Updated October 2026. First published October 2021.
In 2021 this page carried an article arguing that a Canadian housing crash was hard to imagine. Five years later the record is mixed. Prices did fall hard when interest rates jumped: the national average lost 25% between February 2022 and January 2023, and Victoria's benchmark detached home about 14%. But there was no crash, because almost nobody was forced to sell. Now the pressures are building again. Victoria slipped into a buyer's market in September 2026, and on October 28 the Bank of Canada raised its rate for the first time since 2023.
In this article
What the 2021 warnings said, and what happened
The original article, written by Wise Publishing, looked at the stress scenarios Royal Bank of Canada gave regulators in 2021. In RBC's worst case, the national average price of $713,500 in March 2021 fell 29.6% to $502,304 by June 2022. In its base case the average reached $871,417 by April 2026, and in its best case more than $1.2 million. The article called the worst case unlikely and said the growth needed for the base case was "pretty much a given."
RBC's 2021 scenarios for the national average price, against reality
National average home price. The scenarios are from RBC's 2021 regulatory filing as reported at the time; the actual figure is from the Canadian Real Estate Association.
Neither came true. The national average did fall almost as far as the worst case, from a record $816,720 in February 2022 to $612,204 in January 2023, but it did not stay there. In April 2026 it was $695,412: about 20% below the base case that was supposed to be a given, and still 15% below the 2022 peak. Both the doom and the boom were too confident. Prices can fall a long way in a short time without a crash, and they can stay below their peak for years.
What Victoria prices actually did
Victoria Core benchmark prices since 2019
MLS® Home Price Index benchmarks from the Victoria Real Estate Board, using the Board's restated values where it has revised them: each September, plus the 2022 peak and the 2023 low. The shaded band marks the Bank of Canada's rate hikes.
On the Board's restated index, the benchmark single-family home in the Victoria Core rose from about $849,000 in September 2019 to about $1.42 million in the spring of 2022, a gain of two-thirds in two and a half years. (As first published, the peak was $1,464,400 in June 2022; the Board revises its index from time to time.) It then fell about 14% to $1,224,000 by January 2023, recovered to around $1.3 million, and has drifted sideways and lower since. In September 2026 it was $1,280,100, down 2% from a year earlier. The condo benchmark peaked at about $630,000 and never recovered; at $547,800 in September 2026 it is about 13% below that restated peak (15% below the June 2022 peak as first published) and has hardly moved since 2024.
The volume numbers tell the rest of the story. In September 2026 the Board recorded 463 sales, 27% below the September average of the previous ten years, while 3,811 homes were for sale, 52% above it. Sales were about 12% of active listings, and the Board's chair said the market had "ventured into buyer's market territory." Leaving aside the first months of the pandemic, it is the first buyer's market Victoria has seen since January 2015.
See our condo study, new condo buildings ranked by price per square foot, for where the condo market is under the most pressure.
Rates did the damage, not a crash in jobs
Bank of Canada policy rate, 2020 to October 2026
Target for the overnight rate at the end of each month. Source: Bank of Canada.
The Bank of Canada held its rate at 0.25% for two years, then raised it ten times in sixteen months to 5.00% by July 2023. A household that qualified for a large mortgage in early 2022 qualified for far less a year later, and prices adjusted to what buyers could carry. The Bank cut nine times between June 2024 and October 2025, to 2.25%, and held there through seven decisions. On October 28, 2026, with inflation at 3.2% in September, pushed up by energy prices, it raised the rate to 2.50% and warned that another increase was possible. Fixed mortgage rates follow the bond market rather than the Bank, and five-year Government of Canada bond yields had already climbed from about 2.6% before late February to more than 3.6% in October, so fixed rates were rising before the hike.
What a crash really requires
Prices fall when buyers can pay less. They crash when a lot of owners have to sell at the same time and there are not enough buyers to absorb them. Almost every housing crash on record needed some combination of four things:
1. Job losses
Owners who lose income cannot carry a mortgage. Unemployment is the single best predictor of forced sales.
2. A payment shock owners cannot absorb
Sharply higher rates at renewal, or loans that were never affordable to begin with.
3. Credit that disappears
Lenders that stop lending, or buyers who cannot qualify, so there is no one to sell to.
4. A glut of supply
Too many listings, often from investors and unsold new construction, chasing too few buyers.
Between 2022 and 2025 Canada had only the second of the four, and even that was cushioned: fixed-payment variable mortgages stretched their amortizations instead of forcing sales, lenders worked with borrowers, and unemployment stayed low. That is why prices slid rather than collapsed. The question for 2026 and beyond is whether the other three are now arriving.
The 2026 crash-risk scorecard
Here is where each warning sign stands, using the latest published data.
| Indicator | Latest reading | Why it matters | Signal |
|---|---|---|---|
| Unemployment | Canada 6.5%, Victoria 5.3% (September 2026) | Job losses are what turn price declines into forced sales. Canada lost 68,000 jobs in September. | Rising |
| Mortgage arrears (90+ days) | BC 0.26%, Canada 0.29% (July 2026) | Highest nationally since 2016 and more than double the 2022 low, but still below the long-term average of about 0.40%. | Rising, still low |
| Interest rates | Policy rate 2.50% after the October 28 hike | Higher rates at renewal squeeze owners and shrink what buyers can borrow. | Turning up |
| Renewal shock | About 60% of mortgages renew in 2025 and 2026 | Five-year fixed borrowers renewing in 2026 face payments about 20% higher on average. | Peaking |
| Supply | 3,811 active listings, 52% above the September norm | Sales are 27% below normal. Buyers have choice and time. | Buyer's market |
| Population growth | +0.5% nationally in the year to July 2026 | Down from 3.1% at the 2023-24 peak. Fewer new households to absorb supply. | Slowing |
| Credit | Stress test unchanged; 30-year insured amortizations for first-time buyers | Lenders are still lending. No sign of a credit crunch. | Normal |
| Forced selling | Lower Mainland court-ordered sales up 66% in January to July 2026 | Still only about 1% of sales, but rising quickly from a very low base. | Rising from low |
Read together, the scorecard describes a market under real pressure, not one in free fall. Two signals point clearly down, five are moving the wrong way, and credit is still flowing. The ingredient a crash needs most, mass forced selling, is rising but from a very low level, and Victoria's unemployment rate is well below Canada's. If job losses accelerate in 2027 while renewals and higher rates bite, the picture can change quickly.
What the forecasters say
| Forecaster | Measure | 2026 | 2027 |
|---|---|---|---|
| CMHC (July 2026) | Victoria average price | $1,020,000 | $1,015,000 |
| TD Economics (September 2026) | BC average price | -1.3% | +0.9% |
| BCREA (April 2026) | BC average price | -1.4% | n/a |
| CREA (October 2026) | Canada average price | +0.2% | +1.2% |
| RBC (September 2026) | Canada benchmark price | -2.3% | +0.8% |
The big forecasters see flat to slightly lower prices, not a crash, although most of these forecasts came before the October rate hike and CREA has cut its outlook three times this year. Our own long-cycle outlook for Victoria is more cautious: its base case is a Canadian recession in 2027 and a further 18% to 22% nominal decline in the Victoria Core detached benchmark to a low around 2029 or 2030. That would be a long grind rather than a crash, and after inflation it would be a large loss in real terms.
How real crashes looked
How far prices fell in past downturns
Peak-to-trough decline in nominal prices. Measures differ: averages swing more than benchmark indexes.
Real crashes are rare, and slow to heal. Toronto's 1989 peak was not regained for 13 years, and for about 22 years after inflation. Vancouver prices fell by about 38% in 1981 and 1982, when five-year mortgage rates passed 20%. U.S. prices fell 27% from 2006 to 2012 in a crisis built on loans that should never have been made. By those standards Canada's 2022-23 drop was a sharp correction, not a crash, and Victoria's was milder than the national one. The more likely risk now is not a sudden collapse but a long stretch of flat or falling prices: Victoria's benchmark is already below its 2022 level in dollars, and well below it after four years of inflation.
Victoria's buffers and weak spots
What holds prices up
- Victoria's unemployment rate, 5.3% in September 2026, is well below Canada's 6.5%.
- Many owners have large equity, and many retirees own outright, so few are forced to sell when prices dip.
- BC mortgage arrears, at 0.26%, are below the national rate and about half their 2011 peak.
- Land is limited by the ocean, the hills and the Malahat, and the region keeps drawing retirees and remote workers.
- Credit is still available: the stress test is unchanged and first-time buyers can get 30-year insured mortgages.
What could push them down
- As the capital, Greater Victoria relies heavily on public-sector jobs, so provincial spending restraint is a local risk.
- Inventory is high: 3,811 listings in September 2026, 52% above the ten-year September average.
- Condos are weakest, 13% to 15% below their 2022 peak, with new buildings still adding supply.
- Renewals: five-year fixed borrowers renewing in 2026 face payments about 20% higher on average.
- Population growth has slowed sharply, which cuts demand from new arrivals, students and renters.
- Rates are rising again, and fixed mortgage rates follow bond yields that are already higher this year.
Victoria's last big drop before 2022 came in 2008, when the average detached price fell about 17% in seven months, then was back near $600,000 by August 2009. The buffers above are real. But so is the shift in 2026, and the risks are stacking up on the side of lower prices for longer.
What it means for you
If you own and plan to stay
Price swings matter less than your payment. Plan your renewal early, compare lenders (switching an uninsured mortgage at renewal no longer requires a new stress test), and avoid adding debt against the house.
If you need to sell in the next year or two
Price for today's buyer's market, not for 2022. Homes that are priced right still sell; homes priced on hope sit and then sell for less. Ask for the recent sales, not just the listings.
If you are buying
A buyer's market gives you time, choice and room to negotiate on price and subjects. Buy what you can carry if rates rise further, and use every tax advantage you have, starting with an FHSA.
If you are investing
Run the numbers at today's rates, not the ones you hope for, and expect more distressed sales. Our guide to buying a court-ordered sale explains why they are rarely the bargains they seem.
Questions people ask
Will Victoria house prices crash in 2027?
Nobody knows. CMHC expects Victoria's average price to be roughly flat, at about $1.02 million in 2026 and $1.015 million in 2027. Our own long-cycle outlook expects a slow decline rather than a crash. A true crash would need heavy job losses and widespread forced selling, which are rising but are not here yet.
How much have Victoria prices fallen since 2022?
The Victoria Core single-family benchmark fell about 14% from its spring 2022 peak to January 2023 on the Board's restated index, and in September 2026 was about 12.6% below the June 2022 peak as first published. The condo benchmark is about 15% below its June 2022 peak as first published, or 13% on the restated index.
Is Victoria in a buyer's market?
As of September 2026, yes. Sales were about 12% of active listings, and the Victoria Real Estate Board's chair said the market had moved into buyer's market territory, the first time since January 2015 apart from the early pandemic. One month is not a trend, so watch the next few releases.
Did the Bank of Canada raise rates in 2026?
Yes. On October 28, 2026 it raised its policy rate by a quarter point to 2.50%, its first increase since July 2023, citing inflation of about 3% pushed up by energy prices.
What is the difference between a correction and a crash?
There is no official definition. A correction is usually taken to mean a decline of 10% to 20% that the market absorbs without widespread distress. A crash is a deeper fall, often 25% or more, driven by forced selling, that takes many years to recover.
Should I wait for prices to fall before I buy?
It depends on your timeline and your payment, not on a forecast. If you plan to stay for many years and can carry the mortgage at higher rates, today's buyer's market gives you more choice and negotiating room than any time in a decade. If you would be stretched, waiting costs little while prices are flat.
Follow the market month by month
Our monthly statistics page tracks Greater Victoria sales, inventory and benchmark prices as soon as the Board publishes them.
Victoria market statisticsOur long-cycle outlook to 2040Photos from Wikimedia Commons, used under the licences linked in each caption.