The real estate boom gripping B.C., and the city of Victoria in particular, has been historic on nearly all fronts. The frenzy to snatch up Victoria Real Estate soil kicked off after the 2013 boom in real estate in Vancouver. Bidding wars for detached homes spread like wildfire, pushing sales to a record in 2017, along with dollar volumes, which hit high prices driving the average home price up in Victoria
In response to public angst about runaway housing costs, policymakers at all levels dog-piled onto the real estate market, announcing a foreign buyers tax, mortgage stress tests and a hike in the property transfer tax. Meanwhile, the Chinese government took swift action to curb capital outflows, requiring citizens to pledge that they wouldn’t use cash leaving the country to buy property. Outflows from China plunged, however rumour has it that rich investors are still finding ways of laundering their money out of China to invest in Real Estate in Canada.
Increased taxation has pushed foreign bids aside, as a watch and hold approach is now being taken. With a $3-million purchase now requiring those buyers to cough up over half a million in levies upon closing. Local purchasers have been stymied by rising mortgage costs and tougher qualifying rules. A typical Victria household with an average mortgage would have to increase their salary two fold to be able to keep up with this ever increasing housing market.
We are optimistic that over the next few years there will be an increase in supply of housing, bringing the market into equilibrium and making housing more affordable for the average Canadian.