The year 2022 has started with a surprise for many homeowners as the value of their property rose, in some cases as much as 43%! As we look forward to the new year, what can be expected for the Victoria housing market?
Here’s a close look at what we forecast for the 2022 real estate market in Victoria, BC.
As homeowners receive their 2022 assessment notices, there is one thing many homeowners have in common: a drastic increase in the value of their homes. Homeowners can expect between 15 and 30% increases — and in some cases more. Across Vancouver Island, the total real estate assessment grew from $269 billion in 2021 to $343 billion.
According to the BC Real Estate Association, this trend is expected to continue into 2022. Although some first-time buyers were looking for a bit of a dip in the housing market, that doesn’t look to be coming any time soon.
Throughout 2020 and 2021, we witnessed a competitive market with tight supply leading to tiny windows for buyers to make an offer. Most major banks project a reduction in home sales between 8 and 15%. Projections for 2022 outline a pullback in sales, but there’ll still be low supply driving the value and sales and creating a competitive market.
The Victoria housing market is experiencing drastic growth. Numerous new construction projects can be seen in almost every neighbourhood of the Greater Victoria region. Currently, there are 52 new developments in various stages of construction. Of these, 65% are condo developments. High-density housing has been a significant theme in the past few years, and this trend will only continue.
Interest rates have remained low from the Big 6 banks in Canada throughout the pandemic. These have to rise eventually; the question is, “by how much?” Projections for the coming year are looking at a 1% increase from most of the Big 6 banks. Estimates are also calling for additional rate hikes that will bring the overnight rate to 1.75% by the end of 2023. Increased rates will impact the sales and amount of properties for sale, but there will not be a drastic change within 2022.
These factors make it difficult for first-time buyers to enter the market. However, it is still a good time to invest. If you purchase now, you can still take advantage of low-interest rates. Overall, real estate is a growing and safe alternative investment vehicle.
As many large-scale pension funds, such as the Teachers’ Pension Plan, look to buy real estate to use as rental income for years to come, many savvy investors are also looking for ways to take advantage of the real estate market. The boom in new construction has also meant that investors who have capital in mortgage pooled funds have seen significant growth in their portfolios. If you’re interested in growing your portfolio and capitalizing in real estate as an investment vehicle, get in touch with Jordan on our team today.