Victoria Overtakes Vancouver in B.C. Real Estate
For the past several years, Vancouver has been the most highly performing city in Canada when it came to not only real estate sales volume, but also actual home prices. However, this trend has been changing ever since the adoption of various measures by the British Columbian provincial government as well as the city council in order to prevent market trends from spiralling out of control. This has taken the form of new regulations including a foreign buyer tax of fifteen percent, as well as financial penalties against property owners who fail to rent out vacant owned properties.
As a result of these measures, property sales in Vancouver have plummeted, with other cities in the region picking up the slack. A lot of real estate activity has shifted to Victoria, where the frenzy has propelled the town into second place in the world when it comes to the global luxury housing market. The first place city on that list is, remarkably, Toronto, according to a report penned by Christie’s and Chestnut Park Real Estate. Other cities that were mentioned on that top ten list included places such as San Francisco, San Diego, Paris, and Sydney, and even small American cities such as Charleston in South Carolina.
Part of the reason that accounts for such heavily increased market activity in Victoria is due to the massive impact that the foreign buyers tax has had on sales activity within Vancouver. Indeed, according to home price index data provided by the Canadian Real Estate Association, home prices in Vancouver almost immediately began dropping in the city after the adoption of the 15 percent foreign buyers tax last August.
Despite the efforts of both provincial and
federal actors, it is clear that the housing frenzy merely moves elsewhere when
it encounters a roadblock such as vacancy restrictions, new taxation
regulations, and other measures aimed to cool the market. In this scenario,
sales activity has merely turned from having Vancouver as the focal point for
luxury housing, to Victoria. In this regard, locals have expressed concern
whether the same pattern of overall home price inflation will begin to repeat
itself in the city as it occurred in Vancouver. According to some economic experts,
price inflation and its ability to grow is based in political acceptability; in
other words, it can only occur if local residents decide that a rising of home
prices is a good thing for themselves and for their families.
Published Date: Jun 05 2017