Victoria real estate prices have the city’s housing market ranked #12 of 16 Canadian cities when it comes to housing affordability, according to the 2020 RE/MAX Housing Affordability Report. While affordability is already one of the region’s biggest draws, cost-conscious home hunters in search of even better prices can find them in the communities of Langford, Sooke and Colwood, which have been named the most affordable neighbourhoods to buy a home in Victoria.
Factors contributing to Victoria real estate prices
Victoria’s real estate prices have fluctuated, experiencing an 3-per-cent decrease from 2018 to 2019, while a 3-per-cent increase is expected this year (source: 2020 Housing Market Outlook Report). The high real estate prices have placed Victoria on the more unaffordable side of the affordability scale according to the new RE/MAX Housing Affordability Report.
In its inaugural Housing Affordability Report, RE/MAX examined 16 of Canada’s most-populous regions and ranked them on an affordability scale, with #1 being the most affordable and #16 being the least affordable. RE/MAX brokers were surveyed about average home sale prices and whether they believe real estate in their region is overvalued, undervalued, or right on the money. Victoria real estate came in at #12 of 16 cities. Canada’s most affordable city to buy a home is Regina (#1) and the least affordable place to buy a home is Vancouver (#16).
RE/MAX’s affordability ranking was determined by assessing the percentage of a buyer’s monthly income needed to carry a mortgage, assuming a down payment of 25 per cent, and based on the forecasted 2020 average sale price per region and the forecasted 2019 average household income.
Victoria real estate is currently regarded as overvalued due to the standard mortgage qualifications of income, down payment, and credit card ratings required with higher average sale prices, in addition to the mortgage stress test.
The current shortage of inventory and a competitive market caused by downsizing retirees looking for the same properties as first-time home buyers. These properties include condominiums and single-detached homes, which are the top choices of first-time home buyers. Victoria has yet to see a strong trend of home co-ownership with friends or family that has emerged in other markets.
At the high end of the affordability spectrum, the region’s least affordable neighbourhoods include Oak Bay, South Victoria and Saanich East.
Despite the commonly held notion that housing in Canada is unaffordable, the report finds that the vast majority of Canada’s largest urban centres (75 per cent) are currently undervalued, according to a survey of RE/MAX brokers in 16 of Canada’s most-populous cities.
In its report, RE/MAX explored the most popular property types sought by first-time homebuyers, the least and most affordable neighbourhoods in each of the 16 housing markets, factors preventing buyers from entering the market, and methods homebuyers are using to enhance the affordability of homes. Current and prospective Canadian homeowners were also surveyed about their sentiments around home ownership, barriers to owning a home, financial factors impacting home ownership, and what could potentially improve housing affordability.