The capital region’s record-setting real estate market in 2015 is showing why residential property assessments are climbing in Greater Victoria.
Last year’s sales through the Multiple Listing Service totalled $4.29 billion, easily eclipsing the 2007 high of $4.14 billion, the Victoria Real Estate Board said Monday as it compared figures from 1990 to 2015.
The benchmark value of a single-family home at the end of December in the core area of Victoria was $613,000, up by 9.4 per cent from the previous year at $560,900, the board said. A benchmark represents a typical property within a particular market area within the region.
Back in 2007 when the market was ultra-hot, the average price of a single-family house in the region was $565,904. An average price does not represent a typical property; rather, all properties in the region are included in this calculation.
Sales were strong in 2015. The year ended with 8,295 transactions. That’s an increase of 23.8 per cent from 2014, the board said. The number of sales in 2015 is among the highest the board has seen, but not a record. In 1991, there were 9,241 sales. In 2007, there were 8,931 sales.
Board president Guy Crozier predicts the active market will continue this year. “It is hard to imagine 2016 won’t bring more of the strong demand we saw throughout 2015.”
Inventory has tightened up. The number of properties for sale at year’s end was 2,517, down from 3,210 a year earlier.
“The inventory available for sale lags behind historical levels and, if sales continue to be strong, it will be hard for inventory to bounce back,” said Crozier.
Property assessments will move up by an average of between two and nearly eight per cent in the capital region, said Reuben Danakody of B.C. Assessment.
“All the areas that have historically trended above others are doing the same thing again,” he said.
These include single-family homes in sought-after neighbourhoods such as Oak Bay, Cadboro Bay, North Saanich and Central Saanich, Danakody said. Strong sales numbers “demonstrate there is good confidence in the real estate market here.”
As sales climbed, values increased, he said. “It wouldn’t surprise me that part of it has got to do with the spill-over effects of what is occurring in the Lower Mainland, Vancouver particularly,” Danakody said.
Buyers in the capital can find a “very nice home” in the $500,000 to $750,000 range, he said. But in the Vancouver area, $1.6 million or $1.7 million will buy a 1950s or 1960s-style house, “which are prime candidates for tear-down over there.”
Victoria’s market is buoyed by the region being a desirable place to live. It includes people retiring or moving here to work for government or at post-secondary institutions, which helps to fuel new homes and condominiums. Danakody said.
After the 2008 recession, some condominium projects shut down, sales rates slowed and financing was difficult to obtain. “[But now] we are starting to see a lot of new construction,” Danakody said.
Condo projects will continue, he said, adding most areas have strata projects in the works, especially in the West Shore.
The local hotel sector has also seen an active year with at least six sales, most for less than $10 million. “We are seeing a lot of offshore investors,” he said. “That gave us a real good comfort to move up values. We are probably going to see substantive increases of at least 20 to 25 per cent.”
Commercial-retail properties will see increases of between 10 and 12 per cent, as some shopping centres have completed major renovations, he said.