The Greater Victoria region might not sound as illustrious as Sydney or Hong Kong, but if you travel around the vast Pacific Rim, as Mark Roozendaal of Preferred Homes recently did, a clear message emerges: Victoria has a strong international reputation.
“We are like a mini world city,” he said.
This international reputation is one of the reasons why Victoria has seen a 10 per cent spike in the sale of properties over $1 million during the first seven months of 2017 compared to the same period in 2016, according to a report from Re/Max Canada. This development places Victoria in the same category as Calgary, the Greater Toronto Area (GTA) and Oakville, Ont. where sales of luxury homes rose by various rates.
First things first. Roozendaal acknowledges a level of price inflation. While homes selling for $1 million and above qualify as luxury, there is luxury and then there is luxury. But even if we raise the luxury threshold, Victoria has seen a spike, said Roozendaal. Between January and July of 2016, 12 homes above $3 million sold in the region, he said. Between January and July of 2017, 20 sold.
Compare these figures to developments in Vancouver, where sales of $1 million-plus single-family detached homes declined 32 per cent during the same period.
The report cited among reasons the foreign buyer tax that the previous provincial government passed in August 2016, as the tax discouraged offshore buyers entering this segment of the market. At the same time, a strong mix of demand from downsizing baby boomers, foreign buyers and affluent younger couples led to an 11 per cent year-over-year increase in luxury condo sales in Vancouver, it read.
Luxury condo sales in Victoria also rose to 38 units from 27 units, said Roozendaal.
Buyers fall into three groups, he said. The first are what Roozendaal calls downsizers, who might have sold their larger homes in more expensive real estate markets like Vancouver. The second are citizens of the United States, who are moving to Canada because of the current political situation in that country following the presidential election of Donald Trump. The third are families who are moving to Victoria from all over the world, as well as Canada, to take advantage of the region’s education system, safety and quality of living.
While buyers from Asia constitute a group of foreign buyers, Roozendaal says the numbers are not as high as people might think.
“We definitely see it in Victoria, but it’s actually a small demographic,” he said.
Overall, Roozendaal expects that Victoria’s luxury segment will continue to grow. Christie’s International Real Estate earlier this year ranked Victoria just behind Toronto in terms of being the fastest growing luxury real estate market in the world.
According to the report, Victoria “witnessed its best year ever for luxury home sales” in 2016.
Victoria, he said, has massive upside potential when it comes to the condo market, he said. Victoria’s large waterfront will also continue to draw interest, he said.