Victoria, the mild-weathered capital of British Columbia, is famous for its high quality of life and ― these days ― its eye-poppingly unaffordable housing market, with house prices just short of Vancouver’s astronomical levels.
And now this market could see upward pressure from a new source: The Duke and Duchess of Sussex.
The region has been thrust into the spotlight in recent weeks after Prince Harry and Meghan Markle spent their Christmas holidays in a house in North Saanich, just north of Victoria ― and then followed that up by announcing they plan to move to Canada part time.
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That has many people speculating that Vancouver Island could become their home, which could transform this relatively quiet corner of Canada ― already popular with retirees from across the country and the U.S. ― into a new destination for jet-setters.
The interest is beginning to show already. Google searches for “Victoria” and “Saanich” spiked in both the U.S. and Britain in recent days. Real estate portal Zoocasa says searches for Saanich, B.C. properties jumped 285 per cent in the week of Jan. 6-12, compared to the previous week, while searches for Victoria properties jumped 12 per cent.
Sandi-Jo Ayers, president of the Victoria Real Estate Board (VREB), says the attention could translate into increased tourism.
“When people come as tourists, they often fall in love with the city and the area, and they often make it a place they want to retire, to move to,” she told HuffPost Canada.
She added that it’s too early to speculate on how much impact Harry and Meghan could have on house prices ― especially since it’s still unknown whether they will settle on the island, or in another part of Canada.
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But whether or not that boost is good news depends on what side of the homebuyer fence you’re sitting on.
According to National Bank of Canada’s housing affordability monitor, Victoria is the second-least affordable housing market in Canada. It takes 64.5 per cent of an average-earning household’s income to afford the monthly cost of a median house. Only Vancouver is less affordable, at 83.9 per cent.
Home prices have flatlined in Victoria at high levels. The average price of a detached home was $830,600 in January, according to VREB, down 0.6 per cent from a year earlier.
“Housing affordability continues to challenge buyers in this region when it comes to home ownership and rentals due to lack of supply,” real estate agency Re/Max said in a recent forecast. “Demand for condos continues to rise as many first-time home buyers can afford this property type.”
It sees house prices rising 3.7 per cent in Victoria this year.
“The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market,” Re/Max of Western Canada vice president Elton Ash said.
Would have to pay foreign buyer tax
If they do settle on Vancouver Island, as non-citizens, Harry and Meghan will be subject to the province’s foreign buyers tax on residential real estate, which was recently raised to 20 per cent of the sales price.
But on the upside, they will have plenty of choice: Thanks in part to that tax, sales of high-end homes on Vancouver Island have slowed considerably, and inventory is piling up.
While most of the market is in balanced territory, prices have come down on high-end homes, in some cases very steeply. An award-winning property south of Victoria is currently on sale at a 55-per-cent discount to its asking price three years ago.
Overall, Ayers sees the attention from the royals’ visit as a benefit to the region.
“Anytime we can get attention that elevates our city on the world stage, it’s a positive,” she said.
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