VICTORIA -- The demand for housing in Greater Victoria is expected to slow and the vacancy rate to rise over the next two years, according to the latest outlook from the Canada Mortgage and Housing Corporation.
The Crown corporation released its annual housing market outlook for Victoria on Thursday, forecasting a cooling period for new housing starts as units already under construction begin to come onto the market.
"The forecast period will see a slowing of population and employment growth coupled with the completion of many already started units in both rental and ownership markets," according to the CMHC's 2019-2021 outlook.
"There remains a large number of units under construction, specifically in rental and condo apartments."
The organization predicts a slight buildup of vacant rentals and unsold condo units in Greater Victoria until 2021, when the market is likely to heat up again.
Greater Victoria's vacancy rate for rental units is currently 1.2 per cent. That rate is expected to climb slightly to 1.6 per cent next year and 1.8 per cent by October 2021, according to the CMHC.
While the forecast points to relief for renters and first-time homebuyers, the housing corporation cautioned that other market forces could intervene.
"Affordability headwinds remain as we expect mortgage rates to increase, reducing the potential size of mortgages available to consumers," the CMHC wrote.
"Properties over $1 million will likely decline in value, while units in lower price ranges move higher. Apartment units continue to have a higher sales-to-listings ratio, indicating more upward pressure on prices."
