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VIREB president says pent-up demand fueling rise in island house prices

Vancouver Island’s real estate market is slowly shaking off the effects of the pandemic.

A total of 892 homes sold, island-wide in July, down four per cent from the 931 sales posted in July 2019. 

Broken down by category, 574 single-family detached properties sold on the MLS system last month compared to 573 in June, and 554 in July 2019. 

Vancouver Island Real Estate Board president, Kevin Reid, attributes the recovery to pent-up demand, affordability, and the island’s relatively low COVID-19 case counts.

“My personal opinion is, the COVID pandemic has highlighted how wonderful the Vancouver Island lifestyle is, and I think that is a big attraction to the people coming, in fact, my clients have told me that,” Reid said. “They can afford a home with a yard, there’s lots of places to recreate that they can get away from populations, and the fact that the Vancouver Island area handled the pandemic quite well, compared to other parts of Canada.” 

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Condo sales continue to lag, however, dipping 14 per cent year over year while row/townhouse sales dropped 16 per cent. 

The benchmark price of a single-family home board-wide was $545,700 in July, a six per cent jump from the previous year and two per cent higher than in June. (Benchmark pricing tracks the value of a typical home in the reported area.) 

In the apartment category, the year-over-year benchmark price rose by four per cent, hitting $312,800 and up marginally from June. 

The benchmark price of a townhouse in July rose four per cent year over year, climbing to $425,800 but down slightly from June.

In Campbell River, the benchmark price of a single-family home last month was $456,000, an increase of five per cent over last year. 

In the Comox Valley, the benchmark price reached $557,500, up by eight per cent from one year ago. 

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Duncan reported a benchmark price of $500,200, up six per cent from a year ago. 

Nanaimo’s benchmark price was seven per cent higher at $593,600 in July, while the Parksville-Qualicum area saw its benchmark price increase by two per cent to $604,900. 

The cost of a benchmark single-family home in Port Alberni reached $342,700 in July, a seven per cent increase from one year ago. 

“Our housing market has seemingly rebounded from the COVID-19 dip we witnessed in April,” says VIREB president Kevin Reid. 

“We believe that the recovery is being fueled by low interest rates and supply shortages, and we’re cautiously optimistic that the turnaround will last.” 

Reid said the even in these uncertain times, it’s heavily tilted to a sellers market because demand is far outweighing supply.

“We’ve seen in the last 30 days a significant uptick in price,” he said. 

“In fact, we’re six per cent up on the single-family dwelling unit of the market in pricing. There is a shortage of homes for buyers in the area, there’s this negative supply, which is adding fuel to the increased prices and right now I would call it a sellers’ market. If you’re considering selling on the east coast of Vancouver Island, right now is the strongest time I’ve ever seen.”

Reid does wonder what will happen when the Canada Emergency Response Benefit (CERB) ends. 

However, since most layoffs thus far have affected younger people who would not have been entering the housing market, there may be no significant downturn when CERB payments drop off. 

“An interesting development we’re noting, is that there seems to be more demand for single-family homes and less interest in condominiums and townhouses at the moment,” adds Reid. 

“It makes us wonder whether quarantine and lockdown have instilled a desire for more space among buyers.” 

On the provincial front, the British Columbia Real Estate Association reports that sales in B.C. are surging to pre-COVID-19 levels in most markets. 

Although listings activity has normalized along with sales, active listings are still down close to 20 per cent year over year. As a result, many markets are seeing upward pressure on prices.

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