When it comes to real estate, is Victoria the next Vancouver?
It’s a perfect storm for home sellers in Greater Victoria.
Experts say low interest rates, relatively cheaper prices and a glut of buyers are fuelling the city’s suddenly searing-hot real estate market.
“The Vancouver market has gone up fifty per cent over the last five years, and Victoria hasn’t shifted,” said economist Dr. Mark Colgate. “Suddenly you’re seeing people from Vancouver thinking, ‘I can sell my house in Vancouver, move to Victoria and there’s a lot of equity that I can use to fund my retirement.’”
Home sales in the region were up almost 54 per cent last month over January 2015, with the most sales of any January since 2002, according to the Victoria Real Estate Board.
Realtors say a significant number of those buyers are from the Lower Mainland, where increasingly astronomical prices are forcing some to look elsewhere.
While a virtual teardown for sale in Vancouver’s Point Grey neighbourhood recently made headlines for being listed at $2.398-million, Victoria buyers are getting a lot more bang for their buck.
“We’re running out of sold signs and it’s a good problem to have,” said realtor Shane King of Hatter-King Real Estate.
He recently listed a five-bedroom, 5,000-square-foot Gordon Head home surrounded by ocean views for the same price as the rundown Point Grey property.
“We’re just seeing a ton of people coming over from the Lower Mainland. It’s great value compared to what you can afford [there],” he said.
The overall number of houses listed is down – with just 2,471 listed last month versus 3,200 in January 2015 – and that has whipped up bidding wars amongst buyers desperate to jump in to the market.
King said a brand-new condo he recently sold had multiple offers and went for more than asking price just hours after it was listed.
If that kind of competition keeps up and interest rates remain unchanged, Colgate said house prices here could dramatically rise like they have in Vancouver.
“There’s no reason why we couldn’t see thirty, forty per cent house price increases here. The conditions are perfect for it,” he said. “We haven’t had growth in house prices, there’s lot of demand in Victoria, there’s lots of demand outside Victoria – so I think we could be in for a seller’s market for a long time.”
That’s bad news for potential home buyers like Andrea Howarth, who described the experience of trying to find a property “scary.”
“Being in the market, you might have your heart set on a particular house you’ve seen, and before you know it, it’s gone,” she said. “You don’t even really get time to think, you just have to bid on it.”
The VREB said the benchmark value for a home in Victoria shot up by more than 10 per cent to $618,600 in January.
Only four homes in Victoria’s core are listed for less than $400,000, the cheapest being a houseboat in Fisherman’s Wharf listed for $235,000.
A tale of two cities: On left, a rundown house in Vancouver's Point Grey neighbourhood listed at $2.398-million, on right, a five-bedroom, ocean-view house in Saanich, B.C. listed for the same price. Feb. 2, 2016. (CTV Vancouver Island)