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Victoria Housing Outlook Optimistic

CMHC’s Housing Outlook Conference for Victoria reports our economy is growing stronger and employment should increase in 2015 and 2016.

This is partly due to higher consumer spending, a lower Canadian dollar boosting tourism, and regional infrastructure projects.

Driving housing growth will be immigration and millennials.

Housing starts will be in line with household formation, rising from an average 1,320 in each of the past 5 years to an average 1,940 in the next 5 years.

Presently, Victoria housing sales are outpacing new listings, exceeding the 10 year average for the first time since 2010.

The market is balanced but pushing into sellers’ territory for single detached and townhomes. We will be closely monitoring this trend.

Another indicator is Canada’s annual inflation rate which jumped to 2.4% in October, matching its highest pace since early 2012.

That said, mortgage rates are expected to increase gradually heading into 2015/16.

In 2014, housing starts, particularly condos, will decline compared with 2013, however a stronger economy in 2015 should post a 19.7% increase.

Single detached homes, an important product for families, will show a slight increase this year and in 2015 – a sign of improving employment.

Victoria’s housing outlook is optimistic, with a note of caution.

Higher interest rates in 2016 may reduce affordability and therefore housing starts and employment.

In Victoria’s recovering economy, all levels of government must exercise restraint when considering additional fees and regulations.

This will help families meet the challenges of affordability and rising interest rates.

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This column is also available Wednesdays in the Times Colonist.  

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