Victoria expected to continue as seller’s market in 2021, prices to increase approximately 5%
Victoria real estate is expected to continue as a seller’s market in 2021 due to low inventory and high demand. While the economic impact of COVID-19 may push buyers out of the market, seller’s market-like conditions are expected to continue in 2021. The average sales price in Victoria increased by 11% to $778,854 in 2020 (Jan. 1 – Oct. 31), compared to $702,310 in 2019 (Jan. 1 – Dec. 31). The RE/MAX Outlook for Victoria real estate in 2021 is an increase of 5% in average price to approximately $817,796.70.
Who’s Driving Demand for Victoria Real Estate?
Move-up buyers are currently driving demand in the Victoria real estate market, which is expected to continue in 2021. Single-detached homes are the most popular property type with move-up buyers. Homebuyers are expected to continue looking for homes with more space for home gyms and home offices in 2021.
First-time homebuyers in Victoria are typically young couples looking for condominiums. These properties range in price from $400,000 to $500,000. First-time homebuyers that are looking to purchase a single-family home can expect prices in the $700,000 to $800,000 range. If first-time buyers are prepared to purchase a condominium, there may be good opportunities there as that segment of the market is not performing as well as the single-family market.
Move-up buyers in the Victoria housing market are typically families. There has been some hesitation from move-up buyers in Victoria due to the current climate, but after moving through the winter months it is expected that more people will begin to get outside and look at homes more.
The condominium market in Victoria is most popular with single homebuyers. The average price for a condo in Victoria is $479,724.18. The region saw lower demand in the condominium category, as more buyers were seeking out single-detached homes.
Victoria’s luxury market is currently driven by families, with an average starting price for a luxury home in Victoria being $1,500,000. The month of inventory in the $1.5 million category climbed in the early spring with COVID-19 creating so much uncertainty about the short and medium-term impact, but then rebounded in the summer. In the first 90 days of the pandemic, the luxury market slowed down abruptly, but rebounded quickly in the summer and has held onto the pace.
Victoria’s Hottest Neighbourhoods
Victoria’s top-selling neighbourhoods in 2020 were Langford, Victoria and Saanich. In the case of Victoria and Saanich, it is the desirability of being located in the core at a more accessible price point than Oak Bay. Langford is a much more affordable area for families to purchase a home if they can live in the Westshore markets, which are proving to be an excellent choice for lifestyle with lots of access to parks and amenities. These neighbourhoods are expected to continue to be popular in 2021.
Victoria New-Home Construction
Victoria’s new-home construction, particularly single-family new construction has been in high demand. The current number of homes being constructed is too low to satisfy the demand. The sale price of new-construction homes is similar to that of resale properties, as what buyers are getting in a new build typically means they have to sacrifice in property size. Supply is needed in all new-construction categories, with townhomes being the missing middle for many buyers.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”