Low unemployment and robust population growth are stimulating home price growth in Victoria, British Columbia.
Data from Statistics Canada indicated that the Victoria Census Metropolitan Area (CMA) had a 1% increase in home prices in February compared to January. This was the third strongest increase nationwide for last month.
As of March 2020, Victoria’s unemployment rate of 3.4% was the lowest throughout Canada. To compare, BC’s rate was at around 5%. The CMA also continues to magnetize domestic and international immigrants alike.
However, the trend accompanied a risk of higher vulnerability compared to other housing markets, the Canada Mortgage and Housing Corporation (CMHC) warned late last month.
“The evidence of overvaluation remains low as housing prices remain close to the levels supported by housing market fundamentals,” CMHC chief economist Bob Dugan said at the time, as quoted by the Financial Post.
Figures from the Canadian Real Estate Association showed that in January, Victoria’s home price index was 5.5% above the record low measured in May 2019.
The 16th annual Demographia International Housing Affordability Survey also found that Greater Victoria is among the 20 most unaffordable residential markets worldwide.
Fortunately, despite the signs of “high overall vulnerability,” the possibility of an all-out downturn for Victoria remains modest.
“Moderate evidence remains for overvaluation; however, declining inflation-adjusted home prices combined with growing personal disposable income and population have further narrowed the imbalances between observed and fundamental prices in the third quarter of 2019,” Dugan assured.