Victoria home prices have surged, and the driving force behind the hot market has a familiar ring – offshore buyers.
But this wave of purchasers need only catch a 95-minute ferry ride to Vancouver Island instead of boarding a long overseas flight.
"Our offshore market is Vancouver. It has been for the last year," Victoria Real Estate Board president Ara Balabanian said in an interview. "We've experienced the overflow from Vancouver. People are selling at very high prices over there and downscaling over here."
The new arrivals making the trip across the Strait of Georgia to Vancouver Island have helped push up housing prices to record highs in British Columbia's capital region, which had a population last year of nearly 384,000 residents.
Strong demand and a shrinking number of listings have resulted in bidding wars and sales that frequently go well above the asking price.
"In this market, sellers aren't too anxious to entertain a conditional offer," Mr. Balabanian said. "We have a stable economic situation here, which attracts a lot of people."
The local demographic has shifted to include a wide range of ages, said local Century 21 real estate agent Tara Hearn.
"If you're talking about the newlyweds and nearly dead, that was probably true in the 1980s and 1990s, but the population has changed," said Ms. Hearn, who has noticed a sharp increase in buyers of various ages from the Vancouver region.
The B.C. government implemented a 15-per-cent tax on foreign home buyers in the Vancouver area last August.
Ms. Hearn said there has been a modest uptick in foreign buyers, notably from China, though she notes the offshore purchasers in Victoria aren't nearly as deep-pocketed as the ones who have snapped up luxury mansions in Vancouver in recent years.
"We get interest from across Canada, but what we've seen more than anything? Vancouver buyers. They're looking at a way better retirement here than in Vancouver. After baby boomers buy in Victoria, they still have cash in their pockets," she said. "We also have a lot of young families coming over from Vancouver."
At a shopping mall, realtor Catherine Hallock staffed a Sutton Group kiosk that showed 21 of 33 recent listings sold. "Our climate is the California of Canada," Ms. Hallock said, explaining what attracted many of her clients to Victoria.
A shopper passing by the kiosk said he and his wife are considering selling their Victoria house into the sizzling market to downsize while staying in the neighbourhood: "It's heaven on earth here."
The small-town feel is welcome change for many new arrivals, though Royal LePage agent Nico Craveiro provides a reality check on the boosterism.
"Victoria is not for everyone because some people think it's too small," he said. "Victoria is not a metropolis by any means. It's not like we have a crazy big population like Vancouver or Toronto."
Still, there are plenty of tales of bidding wars across B.C.'s capital region. A detached house near the University of Victoria that listed for $800,000 sold in late January for $921,000 after only nine days on the market. The home, built in 1974, attracted six bidders, said Mr. Craveiro, who co-listed the property with his brother.
Mr. Craveiro believes the B.C. government's tax on foreign home buyers in the Vancouver region has shifted attention to some other markets in North America, but not so much Victoria. "Because of that foreign tax and because most foreign buyers want to stay in bigger cities, Seattle is seeing an influx and also Toronto," he said.
The benchmark price for detached houses sold in Greater Vancouver topped $1.47-million last month, or a 12.9-per-cent gain since February, 2016. The benchmark price is the industry's representation of typical properties that are sold.
By contrast, the benchmark price in February for detached houses sold in an area dubbed "Victoria core" reached $775,000, up 21.3 per cent from the same month in 2016. The core encompasses the City of Victoria and suburbs such as Oak Bay, Esquimalt and View Royal, as well as parts of Saanich.
At a Victoria open house in February, shoes littered the steps up to a bungalow built in 1954. The detached house, listed for $699,900, sold for $792,000 after only five days on the market.
In the broader area called Greater Victoria, the benchmark price for detached properties last month hit $642,300, up 19.6 per cent from a year earlier.
Local agents noticed that the housing market began perking up in February, 2016, when the ratio of sales to active listings surged from the previous month. The rally continued through the spring, and displayed staying power. In the Victoria region, real estate agents consider it to be a buyer's market below 10 per cent for a sustained period and a seller's market above 25 per cent. Last month, it was 64 per cent – 633 sales divided by 988 active listings.
Between June 10 and Dec. 31, foreign purchasers accounted for 4.3 per cent of residential transactions in the Capital Regional District, which includes Victoria and suburbs such as Oak Bay and Saanich.
By comparison, foreign buyers accounted for 7.5 per cent of residential deals over the same period in the City of Vancouver and more than 11 per cent in the suburbs of Richmond and Burnaby, according to data compiled by the B.C. government.