Sotheby’s International Realty Canada’s latest report has found significant gains in single family home sales over $1 million in Greater Victoria from January 1 to May 31, 2016, reflecting strengthening demand for luxury homes in the region.

In the first five months of 2016, the volume of detached single family homes sold over $1 million increased 240% year-over-year to 388 units, an increase from 114 homes sold at this price range during the same period in 2015. The $4 million-plus market also experienced a significant upswing during this period, as the market absorbed ultra-luxury homes at a velocity not experienced in recent years. Eight detached single family homes in the $4 million-plus bracket sold in Victoria during the first five months of this year, a substantial year-over-year increase given that there were no single family homes sold over the $4 million-plus mark during the same period in 2015. Multiple offers and sales over asking price indicated sellers’ market conditions, and the luxury neighbourhoods of Oak Bay-Gordon Head, North Saanich and James Bay experienced some of the greatest demand within the Greater Victoria region during this time.

According to Sotheby’s International Realty Canada, demand for top-tier real estate in Victoria is expected to remain strong as the first half of 2016 draws to a close, propelled by consumer confidence due to local economic optimism and below-national average unemployment rates, growing interest and migration from Vancouver homebuyers seeking alternatives, escalating interest from Alberta buyers, and increased awareness of Victoria real estate as an investment opportunity for buyers from mainland China.

“We expect to see the intensity experienced in the first few months of 2016 to remain into the foreseeable future,” predicts Tom Stratton, Managing Broker for Sotheby’s International Realty Canada in Victoria and Kelowna. “Victoria has always offered an attractive lifestyle for people at all life-stages whether they’re students, young families or retirees. Luxury real estate within Victoria has now been ‘discovered’ by a much broader audience. Given current market conditions, we expect to see more buyers from both the Greater Vancouver and Alberta regions move into the market to access attractive, and relatively affordable, luxury housing.”

Key Luxury Market Drivers

• Victoria’s economy is projected to post its strongest gains since 2007 with GDP forecast to expand by a solid 2.3% this year according to the Conference Board of Canada, which ranked the market among the top ten fastest growing cities in Canada for 2016. An optimistic local economic outlook and unemployment rate that is below the national average of 7.1% at 6.2% as of April 2016 has fostered consumer confidence in the real estate market.
• Steeply escalating single family home pricing in Vancouver is driving demand for luxury options outside the Lower Mainland, including in Victoria, as buyers priced out of top-tier real estate in Vancouver seek alternatives. While benchmark pricing for detached homes was at $3,199,600 in Vancouver West and $1,345,400 in Vancouver East in April 2016, the benchmark price for a single family home in Victoria was $684,900. Attracted to the relative value and accessibility of Victoria luxury real estate, buyers from Vancouver were the most influential, non-local cohort within the market in the first five months of 2016.
• Interest in the Victoria luxury real estate market increased from Alberta buyers in the first five months of 2016. In particular, Victoria has seen notable interest from retired Calgary buyers looking to put down roots further west.
• Increased awareness of Victoria’s top-tier market from mainland Chinese buyers who have been significant influencers in Vancouver’s luxury real estate market in recent years, has resulted in an increase in activity in Victoria. The primary, non-local driver of high-end Victoria real estate, however, are homebuyers from Vancouver.

Disclaimer *The information contained in this report references market data from MLS boards across Canada. Sotheby’s International Realty Canada cautions that MLS market data can be useful in establishing trends over time, but does not indicate actual prices in widely divergent neighborhoods or account for price differentials within local markets. This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information and analysis presented in this report, no responsibility or liability whatsoever can be accepted by Sotheby’s International Realty Canada or Sotheby’s International Realty Affiliates for any loss or damage resultant from any use of, reliance on, or reference to the contents of this document.