January 28, 2026

The Bank of Canada held its overnight policy rate at 2.25% this morning. No surprise there. The surprise, if you can call it that, is how clearly the Bank Bank of Canada is saying: the rate might be steady, but the world around it is not.

If you are a buyer, a seller, or you have a mortgage renewal coming up, here is what you will understand by the end of this post:

• Why the Bank stayed put today

• Why fixed mortgage rates can stay elevated even when the overnight rate does not move

• What this likely means for Greater Victoria decisions over the next few months

What the Bank of Canada actually said

The Bank’s statement reads like a checklist of “steady, but fragile.”

• Growth is expected to be modest: the Bank projects 1.1% growth in 2026 and 1.5% in 2027.

• Inflation is close to target: December CPI inflation came in at 2.4%, and the Bank expects inflation to stay close to 2% over the horizon.

• The labour market is still soft: unemployment is 6.8%.

• Trade uncertainty is the cloud over everything: US tariffs and an upcoming Canada–US–Mexico Agreement review are singled out as major risks.

They also note global conditions are “accommodative overall,” the Canadian dollar has been pushed above 72 cents with recent US dollar weakness, and global growth is expected to average about 3%.

Bottom line: the BoC thinks the current rate is “appropriate,” but they are keeping both hands on the wheel.

What BCREA has to say (and why it matters for mortgages)

The BCREA commentary hits a point I see people miss all the time - The overnight rate is not the whole story for mortgage pricing.

BCREA’s angle is basically this:

• The data late in 2025 came in a bit stronger than expected, which pushed market expectations toward a possible 2026 hike.

• But the headwinds (trade restrictions, uncertainty, global volatility) make actual tightening unlikely.

• Even if the Bank stays on hold, mortgage rates can remain elevated relative to the overnight rate because investors demand a bigger risk premium in medium and long-term yields - which sounds technical, the real-life translation is simple:

You can have a steady central bank rate and still have lenders price mortgages cautiously, especially on the fixed-rate side.

BCREA has also been pretty direct in their broader materials that variable rates have already come down with prior cuts, but that without more cuts, the road ahead is more “hold and wait” than “cheaper borrowing.”

What other economists are saying today

The dominant theme from economists and market watchers is uncertainty management.

Reuters reported that Governor Tiff Macklem emphasized how hard it is to forecast the next move in an environment shaped by trade tension and geopolitical risk. In that same coverage, Doug Porter (BMO) framed the Bank as looking “comfortable” where it is, while Andrew Kelvin (TD Securities) highlighted the increased focus on uncertainty, particularly tied to the US and trade files.

This all lines up with what a lot of forecasters have been leaning toward going into this decision: a prolonged pause as the base case. 

What this means for mortgages in plain English

Variable-rate mortgages

Variable rates are still the ones most directly linked to the Bank of Canada’s moves through prime.

So a hold usually means:

• No immediate change to what variable-rate borrowers are paying.

• No sudden new affordability shock.

But lenders can still adjust pricing at the margins. Not usually dramatic, but worth watching if you are rate shopping or your renewal date is coming up.

Fixed-rate mortgages

Fixed rates are more tied to bond yields and market expectations about risk and inflation.

So even with the overnight rate flat:

• Fixed rates can stay stagnant or move up/down based on bond markets, not the Bank’s announcement headline.

This is exactly where the BCREA “risk premium” point matters. If markets are jittery about trade, inflation persistence, or global volatility, long-term borrowing costs can stay higher than people expect.

If you want to see what today’s rates mean for your monthly payment, my payments and affordability tools can help.

What it means for buyers in Greater Victoria

If you're a buyer right now and you feel like the math keeps shifting even though the rate didn't change, you're not imagining it. Fixed rates don't follow the Bank of Canada in a straight line, and that disconnect is frustrating when you're trying to lock down a budget. The good news is that stability, even imperfect stability, makes planning possible.

A steady rate environment gives you something valuable: you can stop guessing. Your pre-approval and budgeting feel less like moving targets. You can spend more energy on the home itself (location, layout, strata docs, sunlight, parking, future flexibility) instead of obsessing over whether rates will spike next month.

The trade-off is that if fixed rates remain sticky, some buyers will still feel payment pressure. That tends to keep the market more selective. Well-priced, well-presented homes will get action. Homes that feel overpriced or require too much imagination will sit.

If you're buying this spring, I would think in terms of preparedness over prediction. Be clear on your payment comfort zone before you start looking. Keep your financing options open (term length, fixed vs variable, portable features) so you're not locked into one scenario. And have a realistic Plan B if the perfect home shows up before the perfect rate does. Sometimes the right house at 4.5% beats waiting six months for 4.2% and losing the house you actually wanted.

Ready to move forward? I keep my Buying Guide updated with clear steps for first-time buyers, move-up buyers, and downsizers, step by step, no jargon..

What it means for sellers

For sellers, rate stability helps, but it does not do the selling for you.

A steady policy rate:

• reduces the risk of buyers suddenly disappearing due to a surprise hike,

• it does not guarantee urgency.

In a market like Greater Victoria, where buyers can be picky even in good years, the fundamentals keep winning:

• sharp pricing,

• clean presentation,

• clear positioning (who is this home for, and why will they choose it).

If fixed rates stay elevated, buyers tend to scrutinize value harder. The homes that feel “easy to say yes to” are the ones that move.

If you’re thinking about selling this year, the first step is getting a realistic value range based on today’s market.

My overall take

Today’s decision feels like the Bank saying: we are on pause, but we are not relaxed. 

BCREA’s framing is what I think homeowners and buyers should keep in mind: even if the Bank holds all year, mortgage rates do not have to drift down in a neat, friendly line. Markets can price in uncertainty, and lenders follow. 

The next scheduled rate announcement is March 18, 2026.

Sources:
https://www.bankofcanada.ca/2025/12/fad-press-release-2025-12-10
https://www.bcrea.bc.ca/economics/market-recovery-continues-at-an-uneven-pace-across-bc/
https://www.reuters.com/world/americas/view-bank-canada-holds-benchmark-interest-rate-225-2026-01-28/
https://www.wsj.com/articles/bank-of-canada-stands-pat-on-rates-warns-of-heightened-uncertainty-b2fae2b2
https://www.benefitsandpensionsmonitor.com/news/industry-news/bank-of-canada-stands-still-while-trade-politics-move-the-goalposts/

People keep saying a version of the same thing lately:
“Inventory is up. Prices should come down.”

On the surface, that logic makes sense. More listings usually means more choice, more negotiating room, and fewer situations where buyers feel like they have to sprint.

But in Greater Victoria, inventory is a blunt measure. It tells you how many homes are for sale. It does not tell you whether those homes are priced to move, whether they fit what buyers actually want, or whether sellers feel any urgency. That’s why I think BCREA’s latest Market Intelligence piece is useful, not because it predicts next month, but because it explains what happens when the new-build pipeline stays thin.

The BCREA piece is worth reading because it points to a bigger risk than this month’s sales numbers. When new construction slows for too long, the pipeline thins, and the next demand cycle can run into the same supply wall again.

I agree with the mechanism. Where it gets tricky is assuming the same signals mean the same thing everywhere in BC. Victoria has a few structural quirks that can make “inventory is up” feel very different on the ground.

If you want to see what “inventory” looks like right now: Search Victoria homes

What BCREA is warning about

In plain terms, BCREA is arguing that today’s weaker conditions risk repeating a familiar pattern: slowdowns reduce housing starts, the pipeline shrinks, and affordability can deteriorate later when demand returns. 

That’s the provincial view. Here’s the Victoria-specific catch.

Why sellers can wait in Victoria

A big part of how inventory “fixes” a market is seller pressure. When listings pile up, sellers compete harder, pricing adjusts, and buyers gain ground.

In Victoria, many owners have meaningful equity. Some have low mortgages, or none at all. When those sellers list, they are often testing the market, not being forced into it.

So you can see more listings without seeing the kind of rapid price discovery people expect. Homes sit. Negotiations get calmer. The market slows. But the floor does not always drop out, because the must-sell group can be smaller.

Inventory exists. Urgency often does not.

Why some inventory doesn’t help buyers

Another reason inventory can mislead here is simple: a lot of what’s for sale isn’t what most buyers are looking for. In Victoria, that often shows up as buyers paying closer attention to strata fees, contingency funds, and whether a home actually works for daily life.

A lot of the inventory tends to concentrate in narrow pockets, like:

• condos with high monthly carrying costs (strata fees, special assessment/depreciation report concerns)

• layouts that work better as rentals than long-term living

• price points that fit a different rate environment

When buyers re-enter the market, they do not absorb inventory evenly. They focus on the homes that fit real life:

• functional layouts

• locations that fit daily routines

• monthly costs that feel manageable

• flexibility for kids, work-from-home, aging parents, or future downsizing

That is how you can have “more listings” and still have competition for the right properties. More listings can be real, and the market can still feel tight, because the useful inventory is concentrated in fewer homes.

Why supply still feels tight in Victoria

Greater Victoria does not have a fast supply response. Geography, approvals, labour, and neighbourhood-level friction limit how quickly new housing can come online.

So when construction slows, the impact is not always immediate. It shows up later as fewer good options and tighter selection when demand improves. That lines up with BCREA’s broader warning about the pipeline.

This is not a forecast. It’s just how constrained markets tend to behave.

What I’d take from this if you’re buying or selling

If you’re a buyer:
Inventory may give you more choice, but leverage depends on the segment. Some listings will sit. Others will sell quickly because they are the ones buyers actually want.

First time buyer? First-time buyer guide

If you’re a seller:
A slower market is not a reason to panic if you do not need to move. But pricing still matters. The homes that sell well are the ones that feel like good value, not the ones that feel like a negotiation starting point.

Thinking about downsizing, but not rushing it? Downsizer guide

If you’re watching from the sidelines:
In Victoria, a quiet market is not the same as a weak market. Often it’s cautious. The tempo changes before the headline prices do.

The takeaway for Victoria buyers and sellers

BCREA is right to focus attention on supply and the construction pipeline. My only pushback is on the shortcut conclusion some people make when they see inventory rise.

In Victoria BC real estate, inventory is not the full story.
Choice, monthly carrying costs, and seller motivation usually matter more than the raw count.

If you’re weighing a move this year, I’m happy to talk it through with you. No pressure. Just options.

Source: BCREA Market Intelligence, “Déjà Vu: BC Housing Market Risks Repeating the 2010s.”

If I had to give 2025 a label in Victoria real estate, this would be it: the year of breathing room.

Not a boom. Not a bust. And definitely not a return to the frenzy years people still talk about over coffee. Instead, 2025 was a year where the market slowed down just enough for decisions to be made with a bit more clarity. Buyers had time to think. Sellers had to be more intentional. And outcomes depended far more on pricing, condition, and expectations than on luck or timing.

By the end of this post, you should have a good sense of what actually drove the Victoria market in 2025, where demand truly came from, and what that means heading into 2026.

The big picture: steady prices, selective buyers

Looking at Greater Victoria as a whole, pricing held up better than many expected. Single family homes finished the year with an average sale price just over $1.3M, modestly higher than 2024. Condos and townhomes followed a similar pattern. Flat to slightly up, but without the sharp swings we saw earlier in the decade.

That stability, however, came with a clear trade-off: buyers were far more selective.

Homes that were well priced and well presented sold. Homes that were not sat longer, invited negotiation, or simply missed the moment. This was especially true in the middle of the market, where buyers had more choice than they’ve had in years.

Sales activity picked up, but confidence stayed cautious

Total sales volumes improved year-over-year, particularly for single family homes. That tells us something important. People were still moving. Life events did not stop. But the mindset had changed.

What I saw repeatedly was this:

• Buyers came prepared, but not rushed.

• Conditions were common again.

• Price reductions were part of the process, not a failure.

This wasn’t hesitation. It was measured decision-making, and that tone defined much of the year.

Victoria is still a local market, and the data proves it

One of the most telling pieces of data in the 2025 annual reports is buyer origin.

More than 91% of all buyers lived in British Columbia, and nearly 76% were already in Greater Victoria. Buyers from elsewhere in Canada made up just over 7%, while international buyers accounted for less than 2%.

Even when we look only at out-of-town buyers, the story stays local:

• About 64% were still from BC

• Roughly 29% came from elsewhere in Canada

• Less than 7% were from outside the country

This matters because it reinforces a long-standing truth about Victoria real estate. This market is driven by people who already live here or already plan to live here. Lifestyle, work, family, and long-term roots continue to outweigh speculation or global capital flows.

Micro-markets mattered more than headlines

If you zoom into individual municipalities, 2025 becomes even more interesting.

Oak Bay, North Saanich, and parts of Saanich East continued to command premium pricing, while Langford and Sooke delivered higher volumes at more attainable price points. Condos in the core remained active, particularly for buyers prioritizing walkability and simplicity over space.

What changed in 2025 was how forgiving the market was not.

Layout, condition, parking, strata health, street noise, and renovation quality all mattered more than they did a few years ago. The gap between a great property and an average one widened, even when headline prices appeared stable.

Interest rates helped, but psychology mattered more

From a national perspective, interest rates eased during 2025, and that certainly helped bring some buyers back into the conversation. But lower rates did not automatically translate into aggressive behaviour.

Many buyers remained cautious, shaped by the volatility of the last few years. Sellers, meanwhile, sometimes expected rate cuts to reignite urgency that simply wasn’t there.

The result was a market that worked best for people who aligned their expectations with reality, rather than betting on sentiment alone.

International and national influences stayed in the background

Despite plenty of global headlines, international buyers remained a very small part of the Victoria market in 2025. Less than 2% of all purchases came from outside Canada.

National housing conversations around supply, affordability, and policy set the tone, but they did not drive day-to-day outcomes here. In practice, Victoria behaved like it usually does: locally influenced, lifestyle driven, and resistant to sudden swings.

What 2025 rewarded, and what it punished

2025 rewarded:

• Realistic pricing from the start

• Homes that were clean, bright, and well maintained

• Sellers who understood buyer trade-offs

2025 punished:

• “Testing the market” pricing

• Deferred maintenance without price adjustment

• Assuming demand would overcome condition

This isn’t right for everyone, but for many sellers the choice was clear: price well and stay in control, or price high and let the market decide for you.

Looking ahead to 2026

If 2025 was the year of breathing room, 2026 will likely be the year where confidence decides direction.

I’m watching:

• Inventory levels

• Time on market

• Buyer decisiveness, not just rates

• Continued divergence between property quality and outcomes

The market doesn’t need drama to be healthy. A year like 2025 can be a gift if you use it properly.

If you’re thinking about a move in 2026, or just trying to understand how these patterns apply to your specific neighbourhood or home type, I’m always happy to talk it through. No pressure. Just a clear conversation about options and trade-offs.

Every January, the BC Assessment notice lands in mailboxes and inboxes across Greater Victoria. And almost every year, the same question comes up.

“What does this actually mean?”

If you take only one thing from this post, let it be this. A BC Assessment is a reference point, not a verdict. It is useful, imperfect, and often misunderstood. By the end of this, you should understand what the 2026 assessment represents, what it does and does not tell you, and when it deserves a closer look.

What BC Assessment is really measuring

BC Assessment provides an estimated market value for every property in the province once a year.

The important detail that often gets missed is the valuation date.

Your 2026 assessment is based on market data as of July 1, 2025.

That means:

• It reflects what comparable homes were selling for roughly six months ago

• It does not reflect what has happened since late summer or fall

• It is already out of date the moment you receive it in January

This timing is deliberate. BC Assessment needs a fixed date to evaluate hundreds of thousands of properties consistently. But it also means the number you see is a snapshot, not a live market read.

This is why assessments often feel confusing when markets are shifting.

Why your value may look higher or lower than expected

Assessments are built using mass appraisal models. They rely heavily on comparable sales, location, property type, size, and age. They are good at trends. They are less precise at individual nuance.

A few reasons your assessment may surprise you:

• Your neighbourhood had strong sales activity before July

• Your property type moved differently than the broader market

• Renovations, condition issues, or layout quirks are not fully captured

• Your home is being compared to sales that are technically similar, but practically different

This does not automatically mean the assessment is wrong. It means it deserves context.

How assessments relate to property taxes, briefly and calmly

This is where stress tends to creep in, so let’s slow it down.

Your assessment does not directly set your taxes.

Municipalities first decide how much money they need to raise. That decision drives tax increases far more than assessment values do. The mill rate is then adjusted so the total budget is collected.

Your assessment mainly determines your share of that total, relative to other properties.

In practical terms:

• If most properties in your community rose by a similar percentage, your relative position may not change much

• If your assessment rose more than the community average, you may shoulder a slightly larger share

• If it rose less, you may carry a smaller share

The assessment influences distribution. Municipal budgets influence the outcome.

That distinction matters.

Why comparing year over year is not enough

One of the most common mistakes I see is focusing only on the change from last year.

What actually matters more is:

• How your value compares to similar homes

• How your increase compares to the average change in your municipality or property class

A ten percent increase means very different things depending on what happened around you.

This is why two neighbours can see similar assessments and experience very different tax outcomes.

When it makes sense to question an assessment

Most assessments are broadly reasonable. Some are not.

Situations where it is worth slowing down and looking closer include:

• Your assessment is clearly above comparable sales from around July 1, 2025

• Similar homes or strata units show inconsistent values

• The assessment assumes features or condition your home does not have

• Your increase significantly outpaced the surrounding area

Situations where it usually does not help:

• Arguing based on today’s market

• Pointing to renovation costs

• Comparing to listing prices rather than completed sales

Assessment reviews are evidence-driven. Data wins. Opinions do not.

How the review and appeal process works

The process is more structured and less dramatic than many people expect.

At a high level:

1. Review the details
   Confirm square footage, classification, age, and lot size.

2. Look at true comparables
   Focus on similar properties that sold close to the July 1 valuation date.

3. Decide whether it is worth pursuing
   Not every difference justifies the time or effort.

4. File a complaint if warranted
   Many issues are resolved through discussion once the data is reviewed.

The key decision is not how upset you feel when you open the notice. It is whether the numbers hold up when calmly examined.

A quick real-world perspective

I often see two very different reactions.

In some cases, the assessment looks high, but once we compare it to similar sales from last summer, it lines up reasonably well. No action needed.

In other cases, especially with strata properties, values within the same building can drift apart without a clear reason. Those are worth flagging.

Same system. Same year. Different conclusions.

How I suggest homeowners use their assessment

Think of your BC Assessment as a conversation starter, not a final answer.

It can help you:

• Understand how your property fits within your local market

• Spot inconsistencies or red flags

• Ask better questions about value, taxes, or future plans

It should not be the sole basis for financial decisions, pricing a home for sale, or assuming what your tax bill will be.

If you want a second set of eyes

If you are unsure how your assessment stacks up, I am happy to walk through it with you.

Sometimes that conversation ends with, “This looks fine.” Other times it leads to a deeper review or a formal challenge. Both outcomes are useful.

The goal is not to fight the system. It is to understand it well enough to know when action makes sense, and when it does not.

If this is on your mind, feel free to reach out. I am always happy to talk it through.