Buying frenzy reaches Saanich real estate

Offshore buyers becoming a factor in the South Island

The hot local housing market has resulted in reports of open houses swarmed by buyers

With Vancouver experiencing astronomical real estate growth, there’s questions whether the spill off is affecting Saanich.

Certainly the South Island is seeing the repercussions, said Mike Nugent, president of the Victoria Real Estate Board, but the reality is it doesn’t take much to affect the market.

“We only need to see a two per cent growth in the number of offshore buyers in Gordon Head to have quite an impact.”

The VREB does track where its buyers are from, and stats show that Vancouver (or Lower Mainland) buyers make up 7.5 per cent, while 70 per cent are local Victoria buyers making lifestyle changes, Nugent said. Buyers from other parts of B.C., across Canada and offshore make up the remainder.

With that in mind, it’s becoming common place this spring to hear of open houses swarmed with buyers, multiple offers and bidding wars, not only in Saanich, but also in Victoria and Oak Bay. These are favoured neighbourhoods for the international and Vancouver buyer, Nugent said.

The word out of Gordon Head recently was that a home on Longacre Drive sold for $100,000 more than asking price, and within a week of hitting the market.

If you do consider buying or selling, be diligent. There are varying strategies going on right now, Nugent added. While many sellers will ask what is reasonable, others might try to bump up the price based on recent demand.

“You want to be strategic, the best thing is researching what you can,” Nugent said.

That said, the numbers are somewhat deceiving. The only way VREB registers if a buyer is from offshore is by checking their previous address on the sale of the house. If the buyers have been renting in Victoria for six months, then they’re deemed local.

Regardless, there is no denying the market is hot.

As of Monday, VREB’s stats showed sales up almost 250 (938) for March compared to the same month in 2015 (734), with a chance to crack 1,000 by April 1.

“It might be the highest March ever seen, but the ongoing inventory is about a third lower than normal,” Nugent said.

Couple that with historically low interest rates (2.5 per cent), and other factors such as the millennials who are coming into the market, and those who’ve been waiting since the financial slowdown to be active. Another factor is the densification of low-density downtown, where single homes are repurposed.

“Everything that can contribute to a strong market is going on right now, full green light. It seems like everybody wants in the market and there’s a herd mentality in Greater Victoria,” Nugent said. “We have a net migration, we are up 5,000 to 6,000 people per year, we’re not losing people.”

One anomaly is the higher growth in prices on the east side of the highway than on the West Shore, where construction is rapid with new neighbourhoods popping up. Over there, you can find single family homes with an average price up to $200,000 less than it is in the core.



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