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Three Forces Behind Today’s Hot Real Estate Market

Three forces have come together in a “perfect storm” to create Victoria’s hot real estate market: environment, economics, and exposure.

It’s no secret Victoria is considered the “California of Canada”, and Boomers across Canada have moving to Victoria in mind as they make their retirement plans. In a 2015 survey, over fourteen percent of retiring Canadian Boomers surveyed stated they would like to retire in Victoria. And no wonder! Victoria has the highest number of annual snow-free days of any major city in Canada. On the rare occasion it does snow, it never stays for long. Blossoms begin appearing in February, the earliest in the country. We enjoy over 2,000 hours of sunlight annually, less than half the rain as Vancouver, and the temperature rarely drops below freezing or climbs above 25°C.

While Victoria home prices have surged, driven by offshore buyers, most off these buyers are not foreigners arriving after a long overseas flight, but rather a 90-minute ferry ride from just across the Salish Sea.

“Our offshore market is Vancouver. It has been for the last year,” Victoria Real Estate Board president Ara Balabanian said in an interview. “We’ve experienced the overflow from Vancouver. People are selling at very high prices over there and down-scaling over here.”

Retirees are looking at a way better retirement here than in Vancouver. After Baby Boomers sell their Vancouver home, 97 percent of which are over a million dollars, they are in the position to buy a 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.

Strong demand and a shrinking number of listings have resulted in bidding wars and sales that frequently go well above the asking price. A detached house near the University of Victoria that listed for $800,000 sold in late January for $921,000 after only nine days on the market. The home, built in 1974, attracted six bidders.

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 indeed.

Victoria is being noticed by the rest of the world. Chek TV reported Victoria ranked as second on a list of the world’s hottest luxury markets in Christie’s International’s 2016 report. Pretty good, considering Victoria didn’t rank at all in their 2014 report. With Canada turning 150, and the New York Times and Lonely Planet naming our country as the No. 1 place to visit, Victoria will increasingly be a desirable place to live, and real estate prices will very likely continue to climb.

References:
http://www.victoria.ca/assets/Business/Documents/economic-development-strategy.pdf
http://www.timescolonist.com/business/record-year-for-victoria-tourism-with-a-bright-outlook-for-2017-1.9711291
http://www.rbc.com/economics/economic-reports/pdf/provincial-forecasts/bc.pdf

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