February 2024 Market Update for Victoria, BC: Changes to Exclusive Listings & Short-Term Rentals

We went into 2024 with some changes impacting Victoria real estate, including BC’s upcoming restrictions on short-term rentals and the Canadian Real Estate Association’s changes to the marketing permitted for “exclusive listings”. 
This post will go over what we’re seeing in the market today and how it relates to the January statistics. 

Victoria Real Estate Board’s January 2024 Market Statistics

Previous Year

(Jan 2023)

Properties Sold:
278
Active Listings:
1,739
Benchmark Single Family:
$1,224,000
Benchmark Condo:
$562,200

Previous Month

(Dec 2023)

Properties Sold:
329
Active Listings:
2,132
Benchmark Single Family:
$1,268,000
Benchmark Condo:
$562,000

Current Stats

(Jan 2024)

Properties Sold:
341
Active Listings:
2,140
Benchmark Single Family:
$1,244,000
Benchmark Condo:
$559,000

Upcoming Restrictions on Short-Term Rentals

Back in October, BC introduced legislation that will restrict short-term rentals starting May 1 of this year. 
The Short-Term Rental Accommodations Act defines a short-term rental as accommodation provided for a period of less than 90 consecutive days.
This understandably came as a shock to many as short-term rentals, or Airbnbs, are quite common, especially in Downtown Victoria and in buildings with micro units. 
We did a video about this when the announcement first came out, but to provide a quick recap:
The province’s goal with this legislation was to improve affordability, with the idea that many units being used as Airbnbs would then come on to the market either for sale, or as long term rentals.
On the other side of this announcement, many had concerns regarding how this may impact Victoria’s tourism industry, whether or not the government should be restricting previously legal use of a property, and the actual benefits of this legislation when considering short-term condo rentals were already being regulated by strata corporations. 
And, of course, the big question when this legislation was announced was how it was going to impact condo prices across the board.
There are a lot of factors that influence prices, but at the end of January the benchmark price for condos was sitting at $559,000, a 4.5% decrease from the benchmark condo price in October of 2023, which was $585,600. 
Looking at the stats for active listings in January, there were 535 active condo listings at month end for the Victoria Real Estate Board as a whole, which was a 29% increase from January 2023. And, more specifically, to-date, on February 6, there are 405 active condo listings in the Victoria Core Districts. 

Market Stats & Trends

It is noteworthy that active listings for all property types have been steadily increasing over the past year, with 2,140 total active listings at the end of January, compared to 1,739 active listings at this time last year. 
Speaking about the market as a whole now, Victoria’s real estate market has gone through a stabilization period these last couple years following the intensity of the ultra low-interest rate market. 
There is more inventory for buyers to choose from and it is most common for offers to be accepted with those standard subjects, including financing and home inspections, that were being forgone when the market was extremely competitive. 
Overall, today’s market is following seasonal patterns–we did see that slow down that is typical over the holidays, with an increase in market activity in January. There were 341 properties sold at the end of January, compared to 278 at this time last year, and 329 in December. 
Another characteristic of a balanced market is that it’s more enjoyable for both buyers and sellers to navigate, considering that back when the market was experiencing those unsustainable price increases due to high competition and low inventory, most sellers were looking to buy in the same market they sold in. 
This stability is welcomed, and there is a lot of anticipation around the Bank of Canada’s interest rate announcement schedule for this year. They did announce a hold to the 5% policy rate on January 24, and the next announcement is coming up on March 6. 

Bank of Canada Interest Rate Announcement Schedule for 2024

January 24: Hold at Policy Rate of 5%
March 6: TBA
April 10: TBA
June 5: TBA
July 24: TBA
September 4: TBA
October 23: TBA
December 11: TBA

Changes to How Exclusive Listings Are Marketed

The other topic I mentioned at the beginning of this video was CREA’s change to public-facing marketing tactics for exclusive listings. 
This was pitched as a way to reinforce cooperation between realtors and reduce the number of sales happening before a property was posted to the MLS (Multiple Listing Service) system.
Similarly to the Home Buyer Rescission Period, this appears to be the result of conversations that happened during an exceptionally hot market, but what does it actually mean for consumers today? 
In order to advertise a property for sale, real estate agents need to have a contract with the owner of that property, the two main contracts for this scenario are the “Exclusive Listing Contract” and the “Multiple Listing Contract”. 
Multiple Listing Contracts deal with properties posted to the MLS, and the MLS is what other websites, such as Realtor.ca and our own website, pull from in order to display properties “on the market”. 
The Exclusive Listing Contract deals with properties that are not posted on the MLS.
CREA has essentially created a new rule stating that once a real estate agent engages in public marketing for an exclusive listing, that listing must be posted to the MLS within three days.
In this context public marketing is considered “one-to-many” communication, examples of this are listing signage, distribution to email lists, flyers, and social media. However, realtors can have one-to-one conversations advertising an exclusive listing without triggering this three day rule.
There are some sellers who do not want their property posted to the MLS at all, mainly for privacy reasons, and for them, this rule significantly limits marketing opportunities for the sale of their home, but it also impacts potential buyers who may never hear about the property being available as a result. 
More commonly, exclusive listing contracts are used as a way to pre-market a home before it is ready for the MLS. The MLS offers the highest amount of exposure for a listing, and for this reason most sellers and their agents have full intention of posting the property to the MLS. 
In our business, we always have exclusive listing contracts signed, and they allow us to put the highest amount of energy into marketing our clients homes from day one, while we work towards that preferred MLS listing date.
This, of course, is affected now by the new rule, but we’re still operating this way with one-to-one conversations until that three-days-out period. 
One of the biggest challenges here is advertising for new builds, which are ideally marketed as exclusive listings until they’re mostly complete with photos and media for the MLS. 
All-in-all, from our perspective, this isn’t a win for consumers, but we’re doing our best for our clients under the new circumstances. 
Thank you so much for tuning in to this market update, and as always, if you have any questions, we love hearing from you and we appreciate your time. 

Next Steps?

Homeowners—Contact us for a free, no-obligation home equity check to gain a deeper understanding of your position in the market. 
Buyers—We’re here to help, no matter what stage you’re at, to determine the most effective pathway towards achieving your real estate goals. 

Contact us: 250-634-2141 (call or text) or [email protected]

Schedule a call with us: https://calendly.com/alex-nph/30min?month=2024-02

Subscribe to our monthly newsletter & receive our Buyer’s and Seller’s Guides (PDFs): https://northpacifichomes.ca/guides/

With gratitude,
Alex Hughes* and Ricki-Lee Jewell, Victoria, BC Real Estate Agents

*Personal Real Estate Corporation

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