‘Perfect storm’ forming in South Island housing market

New report suggests prices for the South Island’s housing market, for renters and owners, are set to increase in 12 to 18 months

Multiple factors are colliding to create pent-up demand for housing on the South Island

Multiple factors are colliding to create pent-up demand for housing on the South Island

If you’ve been thinking about moving into another home but have put it off due to the recent housing spike, you may want to re-think that decision and act while you still can.

Prices for the South Island’s already intense housing market, for renters and owners, are set to go up in 12 to 18 months, according to a new report from The Real Estate Investment Network.

The third-party real estate analyst agency released the report on Greater Victoria last week, marking it as a sustainable investment market that’s poised to outperform many other non-Metro-Vancouver real estate markets in B.C.

Victoria’s extremely low vacancy rate of 0.6 per cent is forecast to remain low through 2017 and beyond.

It’s the start of a long-term trend that will see demand completely outstrip supply in Greater Victoria, with prices that will continue to rise unless action is taken.

“There are too many factors, all putting a demand on densification (that isn’t here),” said Don Campbell, a senior analyst with REIN.

“Put that on top of the already-occurring trend of moving to the South Island, and it’s a perfect storm forming.”

He said Greater Victoria needs to keep talking density, including easier secondary suite approvals, laneway cottages and detached suites, or it’s going to see a potentially out-of-control increase in street rents (prices for available suites).

Vancouver’s much-ballyhooed foreign buyers tax does in fact shift demand to Greater Victoria. However, it’s only one of many factors causing the upward movement of property demand and values, the REIN study found.

“A few offshore buyers will consider Victoria, and you’ve always had people moving here from the Prairies, that’s not changing,” Campbell said.

The pressure comes from the 27 per cent of Canadians who are baby boomers, heading into retirement, and considering a move to the South Island.

At the same time, 27 per cent of the population are 20 to 29-year-old millennials, half of whom still live in their parents’ houses. They’re ready to enter the market.

The University of Victoria also brings in a great deal of renters, as 74 per cent of its 20,000 students come in from out of town.

UVic has also done a better job of keeping grads here with a startup industry.

“That’s a big dam of pent-up demand for housing and rentals in the next five years, it’s the highest pent-up demand we’ve ever seen,” Campbell said.

Making Greater Victoria attractive is new jobs and diversification of job sectors, including an increasing technology sector, with 880 tech companies creating 15,000 direct jobs.

REIN also looked at Saanich’s controversial environmental development permit area bylaw. Campbell’s consensus is that, even with restrictions on the development of EDPA properties, they’ll end up increasing in value anyways.

“Anytime you have a restriction on densification, you’ll have an imbalance, and in Saanich in 12 to 18 months there will be a real imbalance,” Campbell said. “That’ll exist until there’s more stock available for people to move to.”

 

Just Posted

VicPd are asking for the public’s help in finding Camper, a lost pit bull who ran away after their owner’s van was reportedly attacked by a man with a hammer on June 12. (Courtesy of VicPD)
Edmonton man reportedly smashes van’s windows with hammer while woman and her dog inside

VicPD are asking for help to find Camper, the woman’s dog who ran away during the Friday incident

A temporary urgent and primary care centre will open in Esquimalt this week, offering residents more health care options in their own community. (Black Press Media file)
Esquimalt’s temporary urgent and primary care centre to open Monday

The Esquimalt Health Unit will house the temporary site, permanent location opening in December

A client and a staff member embark on an art project at Oak Bay United Church. (Christine van Reewyk/News Staff)
VIDEO: Oak Bay group of adults with developmental disabilities promotes community inclusivity

Victoria Community Connections moved to Oak Bay late last year

Red arrow shows the existing warehouse that is home to a variety of specialized equipment used by the Capital Region Emergency Services Telecommunications (CREST). The service provider is looking for a new home that will protect the equipment in the event of an earthquake or other natural disaster. (Google Maps)
CREST telecoms look to find a post-seismic facility in Greater Victoria

The move will better protect equipment vital to its 50 emergency service clients across the CRD

(Black Press Media file photo)
FRESH AND LOCAL: Greater Victoria farm markets ready to greet shoppers

A list of markets on the go this spring and summer, right into fall

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Police cars are seen parked outside Vancouver Police Department headquarters on Saturday, January 9, 2021. THE CANADIAN PRESS/Darryl Dyck
Vancouver police officer charged with assault during an arrest in 2019

The service has released no other details about the allegations

Denmark’s Christian Eriksen receives medical attention after collapsing during the Euro 2020 soccer championship group B match between Denmark and Finland at Parken stadium in Copenhagen, Saturday, June 12, 2021. (AP Photo/Martin Meissner, Pool)
Denmark soccer player Christian Eriksen collapses during game against Finland

Eriksen was given chest compressions after collapsing on the field during a European Championship

Members of the Department of Fisheries and Oceans’ Marine Mammal Response Program rescued an adult humpback what that was entangled in commercial fishing gear in the waters off of Entrance Island on Thursday, June 10. (Photo courtesy Marine Mammal Response Program)
Rescuers free humpback ‘anchored’ down by prawn traps off Vancouver Island

Department of Fisheries and Oceans responders spend hours untangling whale

As stories of the horrors of residential schools circulate after the Tk’emlups te Secwepemc First Nation announced it had located what are believed to be the remains of 215 children, Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said he feels a connection with the former students. THE CANADIAN PRESS/Darryl Dyck
2 sides of the same coin: Ex-foster kids identify with residential school survivors

Grand Chief Stewart Phillip says the child welfare system takes Indigenous children from their families

Nathan Watts, a member of the Tseshaht First Nation near Port Alberni, shares his story of substance use, a perspective he said isn’t seen enough. (Photo courtesy of Nathan Watts)
Public shaming, hate perpetuates further substance use: UVic researcher

Longtime addict Nathan Watts offers a user’s perspective on substance use

Most Read