Victoria's Waterfront

What is driving this market for waterfront properties in Victoria? Be it the coveted "trophy property" or an Inner Harbour condominium, the Victoria waterfront real estate market is driven by the same factors that have created the fairytale rise in waterfront values globally. The primary influences are the record low interest rates, a volatile stock market, the ultimate belief that waterfront is the best investment in real estate, and a "lifestyle dream."

Trophy properties are enjoying a resurgence as in today's world it is not uncommon for a family to own two or three special properties in various cities or countries. Whether it's a principal residence or a recreational property, everyone desires their nugget of waterfront. It is a secure investment and contributes hugely to the big picture of the balance and restoration of one's soul. Many buyers now create a real estate portfolio with waterfront as the major piece.

In the past, Victoria's waterfront was significantly undervalued relative to the rest of North America. However the internet as a marketing tool brought Victoria to the world and the world to Victoria. As a result, Victoria has experienced a significant increase in buyers.

Victoria enjoys the category of being a Number One Destination City (Conde Nast March 2004).This, combined with the city's ongoing love affair with tourism, has had an inevitable impact on the market. Visitors fall under the spell of Victoria's idyllic charm, and contemplate change in their desire to find a safe and secure community within this frenzied world.

In the years 2000 to 2003 a large number of our buyers were American due to the strength of the American dollar. Today we are seeing an increase in Canadian buyers, specifically from Calgary, Edmonton and Toronto, although our B.C. buyer still represents the majority of the sales. In the next few years we are likely to see the "Whistler Effect" as we anticipate increased interest drawn by the approach of the Olympics in 2010.

The profiles of buyers have shown considerable change over the last three years. Today's clients include early retiring Baby Boomers with extra disposable income, investors (both local and international looking for holding properties), and families exercising the geographic freedom offered by the advances in telecommunications as their home becomes an "office with a view."

We enjoyed many amazing bench mark sales last year, the most notable being the sale of Eagles Nest, a premiere Uplands estate selling for $7.5 million to a B.C. resident. Other sales of merit would include the glass house called "The Point" in Ten Mile Point for $4.6 million, the Deep Cove Chalet property of 6 acres closing at $4.6 million, and an East Sooke estate, 60 acres in total with 20 acres on the water at $3.25 million.

I am frequently asked for my opinion on the future of the waterfront market. At this time I do feel it is still increasing in value due to the aforementioned factors relating to who is coming and why they are coming. Certainly as long as we are enjoying the low interest rates this will contribute to a vibrant market.

Our inventories of waterfront condominiums and waterfront properties are exceptionally low. At the time of writing this article there are only 8 waterfront condominiums available in the Inner Harbour, and 37 residential waterfront properties available in all municipalities from Sooke to Sidney (MLS listings). Large demand and low supply contribute to our rising market. Testament to the increase in the waterfront's relative value is the revival of previously neglected areas. The Rail yards development at the foot of the Bay Street Bridge is an example of such a project as was Shoal Point five years ago. This is a clear indication of Victoria's future direction.

Victoria is experiencing a new-found demand as a place to live, by Canadians and many others beyond her borders. The indisputable fact is that we simply cannot make anymore waterfront. It is a finite commodity. It is where nature herself has drawn a line in the sand. Invest and Enjoy. Leslee Farrell is a guest editor for Dream House Magazine and a waterfront real estate specialist for Macdonald Realty Victoria Inc.

Leslee Farrell is a guest editor for Dream House Magazine and a waterfront real estate specialist for Macdonald Realty Victoria Inc.