Economy & Markets

The city is attracting baby boomers from Vancouver and across the country

By Canadian Press |
Source: The Canadian Press

It's still the dead of winter in much of Canada, but in Victoria daffodils and crocuses are about to begin sprouting, marking the unofficial signal to start another real estate season for anxious home buyers and sellers.

The Victoria Real Estate Board says a repeat of last year's record-smashing property sales that saw constant bidding wars on southern Vancouver Island is not in the forecast for 2017. But prices are expected to continue rising amid a market of too few available homes.

Expectations that foreign buyers would flock to Victoria to avoid the 15% Metro Vancouver home tax has not happened, instead purchasers are arriving from other areas of the country, outgoing Victoria real estate board chief Mike Nugent said Monday.

"There's certainly no evidence so far of showing a big shift of foreign buyers to Victoria," he said. "As soon as it was implemented everybody phoned and said, ‘what are the numbers like? You must be getting an avalanche."'

Government data shows there were 90 deals involving foreign buyers in Victoria between June 10 and Aug. 1, before the tax was implemented. In the latest numbers, Nov. 1 to Nov. 30, there were 39 property transfers involving foreign buyers.

The percentage of property transfers involving foreign buyers in Victoria went from 3.9% in June to August, before the tax, to 4.6% in November.

In the Vancouver area, there was a steep drop in real estate transactions after the tax took effect.

The data reveals the number of property transfers in Metro Vancouver went from a high of 1,974 just prior to the introduction of the foreign buyers tax to a low of 60 in the weeks after the tax. The number started to move upwards last November, hitting 204 property transfers involving foreign nationals.

The Real Estate Board of Greater Vancouver reported a roller-coaster year in 2016, with record sales in the spring, but ending the year with a 5.6% drop compared with 2015.

Nugent said while Vancouver has had dropping prices, in part due to the foreign buyers tax, Victoria real estate values are expected to continue slowly moving upwards.

"In Victoria, because we've got so few places available — all our projects are sold out — and because of the shortage of inventory even though sales will be less, we expect prices to continue to keep inching up," said Nugent. "There's more buyer demand than we can supply right now."

People are looking for a lifestyle change when they move to the Victoria area and it's producing a migration from Metro Vancouver and from right across the country, he said.

Baby boomers from Vancouver are selling their homes for large pay outs and moving to Victoria, where they can buy a similar or larger home for less money, Nugent said. He said the Victoria area is also seeing people move for economic opportunities.

"Our economy is one of the best in the country right now," said Nugent. "We've got lots of jobs happening in all sectors. That's attracting everybody."

Nugent said the real estate board does not have the final numbers tracking where people are coming from when they move to Victoria, but preliminary results places about 65% of the buyers from Vancouver Island and about 9% from the Vancouver area.

B.C.'s most recent in-migration and population numbers released Dec. 16 by BC Stats, which tracks provincial trends, estimated the province's population at 4.7 million. This is an increase of almost 22,000 people in the third quarter of 2016.