by Mathieu Powell
The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core for May was $825,500 – a 16.8 per cent increase over May last year. The last couple of years have smashed all records as demand far outstripped supply, but we might finally be seeing the end of dramatic price increases with more inventory coming to sale with the warmer weather.
“Overall, pressure on pricing is easing because of the increase in inventory and the rate of increase of price is normalizing,” says Victoria Real Estate Board President Ara Balabanian.“ As we have predicted, we are seeing the beginning of a gradual return to a balanced market in the Victoria area.”
While the steep climb is subsiding, don’t expect prices to fall, barring a major economic downturn in Canada. Greater Victoria just has too many positives going for it: A fantastic climate and lifestyle, a strong economy, low unemployment, and historically low interest rates. That translates into a strong and continuing demand.
Dubbed the “California of Canada”, Boomers across Canada are eying Victoria as part of their retirement plan. In a 2015 survey, over fourteen percent of retiring Canadian Boomers surveyed indicated a desire to move to Victoria. That’s easy to understand. We receive the least snow, our flowers are the first to bloom, and we enjoy over 2,000 hours of annual sunlight.
Vancouver retirees are selling in droves to enjoy a better retirement in Victoria. With over 97 percent of Vancouver’s homes valued at more than a million dollars, Baby Boomers who sell their homes in Vancouver to cross the Salish Sea can buy a much nicer home in Victoria and still end up with plenty of cash in their pockets. Realtors are also noticing many young families coming over from Vancouver for the better environment Victoria offers in which to raise their children.
“Our offshore market is Vancouver. It has been for the last year,” said Balabanian in a recent interview. “We’ve experienced the overflow from Vancouver. People are selling at very high prices over there and down-scaling over here.”
British Columbia’s labour market shows little signs of straying from its impressive trajectory. In 2016 B.C. led all the provinces with employment growth of 3.2 percent. Victoria’s economy is strong and vital with many industries supporting that growth: government, education, tourism, marine and high tech. Tourism had a record year in 2016 and there is every reason to believe the tourism industry will continue to be a major driver for Greater Victoria’s economy in 2017. The tech industry is robust and growing, and Victoria is well poised as a gateway community to Pacific markets. Our economic future looks bright.
The rest of the world is taking note of Victoria too. Victoria ranked as second on a list of the world’s hottest luxury markets in Christie’s International’s 2016 report, and the New York Times and Lonely Planet named our Canada as the number one place to visit.
As Canada celebrates 150 years, Victoria will shine like a desirable crown jewel and real estate prices will very likely continue to climb.