Victoria is a seller's market where home prices will stay strong -- particularly in the first two quarters of the year -- thanks to low interest rates, tight inventories and rising consumer confidence, says one of Canada's leading real estate companies.
According to Royal LePage's market survey forecast, released yesterday, Vancouver's average price for an existing home is predicted to rise 7.2 per cent this year over last year. Victoria was not included in the forecast of major metropolitan centres, but price increases aren't expected to be as high here as in Vancouver, said Carol Geurts, president of Royal LePage Coast Capital Realty.
"I think we are going to see our biggest increases in early spring and that might be it for the year," she said. "So much is tied to what the interest rates are going to do."
Predictions by Royal LePage line up with those by the Victoria Real Estate Board and other industry watchers, who expect inventories to increase and interest rates to rise later in 2010.
"I think steady-as-she-goes is probably what we're looking at, at least for the first two quarters of this year."
Buyers' confidence is up, she said, adding her office was busy through to the end of December and into this month. "It maintained a good clip all through the holidays."
The strongest demand is for homes priced at $600,000 or less with revenue potential. These are attracting multiple offers, Geurts said, adding "we are certainly in a seller's market here."
Despite the global economic turmoil last year, Greater Victoria sales rebounded in the last half of 2009. The final quarter resulted in an average price for a detached bungalow at $474,000, up by 7.7 per cent from the average price in the final quarter of 2008, Royal LePage said.
The average price for a standard two-storey house moved up by 3.7 per cent in the capital region, to $449,000 in the last quarter of 2009, from $433,000 in the final quarter of 2008.
The average price of a standard condominium in the capital region remained flat for those two quarters, at $265,000, the report said.
Nationally, home prices are expected to moderate in the second half of this year, Royal LePage said.
The country's real estate market is starting the year with "considerable momentum" from the strong finish to 2009, said Phil Soper, president and chief executive of Royal LePage Real Estate Services.
"The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity levels to new highs. This demand ... should cause home prices to continue to appreciate significantly during the early months of the year."
In the last quarter of 2009, the national average price of detached bungalows increased six per cent to $315,055 compared to the same quarter in 2008. The price of standard two-storey homes rose 5.2 per cent to $353,026, and the price of a standard condominium rose 6.4 per cent to $205,756.
