Thanks to Victoria’s relatively small size, lower COVID-19 caseload and diverse industry base, the city’s economy will likely recover quite well post-pandemic, according to a new report by BMO Capital Markets.
Economists at BMO have been taking a look at local economic scenes across Canada, and Victoria, they say, is “in the sweet spot.”
Compared to many regions in B.C. and across Canada, Victoria has seen relatively few COVID-19 cases so far. Data isn’t available for the city alone, but the southern region of Vancouver Island has seen 1,400 cases since the pandemic began. The Okanagan, which has a similar population to Greater Victoria, has seen 5,395 cases in the same time.
The city also hasn’t announced any major restrictions beyond those ordered by the province, meaning a lesser impact on local business.
The February unemployment rate for Victoria Census Metropolitan Area was 4.9 per cent, up 1.4 per cent from February 2020, but significantly down from the 11.3 per cent peak in July 2020. Long term, BMO economists said, an aging workforce means Victoria will have to rely on immigration to drive growth.
Victoria has also been protected by a diverse industry base and stable public administration sector. It’s reliance on tourism, though, will continue to hinder growth. In 2019, over 10 per cent of jobs were in the accommodation and food services and information, culture and recreation sectors.
Like much of the country, Victoria’s real estate sales have surged throughout the pandemic. In February, the Victoria Real Estate Board sold 863 properties, 53.3 per cent more than the 563 sold in February 2020. The demand, BMO’s report says, is due to record-low mortgage rates, a quick job recovery in higher-paying industries and a growing preference for larger homes outside the city core.
It’s also meant an incredibly competitive buying market and increasingly high prices. In February, a single family home in the Victoria core fetched an average price of $948,200.
The bottom line, according to the BMO report, is that Victoria should bounce back as the pandemic passes and remain “an attractive location on the Canadian landscape.”
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-With files from Wolf Depner