Victoria Real Estate Market Trends with Tony Joe

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How’s the Victoria Real Estate Market? This week, Tony Joe, top-producing real estate agent, owner of REMAX Island Properties, and host of The Whole Home Show with Tony Joe on CFAX 1070, sits down with Matt & Adam to discuss all things real estate on Vancouver Island.

How’s the market? Where are the best areas to invest? And how will the Vancouver Island real estate market perform for the remainder of 2023? This is your crash course on Vancouver Island – get your notebook!

Lifelong Victorian and 30+ year realtor Tony Joe sits down to share the latest Victoria real estate market trends with us. Learn how Victoria has changed over the years, why development is slowed and what the best investment is on Vancouver Island! 

Who is Tony Joe?

I’m a born and raised Victorian who never left, which is a rarity. It seems like everyone in Victoria comes from another part of the country. I’m actually a third generation Victorian. I got into real estate in 1991 and have seen many changes over the years. Every person and every transaction is different.

I was elected to the Victoria Real Estate Boardas part of the board of directors, president and now I’m a spokesperson. I’m also active with the BCREA and with the Federal Affairs Committee for CREA. Lastly, I’m an instructor with the BCREA and the Real Estate Council of BC (now BCFSA) , which I’ve been doing for 11 years now.

I’ve had my team since 2003 which makes this job really fun. It’s an amazing industry and career for those who choose it. It’s so much more than just selling houses.

How has Victoria changed over your years in real estate? 

Well, let’s talk about bike lanes, as an example! I remember first coming to Vancouver and wondering what those green lanes on the road were. But now, everyone in Victoria is complaining about all of the bike lanes we have and how they take up too much of the road.

When I started in real estate in 1991, the population in Victoria was 250,000 and now it’s 420,000. You can’t have that growth without having challenges with infrastructure. Areas like the Westshore used to be the outpost – an area where people had to move out to and nothing was happening. But now, that’s where everything is happening! 

People are bemoaning the changes happening in Victoria but any town that is growing has to change. It can’t be what it was 30 years ago.

The classic saying about Victoria for a long time was “newlywed and nearly dead.” And that was true for a time with the large university student and retiree population. But about 20 years ago, Victoria priced itself out of the retirement world. Snowbirds coming from the prairies couldn’t afford Victoria anymore. So we’re seeing more growth up north and in the Comox Valley.

Once covid happened, we saw lots of young families showing up in Victoria. It made the city a lot younger. And a lot of the people who moved to Victoria during covid actually were born in Victoria. Covid gave them a chance to come back and work remotely. 

If you can work from anywhere in the country, I don’t think you’re choosing Winnipeg. You’re choosing Vancouver Island.

Victoria has experienced a lot of interprovincial migration. Which province are most people coming from? 

Ontario is still the big one. We’ve seen less people from Calgary, which has to do with the pricing. Calgary is generally half the price of Victoria. We’re also seeing a lot of Lower Mainlanders come to Vancouver Island and the other islands around Vancouver, like the Gulf Islands.
Victoriais a younger town now. We’re seeing that with the growth of our schools. We had a school open in 2018 and the day it opened, it needed to be expanded. 

What are prices like in Victoria? 

The Lower Mainland, including the Fraser Valley, and the GTA (Greater Toronto Area) are the top two most expensive real estate markets in Canada. But Victoria is in third position. The average price in Victoria for a single-family, detached house is $1.3 million.

It’s expensive to live in Victoria, unless you’re coming from Vancouver or Toronto and cashing out on your real estate. Otherwise, it’s hard for young families to start up here.

How has Victoria weathered the last 1-2 years with the rise in interest rates? 

Victoria really mirrored what happened in Vancouver. With the exception of Alberta, we saw similar trends across the country. We hit the soft spot where sellers were desperate but the question is always: where is the bottom? It seems like the bottom in Victoria was December 2022/January 2023.

And now we’re coming back up! I’m seeing multiple offers again and sales at 10% over list. That amazes me, because interest rates are much higher than what they were in early 2022.

A huge cause of that is inventory. People want to move but we don’t have the inventory. They can’t move because they don’t have a place to go to. So they’re stuck. The demand has always been there, but it was just dormant for a bit during the interest rate spikes.

It seems like it’s hard to get projects started in Victoria, especially compared to development-friendly places like Langford. Why is development slower in Victoria?

Victoria is unique because it’s a small community of 420,000 people but we have 13 distinct municipalities which means 13 mayors, 13 councils, 13 sets of by-laws, etc.

The previous mayor of Langford who was very pro-development was amazingly voted out. He developed a process where you could get approvals in 24 hours and 7-day permits. In Victoria or Saanich, that same process can take six months at a minimum.

One of the reasons why development is easier in Langford is because Langford only had available land, whereas any development in Victoria or Saanich would involve tearing down old projects. Langford didn’t have that issue and so could get through the permit process faster.

What areas are you excited about in Victoria? 

For an investor, the cap rates in Victoria don’t look all that attractive. But what you’re doing is buying for capital appreciation, just like in Vancouver.

Langford is the new development area with a lot going on. If you want something new with little to no maintenance, you have lots of options in Langford and on the Westshore. The condos in Victoria are 30-40 years old and will have some capital improvements coming up. The ones on the Westshore are 25 years old at the oldest.

Downtown there are some buildings that are short term vacation rental friendly. Those are few and far between but are attractive to buyers. There’s another area called Fairfield by Beacon Hill Park which is like our Kitsilano. A lot of Vancouverites like this area for investment.

Harris-Green is a fantastic area! For 35 years, my family’s grocery store was in that area, so I grew up there when it was just car lots. But it’s becoming an amazing community with the rental properties that we need.

On the geographical constraints of Victoria:

The problem with Victoria is we have water on three sides and the Malahat on the other.

We are becoming a taller city; I won’t say high-rises because I think our tallest building is only 24-storeys. Add to that the fact that our traffic infrastructure isn’t great. We have the growth areas on the Westshore but it is congested. Friday afternoons are nutty!

Does Victoria have the amenities of a bigger city?

It’s interesting seeing people move from bigger cities to Victoria. To me as a local, I often forget that I live on an island. It’s a big island!

But the reality is we do lack things. We have to go to Vancouver if we want good shopping or want to see a big show or a game. It’s just as easy for us to get to Seattle, so that’s an option too. There are amenities around, but not in town.

Besides Victoria, what areas on Vancouver Island are you excited about?

The news in Nanaimois all about this commuter ferry to Vancouver. They’ve tried this so many times but I think if they can finally get it going, it’s going to be great.

What usually happens is people are drawn to Victoria from other parts of the country. But then they realize it’s too expensive or just not the right fit. So they start moving up the Island to the Cowichan Valley, Nanaimo, etc. People who sell their properties in Victoria to someone from the Lower Mainland often move up the Island too.

Parksville-Qualicum is an area that surprised me. Everyone thinks that area is nearly dead but it is getting more youthful. Parksville is the second most expensive place on the Island!

Where is the best investment on Vancouver Island?

It’s always going to be solid to invest in downtown. It will be a smaller property but the rental market is strong in Downtown Victoria.

Condos have been the way for people to get into the real estate market. Many first time buyers dream of having a single family home but have to downgrade to a townhouse and then to a condo to get their foot in the door. Unless you have a lot of help from mom and dad, the single family first time home isn’t a realistic dream in Victoria anymore.

Tell us about The Whole Home Show on CFAX 1070.

The Whole Home Show came about because of my role as a spokesperson for the real estate board. I made a lot of media contacts and was approached to put together a program. At first I wasn’t interested, as it sounded like a lot of work and I was worried I might run out of ideas. But it’s been six years for me and it has been a great journey!

Just in my day to day work in real estate, I’m able to find guests for the show by asking people what they could talk about that listeners might be interested in. I’ve been privileged to talk to a lot of politicians, including talking to Ravi Kahlon the day after he got his job as the Housing Minister. We talked about the removal of age and rental restrictions in strata buildings, which was a great conversation.

I feel like I am a student of our industry and our community. Being able to meet people and hear their side of the story always interests me.

On foreign buyers and the changing perspectives on real estate:

My community has always had the impression that foreign buyersare the reason why housing prices have been driven up and that there are so many vacant homes. But that’s a major misunderstanding of the problem.

Early on in my radio show program, I interviewed a few new immigrants to Canada. They were telling me how hard it was to actually leave their home, learn a new language and move to Canada for their family. I often think that politicians who vilify foreign investors need to learn their story. Why did they move here? It wasn’t just to make money with real estate.

Back in the day, you bought a house because that’s where you wanted to live. If it went up 2-5%, that was kind of nice. But now there’s an expectation that your real estate should double every couple of years and that you can use it as an ATM, taking money out whenever you want.

It seems that the villain in the real estate market is always changing, from foreign buyers a few years ago to REITs today. Do you have an idea who the real villain is?

Both Vancouver and Victoria are victims of our own success. There are so many things that draw people to our regions. How can you control the natural beauty?

Victoria is a small town but we’re not a single industry town. We have the government, military, tourism, university, technology, etc. Plus we have good weather! There are so many attributes that draw people to Victoria. Unfortunately, that means it’s expensive to live here.

The 5 Wire: Getting to Know Realtor & Owner of REMAX Island Properties, Tony Joe

What is one book you recommend to our listeners? 

I’m not really a reader; I’m a podcast listener! The last time I picked up a book was probably on my flight to the UK in December. I read Travel as a Political Act by Rick Steves. I’ve actually met Rick because I do some work with public broadcasting in Seattle. He’s a fantastic guy! He always says he loves Canadians because Canadians are much more global, whereas Americans are more US-focused.

In the last few years, what is one new belief, behaviour or habit that has most improved your life?

Our business is full of adversity. Sometimes you win with multiple offers and sometimes you lose. The quicker you can recover from a blow, the better. Staying positive and not dwelling on the bad is important.

What have you been binge watching lately? 

I’m not usually a binge watcher but I’m a huge Star Trek nerd. My wife and I are currently watching Ted Lasso and I’m really enjoying that.

Favourite band or music?

I listen to The Killers a lot. When I’m working, I’m a soundtrack guy. It brings back good memories. I’ll have orchestral things from Star Wars or James Bond playing. 

What is something you’ve purchased recently for under $1500 that has had a positive impact on your life? 

I was in the UK over Christmas and picked up a PacSafe travel backpack with all the anti-theft zippers. It’s fantastic! I actually ditched my briefcase and have made this my new work bag.

• Remax
• The Whole Home Show