Victoria’s residential housing market marked a notable turnaround in 2013. Sales gained traction throughout the year, with a solid rally evident over the summer months. The upswing in momentum should see transactions surpass 2012 levels, as 5,800 homes change hands in the city by year end. Inventory has receded and conditions have largely stabilized, with the number of new listings becoming more consistent with traditional patterns. First-time and move-up buyers worked in unison to bolster demand virtually across the board. Purchasers, previously enticed by value south of the border, are returning in growing numbers, encouraged by opportunity in their own backyard. Average price remains level—expected to hold at $484,000 for yet another year— finally resuming a growth trajectory in 2014. In the interim, purchasers believe good value exists, as average price remains off peak. Activity is strongest at the entry-level price point in each segment. At the lower end, newer, reasonably-priced condominium units, offered under $300,000, are moving well, while on the move-up side, single-family homes priced under $500,000 are garnering attention. The upper end of the market (over $1 million), where price adjustments continue to provide considerable impetus, posted double-digit growth this year. The greatest shift evident in 2013 was in consumer optimism, as confidence builds in Victoria and throughout the province. Although government fiscal restraint and reduced capital investments limited economic performance in 2013—GDP growth in the province demonstrated a weak 1.5 per cent gain—some improvement is on tap heading into the new year. The city of Victoria is expected to benefit from strengthening recovery in the U.S., which should serve to bolster trade and tourism. An improving jobs picture will support housing demand, along with the continuation of low interest rates. Activity in the construction industry should edge higher, as the number of housing starts climbs modestly.
GDP growth in the province overall is expected to nearly double from year-ago levels, moving forward by 2.7 per cent in 2014, as British Columbia’s natural resource sector regains renewed momentum. Victoria’s enhanced outlook should result in a further upswing in residential unit sales in 2014, climbing four per cent to 6,000 units. Average price is expected to record a welcome gain of one per cent, rising to $490,000 by year end. Balanced conditions should characterize the market moving forward, although some slowing may emerge in the resale condominium segment, given the introduction of depreciation/deferred maintenance reports which will impact future condominium fees. As a result, newer buildings are expected to gain favour. One innovative project has generated surprising interest—a micro-loft offering in the downtown core [The Janion] —sporting 250 to 500 sq. ft. units, starting from $100,000. While affordability returns to the spotlight, with the return of rising prices, and unique solutions, sales at the top end are expected to inch up again— another sign that the market has regained some lustre.