Jordan Richards can’t wait to take possession of her new condominium next month at Bond’s Landing in the RailYards development in Vic West.
The south-facing one-bedroom corner unit has everything she wants.
Richards, 24, loves the neighbourhood, its proximity to downtown, trails, shopping and services, and the harbour. “It’s already got such a cool vibe about it.”
She will be biking to work downtown, rather than driving, and will walk to her nearby gym. “It suits my lifestyle right now,” Richards says.
And it’s something she could afford.
Richards is among a growing number of young buyers starting with condominiums as single-family housing prices rise beyond the budgets of many younger Victorians.
In December, the benchmark price of a single-family house in the Victoria core was $613,000, up 9.4 per cent from a year earlier. The benchmark condominium price is less than half, at $305,000, but still up more than six per cent from last year.
In the region’s tight housing market, Richards said her mortgage payments are lower than what she’s been paying in rent.
Like many others buying a first home, her family helped with the downpayment on the $285,000 unit.
Price and availability are affecting the local market, said Tony Zarsadias of the Condo Group in Victoria. A house he listed in the fall attracted three offers, all with no conditions, he said.
The situation is different with condominiums, where it is more typical to see one offer at a time, with conditions allowing potential buyers to learn more about the property, he said.
Affordability is an issue in B.C., especially in the Vancouver area, prompting Premier Christy Clark to hint that some kind of housing-relief options will be part of February’s budget. She said the government is considering measures that improve housing-market options for first-time home buyers, but also retain the value of homes for current owners.
Two forecasts released Wednesday predict Canada’s housing market will grow in 2016, but not at the rate we saw last year, and that sales number are expected to flatten in the later part of this year.
Bill Ethier, president and managing broker of Royal LePage Coast Capital Realty in Victoria, expects overall housing prices to rise by three to five per cent for all housing types. Single-family houses are the main price driver “because there are so few, especially in the core,” he said.
As well, “strong employment prospects are further fuelling demand. The city’s growing technology and strong tourism sectors have led to an increased number of graduates opting to stay, build careers and ultimately purchase homes in the region.”
These days, first-time buyers are more likely to invest in a condo or two before moving into a single-family house, Ethier said.
He predicts sales will be stronger in the spring than fall, when they will be relatively flat.
This echoes the Royal LePage House Price Survey and Market Survey Forecast which anticipates continued price increases in most markets, but at a slower pace than seen in the past two years.
It predicts that the median price will increase by 4.1 per cent this year compared to 2015.
Royal LePage said the national real estate market is “expected to slow later this year, due to the effects of a dampened economy in Western Canada and eroding affordability in Toronto and Vancouver.”
Fitch Ratings said home prices in Canada are expected to rise 2.5 per cent this year in what it described as a “stable” outlook. It cautioned that “Canada’s national prices are overvalued by more than 20 per cent compared to long-term economic fundamentals, leaving Canadian home prices exposed to more downside risk.”
Low mortgage rates and steady employment are continuing to drive home prices, which rose by close to six per cent last year nationally, Fitch said. However, economic growth has been affected by lower oil prices and household indebtedness.
