With a booming market across Greater Victoria, Oak Bay’s single-family homes are showing increases in value at an even greater level than counterparts in many other areas.
The recently released Royal LePage House Price Survey showed healthy increases across all housing types surveyed in Greater Victoria, where the aggregate price of a home in the third quarter rose 4.9 per cent year-over-year to $478,570.
Bungalows saw strong year-over-year price growth of 6.8 per cent to a median price of $479,171 while the median price of a condominium rose 4.9 per cent to $397,977, and two-storey homes saw an increase of 2.9 per cent to $642,374.
In Oak Bay, however, along with desirable neighbourhoods in Victoria and Saanich, the numbers are even higher.
According to the House Price Index, which looks at the most common types of homes, singe-family home prices were up 1.5 per cent between August and September. Looking at the last year, from September 2014 to September 2015, the number is about 14 per cent, says Bill Ethier, president and managing broker, Royal LePage Coast Capital Realty.
“We have a stable economy and employment opportunities remain strong in tourism, government and technology which is giving consumers confidence in our real estate market,” Ethier says.
“As new buyers enter the market, prices are increasing as a result of the heightened demand with no corresponding increase in supply.
“Victoria also continues to see buyers from across western Canada who are looking to buy retirement homes,” Ethier added.
There’s also the multi-faceted Vancouver factor.
Realtors are seeing more people selling up in high-priced Vancouver and bringing that windfall to Victoria where they can get more for their money, he says.
Others are heading for the West Coast and the lower Mainland. Once here, they realize how close the Island is, what it offers and the difference in what they can buy for the same money.
So increase demand, paired with the limited number of houses for sale, is sending house prices higher.
While other areas in the region have seen increased development on available land to accommodate new buyers, Oak Bay’s desirable neighbourhoods and limited inventory have combined to create a hot market for sellers, Ethier says, noting the area has few infill houses being built and few homeowners wanting to move.
According to anecdotal reports from contractors, that means that rather than trading to a new home, “now, a lot of people are staying in their house but renovating,” he says.
Ethier doesn’t see any signs of the market slowing down, with the recent change of government a non-issue and interest rates remaining low. “We don’t see the Bank of Canada raising rates any time soon.
“I say the market is going to stay strong, the way it is.”
Condominiums haven’t seen the same degree of increases as the single-family market, but will likely continue to rise with inflation, Ethier suggests.
Nationally, home prices showed moderate to strong year-over-year price increases in most markets in Canada.
“Economic slowdowns in energy-dependent markets, most notably in western Canada, have in part been offset by both renewed industrial activity in other parts of the country and the Bank of Canada’s recent interest rate cuts,” said Phil Soper, chief executive officer, Royal LePage.
“In line with recent quarters, strong national home price increases are largely being driven by continued double-digit percentage increases in the Greater Toronto Area and Greater Vancouver, where housing affordability is already becoming a growing challenge for many individuals and families.”
“Home ownership remains a bright light amid unsettled investment and savings options in volatile global capital markets. As we (led) up to election day, it’s not surprising that all of the major political parties (acknowledged) the housing sector’s prominence as the foundation on which the economy has been built for years, and a critical foundation upon which Canadians can build their savings,” Soper adds.
The House Price Survey provides information on Canada’s three most common types of housing, in 53 of its largest real estate markets.