Based on REIN’s Real Estate Cycle Scorecard Clock, the economic fundamental key drivers and the market influencers says the Victoria’s real estate market is in the “middle to end of [a] recovery.” Submitted

Report suggests Greater Victoria headed for another real estate boom

Report by Real Estate Investment Network (REIN) says region in middle of a technical recovery

Believe it or not, a new report argues that Victoria is about to experience a real estate boom.

“The boom has yet to hit Victoria,” said Jennifer Hunt, vice-president of the Real Estate Investment Network (REIN), a Vancouver-based company that offers education, analysis, and research among other resources to real estate investors. “There is still runway to enter the market.”

Hunt made those comments after the company released a report that surveyed the Top 10 cities in British Columbia for real estate investors, with Victoria finishing fourth behind the leading trio of Surrey, Abbotsford, and New Westminster. Kamloops, Kelowna, Chilliwack, the Tri-Cities, Burnaby, and Vancouver follow Victoria to round out the Top 10.

Drawing on 17 criteria, the report categorizes surveyed cities across three conditions: boom, recovery and slump. Each of those conditions in turn requires different investment techniques during different phases of each cycle. Overall, the report identifies three investment techniques: ‘buy and hold,’ ‘rent to own,’ and ‘fix and flip.’

Vancouver, for example, currently finds itself at the end of a boom on REIN’s real estate cycle clock, a visual representation of this concept. Accordingly, investors should avoid buying and holding properties, because prices have hit a peak.

Victoria, according to the report, finds itself in the “middle to end of [a] recovery.” Accordingly, the report identifies ‘rent to own’ as the ideal investment technique. It also identifies ‘buy and hold’ as a good technique, because prices still have room for upward mobility.

This assessment raises an obvious question: how can Victoria be in recovery, when prices, have been heading in only one direction, namely up. According to House Victoria, a blog tracking local real estate figures, the median price of a detached home in Victoria now approaches $750,000. Four years ago, it was just over $500,000.

Hunt and her co-author Don R. Campbell address this question early in the report when they acknowledge that readers might be surprised to learn that many markets including Victoria find themselves in a ‘recovery’ phase.

“The label of “recovery” doesn’t just mean it is coming out of a slump; it is a technical term describing the combination of the underlying fundamentals and comparing them to how the market could perform in the future,” they write. “Strategic investors understand that the label is not what matters; it is the underlying structure. There’s so much noise built into the statistics in B.C. after such a strong run upwards, it’s hard to believe that the real ‘boom’ statistics haven’t hit yet.”

So what accounts for Victoria’s attractiveness for investors?

First, it has a strong, diverse economy. “According to the most recent data, Victoria surpasses the national median income, and boasts one of the highest median incomes in British Columbia at $89,640 compared to the provincial median income of $79,750,” the report reads. “This, combined with affordability, attracts people from Metro Vancouver and beyond.”

Second, it has a growing population. Greater Victoria’ regional population grew by 6.7 per cent between 2011 and 2016 to 367,770, almost two per cent faster than the national average of five per cent. “And this is the real reason behind the strong housing demand and price increases. Greater Victoria’s population is projected to grow by four to five per cent every five years between 2015 and 2025,” it reads.

The report also points to Victoria’s low rental rates as an incentive for investors.

“In conclusion, a strong rental market, a diverse economy, inherent seat-of-government stability, location, relative affordability, and high median income, are key factors that give Victoria an edge over other top towns and cities in British Columbia,” it reads.

Just Posted

The 38th annual New Year Classic saw 172 players in 226 matches

New lights in Oak Bay tennis bubble illuminate local talent

Passengers bound for Victoria say Sunwing left them stranded in Abbotsford

Company says late arrival led to difficulties securing accommodation, transportation

Third Victoria person pricked by needle in past week

Police say this one appears to have been deliberately placed

Police ticket driver after van found perched on logs near Esplanade in Oak Bay

Ticket issued for Drive Without Consideration with a fine of $196

Cabaret comes to Oak Bay

Company C stages Tony Award-winning musical

Spike in graffiti for Oak Bay

“Someone knows who this is and I encourage them to call us or Crime Stoppers”

Senior randomly stabbed in B.C. mall food court

Woman arrested after victim, 71, suffers serious injuries

Cougars clipped by Bucs, remain tied for first in South

Victoria junior B puck squad neck and neck with Saanich

B.C. Liberal hopefuls begin final leadership push

Five MLAs, one outsider pitch policies to party members

Victoria hits the road after weekend wins over Kamloops

Western Hockey League club in Portland on Wednesday night

UPDATED: ‘Young, innocent’ teen hit during Vancouver shootout dies

15-year-old Coquitlam boy was in a car driving by the scene

Ontario man charged with selling Canadian’s usernames and passwords

Ontario man ran site that peddled billions of pieces of personal data: RCMP

Video: B.C. documentary features Okanagan ice climbing

First documentary for Penticton filmmaker captures elusive Okanagan ice climbing

David Emerson quits lumber talks as legal action begins

Former federal minister served as B.C. softwood trade point man

Most Read