Vancouver’s turbo-charged real estate market already has buyers and businesses looking at Vancouver Island, and that is likely to increase in light of the provincial government’s recent 15 per cent tax hike for foreign buyers.
Realtor Mike Nugent, president of the Victoria Real Estate Board, said that in 2015, the VREB handled about 8,000 property sales, a total he expects will rise to 11,000 in 2016.
Buyers in Victoria from Vancouver and other countries represented about two-and-a-half per cent for 2015, a total consistent with most recent years on average, Nugent noted, but he expects that to increase significantly once figures are finalized for 2016.
“Some immigrant buyers and buyers from the Mainland seem to like Saanich, Gordon Head, Oak Bay and Fairfield because those neighbourhoods are close to UVic,” Nugent said. “It could be up to a quarter of the sales for some of those neighbourhoods [by the end of the year].”
The B.C. Real Estate Association’s latest projections call for an increase in home prices of 15.4 per cent this year, followed by another 6.2 per cent in 2017.
A Chartered Professional Accountants of B.C. Regional Check-Up Report indicates that a surplus of home buyers equates to population growth, increased housing starts and overall job creation.
Eric Erikson, CFO for Redlen Technologies attended a CPABC Victoria economic roundtable earlier this summer. He said in a media release that the impact of Vancouver’s real estate market on Victoria is “massive.”
“We’re starting to see bidding wars that we’ve only heard of in Vancouver,” he said, citing as an example a home in Victoria listed for $800,000 that sold recently for more than $900,000 after offers were presented on a specific evening. “Cars were lined up around the cul-de-sac and not one of the potential buyers was from Victoria.”
High real estate prices in Vancouver are also responsible for driving talent in the $4 billion tech industry to Victoria, said another roundtable participant, CPA Mark Mawhinney an investment advisor at Odlum Brown Ltd.
Victoria’s amenities and culture are the most similar to Vancouver, he noted. “You can have a very fulfilling professional life here and I think Vancouverites are starting to figure that out,” he said. “Certainly the tech industry is seeing that. A number of Vancouver tech companies are opening offices here and relocating their staff.”
Sonterra Ross, a CPA and COO of the Greater Victoria Harbour Authority, indicated the salary level matched against housing and living costs is responsible for an increase in talented young people considering a move to Victoria.
“For young professionals and their families, if they can get a good paying job here in Victoria and enjoy a lower cost of living, they’ll relocate here. It’s an opportunity for them to minimize debt and save,” said Ross, another participant at the CPABC roundtable.
The influx should address the challenge of finding qualified people, an issue common to many businesses in Victoria, said Simon Philp, director and team leader at CIBC. He added that relying solely on the quality of life to retain those workers could cause other issues
Chuck Chandler, a resident partner at Hayes Stewart Little & Co. in Victoria, said in CPABC editorial that it is important for the sustainability of the regional economy to take advantage of the growing in-migration and subsequent real estate boom.
“Growth in population means that businesses will benefit from a bigger pool of skilled talent,” Chandler said. “However, as a region we must work to retain incoming talent by offering greater incentives beyond higher wages to individuals and not rely solely on quality of life to retain them.”
For more on the CPABC Regional Check-up, check out bccheckup.com.