Greater Victoria’s housing prices are expected to climb 15.4 per cent this year from last year and by another 6.2 per cent in 2017.
That’s the B.C. Real Estate Association’s prediction in its latest housing forecast for the province, released today.
The outlook analyses the heated real estate market in the capital region. The average price of a single-family house hit $763,517 last month, giving sellers returns they wouldn’t have expected a year ago.
The association said the average price, for all types of housing, including condominiums and townhouses, will reach $602,000 this year, and $618,000 in 2017.
Buyers have found stiff competition as they fight among multiple offers.
That’s not all. Capital region sales numbers are likely to follow their current rapid pace, outstripping records month after month.
This year, a record 8,960 homes are predicted to change hands, beating the previous record of 8,403 set in the 2007, prior to the recession.
“The nearly 14 per cent year-over-year is the fourth consecutive year of sales growth,” the association said.
Strong economic performance and a higher population are driving these numbers, it said.
Job growth, consumer confidence, the B.C. public service base in Victoria, a booming tourism sector, and close to $12-billion in major projects underway all fuel housing demand.
As sales numbers jump, inventory drops, putting additional pressure on house prices, the report said.
Home builders are putting up units to help meet demand, but more construction will be needed in the capital region to keep price increases from accelerating even more, it said.
While some are reeling from price increases in the capital region, Vancouver-area buyers are facing an expected price increase of between 22 and 25 per cent this year.
A single-family house in the Lower Mainland is now often considered to be a luxury product.
Greater Victoria is home to many high-end properties, a segment that Sotheby’s International Realty Canada anticipates will remain strong.
The first five months of this year saw 388 single-family homes sold for $1 million or higher in the capital region, the agency said in new report. That’s an increase of 240 per cent from the 114 homes sold in the same months last year.
In the $4-million-and-up category, a total of eight houses have sold so far this year, compared to none in that range for those months last year, Sotheby’s said.
“We expect the intensity experienced in the first few months of 2016 to remain into the foreseeable future,” Tom Stratton, managing broker for Sotheby’s in Victoria and Kelowna, said in a statement.
There are currently 18 residential properties for sale at $4 million and higher through the Victoria Real Estate Board’s multiple listing service.
The highest priced is 529 Swanwick Rd. in Metchosin at $28.8 million, followed by 3195 Humber Rd. in Oak Bay at $14.9 million, 6342 Old East Rd. on the Saanich Peninsula for $12 million, and 9344 Ardmore Dr. for $11.8 million.
Sotheby’s said luxury homes sales are propelled by such factors as economic optimism, strong employment, Vancouver and Alberta buyers, and increased awareness of Victoria as an investment opportunity from Chinese buyers.