In my first VV post I remarked how rental prices in downtown aren't much higher than in the nearby suburbs for similar units, until you get to the Westshore or Central Saanich; I suppose there's a systemic preference for that. People (particularly families and older folks) would rather live in a quiet residential neighborhood a couple of kilometers from the core than live where noise, pollution and crime are concentrated, even if it would be convenient. Victoria isn't a big city so even a neighborhood by the countryside like Royal Oak is a manageable drive away from work and entertainment. Most of the regional population doesn't need to spend 1+ hours behind the wheel every workday.
There's probably some supply-and-demand at work too; tons of older rental stock in and around downtown that drives competition but outside of some main arteries there are few rental options in Saanich. So if the preference for residential silence that's not too far from town does exist, then the scarcity of rentals would also drive their price up. Cadboro Bay's charm comes in part from a lack of long-term renters, if you will.
Now, downtown rental price tags can be a bit misleading because there's a lot of penny-pinching; your unit probably doesn't come with parking, you might have to pay extra for storage and your bike needs to go somewhere that won't get stolen overnight. For new rentals those things can easily add up to $200+ per month. But the difference is still not very pronounced. Good for the car-ditchers, who might pay less bills living downtown than those living much further away.
(but aha - no car equals no Costco trips! What do you say now, Kev?)