No “one thing” pushing real estate boom: VREB

There is no single factor leading to the region's red hot housing market, according to the Victoria Real Estate Board.

In the movie City Slickers, Jack Palance, (Curly) utters a now-famous line about how the secret to everything comes down to “one thing.” He holds up a finger, smiles knowingly, but never discloses what the “one thing” might be, leaving Billy Crystal (Mitch) completely befuddled and unsatisfied.

Mike Nugent, president of the Victoria Real Estate Board (VREB), maintains homebuyers or sellers looking for a single explanation of everything in Victoria’s current real estate boom are just as unlikely to find a simple factor for the market conditions.

Nugent said it’s obvious Victoria is riding a strong housing sales market right now and there is no end in sight.

A total of 1,286 properties sold in the VREB region this April, a 53 per cent increase from the same month last year. But Nugent stressed a host of factors have combined to cause the boom in the market and trying to decipher the causes to gain an advantage is not likely to be successful.

“I’ve heard people say that it’s foreign buyers, or buyers from the mainland cashing in and moving to Victoria who are pushing up demand, but it’s not the main factor…again, there is no one thing,” said Nugent.

Popular wisdom attributing the hot market to foreign buyers is not borne out by statistics complied by the VREB which indicate that buyers from the U.S. have increased by only 0.2 per cent and buyers from Asia showed a similarly modest increase of 0.1 per cent.

Nugent acknowledged some truth in the belief that Lower Mainland buyers are cashing in on a bullish real estate market in Vancouver and surrounding areas and moving to Victoria, an action leading to increased demand here. VREB statistics show, in 2015, 8.2 percent of buyers originate on the mainland.

“If you look at the statistics, Victoria generally has a movement of about 25,000 people. Generally that number evens out, with about half moving off the Island and half moving here to stay. Last year we had a net positive movement of about 6,000 and that increase in numbers is significant given our relatively small population,” said Nugent. “It’s bound to put pressure on the market.”

But he was quick to add a plethora of other causes are feeding the boom.

“Real estate is always cyclical, and we are coming out of what was a steadily declining market after the 2008 financial crisis. We had almost five years where the market was very flat and the herd mentality being what it is, people just didn’t want to commit to a home purchase because they were concerned about the economy and saw others holding off…so they did as well,” said Nugent.

He said the same group think has now fueled a belief that it’s a time to get into the market for a new home.

Another factor adding to the increase in housing sales lies in demographics, said Nugent. Aging baby boomers are downsizing, selling the family home to get into smaller accommodations, while the millenial generation is entering a point in their lives where a family home is wanted by many.

Finally, Nugent said Victoria’s geography means the amount of land for new construction is very limited.

“We have some densification with the construction of condos in the downtown area of Victoria, but the main possibilities for new housing (in the region) are out on the West Shore. That increases the demand for housing in the downtown area and when homes do become available near downtown they can generate multiple offers.”

Regardless of the causes for the current real estate boom, the best advice when buying or selling a home is still to use a reputable realtor, said Nugent.

“Work with a realtor…they know the market and they know what they’re doing.”

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $10.25 million. (Realtor.ca photo)
Located at 9750 West Saanich Rd., this North Saanich mansion is on the market for $8.65 million. (Realtor.ca photo)
The five most expensive homes for sale in Greater Victoria

A roundup of luxury estates currently on the market

BC Coroners Service is currently investigating a death at Canoe Cove Marina and Boatyard in North Saanich. (Black Press Media File)
Drowning death of North Saanich likely first in B.C. for 2021

Investigation into suspected drowning Monday night continues

Jimmy Fallon joked that a woman’s 4.5-star review of a Langford jail is “the most Canadian thing you could do” in The Tonight Show Jan. 21. (Screenshot/YouTube)
VIDEO: Jimmy Fallon jokes Canadian jails are basically hotels following woman’s 4.5-star review

Woman gave handwritten card to police following stay in Langford cells

Sidney's Beacon Wharf
Pontoon company piqued at prospect of public-private partnership around Sidney wharf

Seagate approached to submit proposeal for public-private partnership

Following a cease work order from the District of Highlands in October, the BC Supreme Court ruled Jan. 20. that bylaws won’t apply to O.K. Industries’ work until its quarrying activity is complete. (Courtesy of District of Highlands)
BC Supreme Court rules Highlands quarry work can continue

District bylaws won’t apply until quarrying activities are complete

Toronto Public Health nurse Lalaine Agarin sets up for mass vaccination clinic in Toronto, Jan. 17, 2021. B.C. is set to to begin its large-scale immunization program for the general public starting in April. THE CANADIAN PRESS/Frank Gunn
B.C.’s COVID-19 mass vaccinations expected to start in April

Clinics to immunize four million people by September

Chief Public Health Officer Theresa Tam speaks during a daily briefing in Ottawa. (THE CANADIAN PRESS/Adrian Wyld)
31 cases of COVID-19 variants detected in Canada: Health officials

Dr. Theresa Tam made announces 13 more variant COVID-19 cases in Canada

An Atlantic salmon is seen during a Department of Fisheries and Oceans fish health audit at the Okisollo fish farm near Campbell River, B.C. in 2018. The First Nations Leadership Council says an attempt by industry to overturn the phasing out of salmon farms in the Discovery Islands in contrary to their inherent Title and Rights. (THE CANADIAN PRESS /Jonathan Hayward photo)
First Nations Leadership Council denounces attempt to overturn salmon farm ban

B.C.’s producers filed for a judicial review of the Discovery Islands decision Jan. 18

Daily COVID-19 cases reported to each B.C. health region, to Jan. 20, 2021. Island Health in blue, Northern Health green, Interior Health orange, Vancouver Coastal in red and Fraser Health in purple. (B.C. Centre for Disease Control)
B.C.’s COVID-19 infection rate stays stable with 508 cases Friday

Vaccine delivered to more than 110,000 high-risk people

More than 100 B.C. fishermen, fleet leaders, First Nations leaders and other salmon stakeholders are holding a virtual conference Jan. 21-22 to discuss a broad-range of issues threatening the commercial salmon fishery. (Black Press file photo)
B.C. commercial salmon fishermen discuss cures for an industry on the brink

Two-day virtual conference will produce key reccomendations for DFO

Black Press file photo
Investigation at remote burned-out Vancouver Island cabin reveals human remains

Identity of victim not released, believed to be the owner of an SUV vehicle found parked nearby

Angela Waldick is the new team photographer for the Nanaimo NightOwls. (Nanaimo NightOwls photo)
Half-blind photographer will help new Island baseball team look picture-perfect

Nanaimo NightOwls say legally blind team photographer is making history

School District 57 headquarters in Prince George. (Mark Nielsen, Local Journalism Initiative Reporter)
Prince George school district settles with sexual abuse victim

Terms were part of an out-of-court settlement reached with Michael Bruneau, nearly four years after he filed a lawsuit

Surrey provincial court. (File photo: Tom Zytaruk)
New COVID-19 protocols set for provincial courthouses

The new rules were issued on Jan. 21, and took effect immediately

Most Read