Real estate is a hot topic. It is politically charged and affects nearly everyone. It鈥檚 rare a day goes by that some aspect of real estate isn鈥檛 in the news.
Why is this happening, and why now?
First, 2016 saw record numbers in the Greater Victoria real estate market that pundits and forecasters didn鈥檛 predict. The number of transactions in the region increased on a year-over-year basis by more than 28 per cent and the MLS Home Pricing Index (HPI) benchmark value for single-family homes in the core area rose by almost 24 per cent.
Beginning in February 2016, the Victoria real estate market got hot, and people from around the world started to pay attention to our small but desirable community.
We saw such a marked difference in our market because of a perfect storm of conditions:
鈥� Mortgage rates were (and remained) low and predictable for an extended period of time
鈥� The employment rate in the province, and particularly in Victoria, was solid, leading to strong in-migration
鈥� The product mix of homes in our area was varied and affordable compared to many major cities
鈥� Our climate and lifestyle received favourable exposure in the world media
These factors and more contributed to the record breaking market in 2016.
Most Realtors will tell you that the housing market goes in cycles, and that they much prefer working in a balanced market than one which is heavily weighted in favour of buyers or sellers.
As we head into spring, inventory levels are very low and new supply is being absorbed quickly due to the many buyers looking to buy. This demand puts pressure on prices, and as of this writing the MLS HPI benchmark price for a home in the Victoria core is at a record high.
The housing market is also affected by outside influences. sa国际传媒 Mortgage and Housing Corp. recently increased premiums on mortgage insurance, which may affect the spending power of some home buyers.
On the other hand, the province has rolled out a program to assist first-time home buyers with access to interest-free loans to help fund down payments. Increases or decreases in mortgage rates will also affect home buyers and owners.
New taxes on foreign buyers in Metro Vancouver may push international buyers to the Victoria area. Changes in other provincial economies may also influence some decisions to move west. These factors (and many more) can potentially create increased demand.
It is typical in a market cycle for activity to slow down and speed up. We certainly see this on the supply side, and along with the return of spring weather we see more properties coming on the market as the popular spring buying season gets under way.
Will the future for Victoria real estate see continuing strong demand?
No one has a crystal ball, but it is likely that as long as our region is experiencing favourable economic conditions and continues to offer the pleasing lifestyle it has come to be known for, homes will continue to be in demand.
Since we are on an island, our future supply of land is finite and this alone drives demand. New developments and our area鈥檚 ability to look at how we rezone or use existing properties may help to keep pricing stable so new opportunities can match demand.
Victoria is an amazing city 鈥� and the word is out both on and off the island that it is a great place to live and work.
It is our hope that with smart development and growth, Victoria will be able to meet consumer demand and provide a range of housing that will address the needs of all folks 鈥� from first time homebuyers, empty nesters, investors and all types of buyers in between.
听
Ara Balabanian is president of the Greater Victoria Real Estate Board.