By V. Adams

Victoria’s soaring real estate market saw a buying frenzy in 2015 and it’s far from over one year later according to Victoria.Citified.ca1. One of the top five-busiest months in the city’s real estate history, reveals that pre-sale prices for new construction and resale homes are hitting new highs as inventory falls. In other words—in the tight housing market, demand has now outstripped supply.

The median price for a single-family home in Victoria is in the $650,000 range. As for condos, the benchmark price was $362,800, up 20 percent over October 2015. With a 22 percent increase in the number of condos sold at this time last year, it takes (on average) only 29 days to sell a condo unit now—compared to 65 days in October 2015; this, according to The Condo Group2.

Victoria is attracting affluent newcomers: Vancouverites cashing out on homes and buying condos here; Prairie (particularly Alberta retirees) seeking a comfortable climate and cozy condos; well-paid civil servants and high-tech millennials who like to bike or walk to work. And, a small, but growing, cohort of overseas investors are seeking a safe place to park their funds while their children pursue an education here.

But what does the housing market look like in James Bay?

According to the Mark Imhoff Group, there have been 214 residential units sold in James Bay since the beginning of the year— 56.6 percent condo units, 24.2 percent single-family units, and 19.2 percent townhouses. The average selling price for a home in this neighbourhood is now $612,583. Not a surprise! Many of us have witnessed the residential demolition trend in the City (57 in 2015). More than one-quarter of them involved older properties in James Bay.

This snapshot does not represent the entire picture. Eleven homes (representing 20 percent of single family dwellings) sold for more than a million dollars. And ten condo units, primarily in the seaside Shoal Point area, changed hands for more than a million. (These units represent 8 percent of the strata title properties); two sold for more than two million and one for a whopping $5.5 million! Yes, the “1 percent” has secured a “pied-a-terre” in this pristine piece of paradise!

Meanwhile, in the majority of James Bay households, tenants face an almost four percent increase in rent, or a substantial 40-50 percent hike in shelter costs for “refurbished” rental suites. What does Craigslist show? A rental housing market with a vacancy rate near zero and only 44 rental units available—at an average rent of $1,726 per month.

The real estate market is competitive place for homeowners, renters, and now tourists. However, homeowners have an advantage renters do not—to offer a spare room or an entire unit to a tourist who offers higher income opportunities than a full-time local resident. The popular online accommodation website Airbnb now offers 50 residential accommodations (78 percent are for entire suites). For some property owners, then, the “sharing economy” residential rental is now a thriving business.

Currently, 94 residential units are available in James Bay; 53 percent are dedicated to short-term vacation rentals. The remainder is available to local residents for long-term accommodation. Surely when more rental units are available to tourists than to residents, one can only conclude that a roof over one’s head is a luxury, not a basic necessity.

Kyle Kerr, Director of the Victoria Real Estate Board, notices that “the short-term vacation rental market has definitely increased in the last two to three years in Victoria, but there are only about 15-20 buildings in Greater Victoria that have the legal transient zoning which allows these types of rentals.” Kerr adds that “in the long term, condos found in buildings that legally allow STVRs generally sell for more money than normal condos.”

Will James Bay become another Venice, Italy? A popular tourist destination with short-term, vacation rental accommodation—a place devoid of long-term residents who are the very foundation of a healthy, sustainable community? If Venice is turning into a museum, battling rising tide levels, and accommodating millions of tourists annually, can Victoria, a quaint colonial outpost, be far behind?




3 - Venice’s vanishing population