The new year is underway, and some people are already looking for a crystal ball to shed some light on 2020 housing market trends. Instead of looking to fortune-tellers, keep reading. We’ve shared our insights below into what you can expect in both the Canadian housing market and the Victoria real estate market specifically.
Expect bidding wars this year as the limited supply of available homes is creating high-demand for those looking to get into the market. In the Victoria real estate market, there’s been a 23% increase in home sales. As we see more generations looking to buy into the market, we also see fewer boomers and retirees downsizing and more current homeowners renovating instead of upsizing. This all creates a perfect storm of a limited supply of available homes and a high supply of interested buyers.
The foreign homebuyers tax lead to some decrease in sales in Vancouver, but it’s not showing much of an effect on the Victoria market yet. In other areas of the country, immigrant buyers are only one of the factors creating a seller’s market.
The average home price is projected to rise by 3.7% in 2020, but we’re seeing slower growth in some sectors, like single-family homes. This increase in price could be an issue for those already struggling to pass the mortgage stress test. However, for many, the stress test isn’t proving to be too much of a problem towards homeownership.
The lack of access to single-family homes has been paired with a need and trend towards larger condos and multi-use developments. Many young families are balancing their professional careers with raising children, and this is forcing them to consider a way of staying close to work. They’re able to cut some homeownership costs while still having the services and amenities they need nearby for their children. Multi-use condo developments mean having large enough spaces for young families with daycares and community centres close by.
The Victoria real estate market is in dire need of more rentals. With a vacancy rate of 1.6 percent projected for late 2020, Victoria has seen some improvement, up from 1.5% in 2019. This is in large part due to the construction of multiple buildings marked as rental homes. The vacancy rate appears to be falling across Canada, showcasing an immediate need for more rental-specific development in the Canadian housing market.
In Victoria and other tech cities, demand for office space is on the rise. Online businesses such as Amazon are also creating a need for more storage and warehouse space for the delivery of online purchases. These dedicated staging spaces for online-based delivery companies require cold storage in some cases, creating a demand for purpose-built commercial construction.
We’re not seeing any signs of the Victoria housing market slowing down in 2020. There are a few shifts in requirements within the housing market to be aware of for investors and potential property owners. Still, overall, we can expect to see growth this year.
If you’re interested in alternative investment strategies that look towards the real estate market, consider Mortgage Pool Investments with a reliable Mortgage Investment Corporation (MIC). At Cooper Pacific, we’re here to help you find alternative methods of investing to make your money work for you. Get in touch with Jordan on our team today.