Greater Victoria real estate on a big rebound

By Darron Kloster, Times ColonistNovember 13, 2009

Greater Victoria real estate is seeing a boom of sorts.

Photograph by: Files, Times Colonist

Victoria, B.C. - Greater Victoria real estate is on a big rebound with residential sales expected to increase by 21 per cent this year and another five per cent in 2010.

A forecast Friday by the B.C. Real Estate Association said Greater Victoria sales will hit 7,450 by the end of the year and 7,800 in 2010 — increases driven by overall confidence in the economy, pent-up demand and low borrowing costs. The forecast added average price on the Multiple Listing Service will dip two per cent to $475,000 this year, but increase by six per cent in 2010.

“I don’t think many of us thought last January, as the financial crisis was unfolding, we’d be looking at near-record activity in the market come fall,” Cameron Muir, the association’s chief economist, said in an interview. “The demand for real estate just welled up and the fact that interest rates have stayed very low has helped to build a strong demand. Victoria and Vancouver, in particular, are posting near record unit sales this fall.”

Muir said despite the rollercoaster economy, British Columbia still has 92 per cent of its labour force working. “People feel secure and see home ownership as viable,” he said, noting bidding wars on well-priced, good-location properties are common again.

The Vancouver Island Real Estate Board, covering all areas north of the Malahat, will also see increases in sales — six per cent this year to 7,200 and a 10 per cent leap in 2010 to 7,900 transactions — exceeding Greater Victoria’s total. Prices will slip by four cent this year to $330,556 and, in 2010, the average will tick up one per cent to $320,500.

Muir says a 20-per-cent sales surge across British Columbia will mean 82,900 homes will be sold this year, up from just 68,923 units sold the year before. Sales are expected to climb to 89,600 units next year.

The average annual MLS residential price in the province is expected to post a new record this year, rising two per cent to $463,200 and is forecast to climb an additional four per cent to $482,800 in 2010.

“Recovery in the B.C. economy will unfold gradually next year,” Muir said. “With sales prices in some markets flirting with record highs, affordability constraints will limit home price inflation over the next year.”