A new report identifies Victoria as the second-hottest luxury real estate market in 2016.
Christie’s International Real Estate ranked Victoria just behind Toronto in terms of being the fastest growing luxury real estate market in the world. According to the report, Victoria “witnessed its best year ever for luxury home sales” in 2016.
So what accounts for the outcome? The reason for Victoria’s booming luxury market lies across the Salish Sea.
“The provincial capital saw a significant uptick from affluent international buyers who were deterred by nearby Vancouver’s new 15 per cent tax on overseas purchases and opted for Victoria instead,” it said.
While the definition of a luxury homes varies according to region, the average starting price of a luxury home is $2.1 million, down slightly from last year’s $2.2 million, according to Christie’s.
Local realtor Manpreet Kandola, however, suggests that the report might be guilty of hyperbole, when it calls Victoria the second-hottest luxury real estate market.
“In my humble opinion, I don’t think that is very accurate,” he said. When it comes to luxury real estate, everything is relative, he said.
“In the grand scheme of things, we are still undervalued globally, even in Canada, especially if you consider a house in East Vancouver, Burnaby or Richmond,” he said.
Average homes in those communities cost up to $2 million, while such a figure could fetch waterfront property in the Greater Victoria area, he said.
The Greater Victoria area is an undervalued “non-brainer” for buyers that offers “tremendous security and safety,” he added.
Looking at the larger picture, Christie’s report appears to be broadly consistent with a report from Sotheby’s International Realty Canada published in March. Tracking real estate figures across Canada’s four largest real estate market, Sotheby’s predicts that Toronto would continue to lead the pack in sales of homes worth over $1 million, while home sales in Vancouver would normalize.
The luxury segment of the Vancouver market – which includes homes valued over $4 million – suffered even more dramatic declines, dropping 68 per cent from a year ago to 43 units, according to the report.
Other reports meanwhile broadly identify Victoria as a location for what some media reports have called “affordability refugees” – individuals who are seeking to escape the high real estate prices of the Lower Mainland.
This said, reports like Christie’s might further stoke the general sentiment that the Greater Victoria area is becoming unaffordable.
Kandola feels their pain. “The general public is upset that prices have increased so much,” he said. “I’m very sympathetic for people who want to get into the market. It’s getting tougher and tougher.”
However, he also noted that Victoria has been here before. In the 1960s, Saanich’s Gordon Head was considered the suburbs. Now, the suburbs have moved to the West Shore.
“We all want to live here…and the secret about Victoria is out,” he said.