The Q Report – Q4 2021


Welcome to the all-new Q Report. While we will always continue to show you what actually happened and tell the story behind the numbers, we’re excited to bring you our reporting in a new format, with more regular updates between reports for our e-mail subscribers. If you haven’t already, sign up now for updates.


We have always been bullish and confident in Victoria’s real estate market. We remain that way as we move into 2022. As a financial asset, not a lot has proven to be more secure and consistent than housing and land holdings of any kind. Despite all the calls for slowing down the market and all the sand the government has attempted to throw into the gears, demand is still at an all time high.  We see this continuing; there are just so many consumers who still believe in the value of home ownership. 


Be ready: With a crop of new listings expected to come on market in the first half of 2022, we are advising our Buyer clients to secure their financing today, and take care not to make any purchases that would affect their credit scores. Banks have been tightening up for months and interest rate hikes, even if short term, can have a negative effect on purchasing power. Especially if you are a rate-sensitive buyer, have us set you up with a proven process to succeeding as a buyer if ownership is on your list of 2022 goals. 

New construction &  pre-sales: We still like new construction and still believe the earlier you get into a project, the better. Economists are predicting prices to continue to rise at a more moderate pace in 2022, so paying today’s prices for tomorrow’s new home may be a good fit for you. Always make sure you have good Buyer representation to advocate for your best interests when working with a developer. 


Sooner the Better: The current situation is as close as we have seen to a perfect storm of conditions to sell property in the near term. If selling is in your plans for 2022, we advise moving toward that end sooner than later, as a number of factors on the horizon may temper this sellers’ market after Q1. And while it may appear that ‘houses sell themselves’ in this market, it’s the worst time to consider cutting corners if you are serious about maximizing a golden opportunity. Get in touch to find out more. 

Rental Restricted Stratas: The exemption under BC’s Speculation and Vacancy Tax that applied to rental-restricted strata properties expires as of 2022. If you’d like to avoid the sting of having your equity taxed away, contact us for a consultation and market evaluation. 

Moving up: It is still a great time to consider selling and moving up, as the forecast calls for higher values and your current home will sell for a lot more than you paid. Again, this requires a well thought out strategy executed after a serious look at the numbers for your unique situation. We are extremely well-positioned to assist in your success.


Suburban pre-construction stratas: An abundance of multi-family development outside of the core, particularly on the Westshore, offers options of opportunity for savvy investors, with some builders willing to work with as little as 10% down until completion — not a lot of capital to secure a future revenue producer or resale opportunity. 


In every edition of The Q Report, We’d like to show you what our deep dive into the numbers reveals, and explain what actually happened in the market from a big-picture perspective. The obvious headline in Victoria real estate at the moment is inventory, so let’s dive right in!

What’s going on with everyone talking about “no inventory?”

Recently overstated, often misunderstood: the topic of inventory. Fortunately, here at The Q Report, we are experts at analyzing and decoding the level of demand. 

With Victoria’s MLS® system ending 2021 with fewer than 500 active listings for homes (that’s across all property types, and all areas, from Sooke to Sidney), it seems quaint that we were sounding the alarm a year ago, when inventory sank to around 1,000 listings. 

Here’s the trend on the number of home available for sale in the CRD:

Remember, over the past decade, we have most recently seen ‘balanced’ market conditions (no major upward or downward pressure on pricing) when active listings were between 3,500 and 5,000 — that’s right, seven to ten times more than what’s available as we embark on 2022. 

Unfortunately, anyone telling you that there is ‘nothing for sale’ has been either inaccurate or defeatist; new listings actually appeared relatively on pace, coming in near the ten-year average in the first half of the year (though a little slower since summer). 

In this graph, we’ve showed the number of new listings in orange, and added the number of sales in red (and we assure you that the colour choices were not intentionally chosen to invoke tongues of fire):

Indeed, new listings coming on the market did not just drop off and flatline compared to pre-pandemic levels. But, look at the red line representing home purchases, inching higher with each annual cycle.  

When we generate a straight linear average trend line for listings and sales on the same graph, we start to really see the ‘uh-oh’ on its way:

Number of sales trending up, number of listings trending down. We have charted the ratio of sales to new listings before, as it is a great metric for quickly and easily taking the temperature of the market. In our 2021Q1 report, our threshold for a ‘hot market’ was any quarter where the sales-to-new-listings ratio was above 75%. 

Here’s the trend to the end of 2021:

All of 2021 was above the 75% threshold, with Q4 ending well above 100% sales to new listings.

Just for kicks, if we chart that trend against active listings, it nearly makes a mirror image, indicating a strong inverse relationship:

It seems there’s never been a better time to be a home seller than in Q1 2022.  

Where are all these buyers coming from?

While we have certainly seen first-time buyers rush to the market FOMO-ing about deteriorating affordability, their share of the market isn’t up drastically over pre-pandemic levels. More recently, we have been looking into the role that investor purchasers have played in the market. 

In a climate of ultra-low interest rates, ultra-low vacancy rates, and increasing rental rates — not to mention the value gains on holdings as housing prices surge — it should be no surprise that investors looking for a vehicle to grow their equity have been loading up on Canadian real estate. 

Take this graph, where credit bureau TransUnion tracked new mortgage initiations by purchaser type: 

The entire post-pandemic boom is notable; it appears everyone is taking advantage of cheap borrowing, but none more than investors, with 100% Y/Y growth in 2021. 

Looking to see if these numbers bore out locally, here’s what we found:

Using the most recently published VREB data for November 2021, we compared to data from the same month pre-pandemic, November 2019. The overall volume of sales was about the same, but we saw the number of buyers purchasing a second property up by more than 71%. 

Amid rising prices and the prospect of higher interest rates, will investor demand remain strong? Read ahead to find out. 



Detached Homes, <$1.5M

In Q4 2021, the number of sales of detached homes fell by approximately 25% from Q3, making it the third straight quarter of decline. However, the drop in the number of sales since spring does not point to a drop in demand. The median price ripped up 9% from the previous quarter and the number of days on market was one of the lowest we have ever reported. In addition, price per square foot rose by a generous margin year over year and the listing discount, which measures the amount below asking which consumers are typically paying, ran even further into negative territory, pointing to the frenzied bidding wars driving average sale prices well above asking.  

On the supply side, many would-be sellers remain gridlocked, with homes to sell, but unwilling to take the risk of not purchasing first. Looking at new builds, the latest data from CMHC shows current housing starts are up from before the pandemic, but even within those apparent gains, new construction of single-family homes is trending down, currently accounting for a scant 18% of dwellings under construction. Builders are telling us that building lots are scarce, and competition and rising land values have put a squeeze on their market. 

Strata Homes, <$1.5M

With such quick movement in the strata segment, every metric we observe seems to scream ‘get into the market asap!’ We have been beating that drum since mid-2020, and predict more of the same going ahead. If your strata was listed and didn’t sell, it just wasn’t priced right — there was no shortage of buyers. If you were among the buyers, our numbers show you paid above asking, on average, as our listing discount metric sank into negative territory for strata sales for the first time ever. 

Condos saw the largest Y/Y gains to median sale price of our segments this quarter, even beating out single family homes — no small feat the way the market has been, and a trend we consider likely to continue. The surge in condos in particular may underline the sense of desperation in the market, as the most accessible rung of the property purchasing ladder, and may simultaneously be highlighting high investor demand, as condos tend to be a favoured asset class for property investors. 

Luxury Homes, >$1.5M

Analyzing the luxury segment this quarter showed the importance in the nuance of a market segment that stretches from $1.5M to the sky. The bulk of the transactions are still happening between $1.5M-$2M — which speak straight to the increase in sales volume we’ve been tracking throughout the pandemic, including this quarter. In fact, a much larger number of consumers are participating at this price point currently, which is driving Y/Y changes to market times (down by more than half from a year ago, indicating shorter listing periods), PPSF, and listing discounts (also down by more than half, indicating most sales happening near asking price). 

At the higher end of the luxury market, we also see things are alive and well. 2021 saw 55% more sales over $3M in Greater Victoria than the preceding year, pointing to a larger number of homes being valued at this price point than ever before. With the increase in volume, the average sale price for all homes sold over $3M remained consistent at just over $4M. But with this segment, it just takes one of those still-rare $12M sales to take the averages for a ride. 


The MLS® Home Price Index® 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. 

Once again, the Index shows us an entire region that is piping hot, with double-digit gains in every area. As has been the case for much of the pandemic, buyer preference for larger, more private, detached homes on larger lots has driven the most rural areas to the highest levels of price appreciation. Metchosin, Highlands, Sooke, and North Saanich all exemplify these characteristics. Moreover, the numbers are a manifestation of the trend we have experienced anecdotally in working with our own clients in the field: as a large portion of information, tech, and government workers have gained the ability to work from home, their need to live in close proximity to their downtown office is diminishing and thus we have seen a demand in areas farther from the core. 

Is that the reason why it looks like those core areas are falling behind on the price growth party? Not so — in fact, the core is alive and well, with sales and prices strong, but the mix of property types within the composite index is tripping things up. Because of the way the HPI® calculates values, it is currently tracking condo price growth at a lower rate than for detached homes across the region. Here’s the breakdown of Y/Y benchmark price appreciation by property type, across our three major regions:

Below the bar graph, we’ve added a simple pie figure depicting the relative numbers of condos and detached homes sold in Q4 corresponding to each region. When you consider the majority of housing stock in Downtown Victoria and Vic West is condos, and understand that the composite benchmark price is weighted toward that majority, the stated prices and gains should make more sense in that context, and vice-versa for the Westshore and Peninsula regions. 

We see the areas currently showing the lowest HPI® increases poised to become among the areas for higher increases in the future. Long-time readers of The Q Report will remember our past predictions for Esquimalt, Sooke, and Vic West, which have come to fruition. 


Seeing the current state of the housing market, we think it’s safe to say that real estate is the new toilet paper — the difference is, a month into the pandemic, we saw store shelves re-stocked with TP. Today, against the backdrop of a seemingly never-ending parade of COVID variants, first-time buyers, move-up buyers, investors, and luxury home buyers all still can’t seem to get enough property. So what comes next? 

Near term: As a financial asset, little has proven to be more secure and consistent than housing and land holdings. Despite all the calls for slowing down the market and all the sand governments have attempted to throw into the gears, demand is still at an all-time high. In the near term, we see this continuing, as so many consumers still believe in home ownership. The first quarter of 2022 will bring new listings, but the pace of sales will keep listing inventory from recovering appreciably.

Cooling off period: The BC Government announced in Q4 that they will be tabling legislation in the spring session to introduce a mandated ‘cooling off’ period for all residential real estate transactions. While there is a high likelihood that there will be an array of unintended consequences for individual consumers, we are as yet unsure if this alone will drag on the market, without knowing the details of implementation. If it creates enough uncertainty, consumers could get spooked away from the market for a short period of time somewhere in Q2-Q3, but as with most ill-conceived attempts at cooling demand, its effect will be temporary at best.

Inflation: Even at 4.7%, economists tell us that the Bank of Canada continues to understate inflation, which is likely closer to 6% in real terms. Indeed, we see our own household budgets and those of our clients facing price pressure at the grocery store, gas pump, auto dealer, and elsewhere. As long as Canadians’ hard-earned dollars continue to depreciate at this rate, we see demand for real estate continuing, since investors know that real estate is a great hedge against inflation. 

Interest Rates: The single most important lever that the BoC has to rein in inflation is interest rates. They are walking a tightrope between keeping Canadians (and the Canadian government) solvent, and maintaining their inflation targets to preserve the country’s balance of liquidity. The bank’s Governor has stated that rates are likely going to rise in 2022, most likely mid-year or in the second half of the year. 

At this point, we expect rate increases to be gradual rather than sudden, however, a round of increases will be the primary driving force in creating some slack in the market. This will manifest first at the entry-level point, and the move-up segment, so rate-sensitive buyers should be gearing up to make a move in the early months of the year. The good news: first, this will likely reduce the number and intensity of multiple-offer sales; second, we expect the higher end of the market to continue to move even if rates increase, as these buyers tend to have more liquidity, and use real estate holdings to protect their wealth from inflation. 

How we can help

Thank you for reading The Q Report. Being informed on the value of your largest financial asset — and especially being informed before engaging in any transaction — with solid, verifiable data, have taken on greater importance than ever. 

As not only market experts and ‘numbers guys,’ but also award-winning, experienced, skilled and trained veteran real estate agents at one of Victoria’s top boutique firms, we are your best bet for maximizing the opportunity for you and your family in your next move. Contact us now to chat about your needs, and find out how we can apply our data-driven approach to your unique situation.

Dirk VanderWal & Fergus Kyne
Newport Realty | Christie’s International Real Estate
(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 2021/10/01 and 2021/12/31 except where specifically noted otherwise.

Data Sources

Altus Analytics
Bank of Canada
BC Real Estate Association
Buffini & Company
Canada Mortgage and Housing Corporation
Canadian Real Estate Association
Global News
Victoria Real Estate Board

1 thought on “The Q Report – Q4 2021

Leave a Reply

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