end of the market held its own this past quarter, with only modest easing in prices while sales stayed close to last year’s Q2 total. 
  • The listing discount was up from last year, but on pace with Q1’s. Standing inventory increased as it did in the detached and strata <$1.5M segments, but by a lower proportion. 
  • Buyers for luxury homes are often not as rate-sensitive, and demand for higher-end Island properties from outside of Victoria remains constant, so we expect performance in the luxury segment to remain stable.


The MLS® Home Price Index® (MLS® HPI®) is purpose-built to gauge neighbourhoods’ home price levels and trends, using more than a decade of sales data and sophisticated statistical models to define a “typical” home based on the value home buyers assign to various attributes on homes that have been bought and sold. These benchmark homes are tracked across localized neighbourhoods and different types of houses. The Q Report’s HPI® trends compares relative regional price movements around Greater Victoria by tracking the HPI® Composite Benchmark Price across 15 districts, comparing Y/Y price changes.

  • With HPI composite benchmark prices across almost the entire region hovering within 2% of last year, the Index is yet another data point showing the flat, balanced market that emerged in Q2.
  • Langford pulled the largest drop, with the composite index being pulled down most significantly by detached homes. Condos were down a few points, and townhomes up slightly. 


  • We are likely in for a period of price stagnation, more listing inventory than buyers have been used to seeing, and general market balance, until interest rates return to a level that restores affordability to a point that homebuyers find more appealing. 
    • Although many would-be buyers are sitting on the fence, this period in the market cycle presents an opportunity to negotiate, take advantage of a much greater amount of choice and some leverage, ‘marry the price,’ and ‘date the rate’ and get into a great home without having to compete for it.
  • Don’t expect to see a change in government in the fall, as alternatives to the BC NDP remain divided and floundering without attracting the interest of voters in spite of the current government taking a sledgehammer approach to a number of issues — including housing.
    • Changes to tenancy laws take effect this summer, doubling the notice period for an owner (or buyer) to occupy a tenanted property from two months to four.
    • Although this move arguably has little material benefit to tenants (notices issued under the new rules in July will not take effect until December — and how many rental units do you see currently advertised for December occupancy?), in similar fashion to many recent changes, the bill received first, second, third reading and Royal Assent all within a few weeks’ time with little debate. 
    • This will present major challenges for homebuyers and sellers, as the extended notice period will most likely necessitate much longer closing dates, which has the potential to upend financing approvals which are generally held on a 90-to-120-day basis.


The only constant is change — and we are navigating the ever-changing market every day with buyer and seller clients. If you have a move to make today or in the future, make sure you get a data-driven analysis tailored to your unique situation. We are only a click or call away. 

Do you or someone you know need real estate advice, personalized market insights, a home marketed and sold using the best tools and accurate data? We are available to be your personal resource. Get in touch today. 

Subscribe, follow us on your favourite social platform, and reach out any time. 

Dirk VanderWal & Fergus Kyne
Newport Realty Ltd.
(250) 385-2033 |


All views and opinions expressed in The Q Report are solely those of its authors, Dirk VanderWal and Fergus Kyne, and do not necessarily represent the views or opinions of Newport Realty Ltd. or the Victoria Real Estate Board. Not intended to solicit parties already under contract. E&OE. 


For a list of terms and definitions used in The Q Report, click here.

Data Analysis 

The Q Report’s analysis includes listing and sales data exclusively from the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) ‘Core’, ‘Westshore’, and ‘Peninsula’ regions. Data is analyzed for unconditional pending and completed sales that occurred between 2024/04/01 and 2024/06/30 except where specifically noted otherwise.

Data Sources

Bank of Canada
BC Real Estate Association
Canadian Real Estate Association
Financial Post
Global News
CTV News
Richardson Wealth Research
Rob McLister
Statistics Canada
The Globe and Mail
Times Colonist
Victoria Real Estate Board

Leave a Reply

Your email address will not be published. Required fields are marked *