Times Colonist

High de­mand, lack of in­ven­tory drive up re­gion’s house prices

- AN­DREW A. DUFFY aduffy@times­colonist.com Business · Finance · Canada News · Consumer Goods · Real Estate · British Columbia · Ontario · Quebec · Philadelphia Union · United States of America · Greater Victoria · Alberta

Con­tin­ued high de­mand and a dearth of buy­ing op­tions con­tin­ues to drive the price of sin­gle-fam­ily homes in Greater Victoria, ac­cord­ing to num­bers re­leased Mon­day by the Victoria Real Es­tate Board.

The bench­mark price of a sin­gle-fam­ily home in the re­gion rose in Jan­uary to $839,800, up from $828,400 in De­cem­ber and well over the $758,000 mark set in Jan­uary 2020.

At the same time, the av­er­age sell­ing price of a sin­gle-fam­ily home in Greater Victoria topped $1.22 mil­lion in Jan­uary, up from $953,190 in Jan­uary 2020.

The bench­mark price rep­re­sents changes in value for a typ­i­cal home in a spe­cific area, a mea­sure which real es­tate boards say is more rep­re­sen­ta­tive of the mar­ket than an av­er­age price.

“Our bustling mar­ket con­tin­ues to be fu­eled by strong con­sumer de­mand to own a home in Greater Victoria, driven in part by low in­ter­est rates and by the over­all de­sir­abil­ity of our larger com­mu­nity,” said board pres­i­dent David Langlois. “This con­tin­u­ing de­mand, cou­pled with our record low in­ven­tory, has re­sulted in com­pe­ti­tion for de­sir­able prop­er­ties.

“The com­pe­ti­tion for sparse in­ven­tory has pushed both pric­ing and ac­tiv­ity up and has cre­ated the very fast-paced mar­ket that we’ve been ex­pe­ri­enc­ing for the past sev­eral months.”

Langlois said a suite of fac­tors rang­ing from his­tor­i­cally low in­ter­est rates, peo­ple mov­ing up their re­tire­ment plans, renters want­ing to own be­cause of the low cost of bor­rowed money all the way to peo­ple just get­ting ex­cited about real es­tate have con­trib­uted to fu­el­ing the pace of the mar­ket.

“All the po­ten­tial de­mand fac­tors we could have in a po­si­tion to drive de­mand are go­ing full­steam ahead,” he said.

Last month 646 prop­er­ties changed hands in Greater Victoria up from the 631 in De­cem­ber and 57 per cent more than in Jan­uary of last year when there were 411.

Langlois also noted the higher end of the mar­ket has been do­ing brisk busi­ness; last month there were 25 sales of homes worth more than $2 mil­lion

Home-grown sales are driv­ing the mar­ket, ac­cord­ing to the board. Of 8,224 sales in 2020, 90.9 per cent in­volved buyers al­ready liv­ing in B.C., with the vast ma­jor­ity, 73.43 per cent, com­ing from within Greater Victoria.

Those num­bers are very close to the sales per­cent­ages in 2019, when 90.7 per cent of 7,218 sales were to buyers from B.C. and 74 per cent were from Victoria.

There was an in­crease in ac­tiv­ity from the Lower Main­land last year with just over 9.4 per cent of buyers com­ing from that re­gion, com­pared with 7.7 per cent in 2019. Last year 2.6 per cent of all buyers were from other parts of the prov­ince’s main­land, about the same per­cent­age as in the year pre­vi­ous.

And while many of Victoria’s real es­tate agents have said they have been work­ing with buyers from across Canada over the last year, less than eight per cent of all sales were to buyers liv­ing in other prov­inces.

Al­berta pro­vided the sin­gle largest num­ber of out-of-prov­ince buyers last year with

2.9 per cent, while On­tario and Que­bec com­bined for 3.8 per cent of all sales.

In 2019, Al­berta buyers were re­spon­si­ble for 3.05 per cent of all sales and 3.55 per cent came from On­tario and Que­bec.

Only 1.2 per cent of all sales (99) in the re­gion last year were to buyers re­sid­ing out­side of Canada, a drop from the 1.5 per cent (109) sales in 2019.

The U.S. ac­counted for 74 sales last year or 0.9 per cent of all sales, while there were 63 sales to Amer­i­can buyers in 2019.

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