It is not foreign buyers but “bully bids” from frustrated locals competing for a record-low inventory that are driving Victoria home prices higher, according to real estate agents and analysts.
“Foreign buyers probably make up less than 5% of the housing market here,” said Royal LePage Victoria broker Bill Ethier.
He added that most out-of-town buyers are from Metro Vancouver or other parts of the B.C. mainland. Last week, Victoria Mayor Lisa Helps said the city will ask the province to slap a 15% tax on housing purchased by non-resident foreign nationals, similar to the tax introduced in Metro Vancouver last August, if the number of foreign buyers reaches 10% of Victoria housing sales. But Ethier and other agents say a shortage of homes for sale has caused aggressive bidding that has driven prices higher as home sales fall.
The number of real estate agents in Greater Victoria is nearly equal to the number of listings, according to the Victoria Real Estate Board.
At the end of March, there were 1,556 active listings and 1,353 licensed agents across Greater Victoria, said board president Ara Balabanian.
Listings on the Multiple Listing Service are about 50% below the 10-year average.
The lack of inventory has helped drag sales down 14% in 2017’s first quarter compared with the same period in 2016, as the average residential price increased 12% to $612,584, according to a recently released Re/Max study.
“We are seeing an increase in bully bids,” said Re/Max Victoria agent Ray Blender, referring to homebuyers presenting offers far above the asking price on some properties. “I have seen buyers bidding $80,000, even $150,000 above asking [price].”
Neither Re/Max’s 2017 spring market trends report nor the Canada Mortgage and Housing Corp.’s most recent Housing Market Assessment on the Victoria market mentions foreign buyers as being a factor in the city’s high housing prices. •
