The real estate market is still sizzling and house prices continue to climb across Vancouver Island.
Last year, sales jumped nearly 16 percent from 2019, island-wide, and the average price of a single family rose to $587,085.
That’s nine percent higher than the previous year.
The COVID-19 pandemic hasn’t cooled the market anywhere on the island.
Vancouver Island Real Estate board president Erica Kavanaugh says there aren’t enough homes on the market to feed the needs of buyers.
“It’s definitely been an issue all throughout last year and I don’t have a direct cause,” she said. “Low mortgage prices, that makes a big difference but on the off side of that, qualification went up to a higher level. End of the day, we have more buyers than we have inventory.”
VIREB director and past president, Kevin Reid, echoed Kavanaugh’s sentiments.
“There’s a housing shortage,” Reid said. “There are a lot of people coming to Vancouver Island needing homes and there are just not enough homes for them.”
Reid added that demand outweighing supply is fueling price increases, especially on the mid-to-north end of the island.
“In the Comox Valley to Campbell River area, we had between eight to 10 percent increase of the average sale price of a home in 2020 and in some areas like north Vancouver Island, we saw a huge increase in pricing.”
Comparing 2020 to 2019:
- Overall sales in the Comox Valley were up nearly 14 percent and the average house price increased nine percent to $631,705.
- Unit sales in Campbell River were 16.6 percent higher and the average house price increased nearly nine percent to $537,768.
- Overall sales in the Cowichan Valley jumped 14.7 percent and the average house price rose nearly nine percent to $571,578.
- Unit sales in Nanaimo rose nearly 13 percent and the average house price increased nearly nine percent to $$616,588.
Across the province, the B.C. Real Estate Board Estate Association expects more of the same next year.
It forecasts MLS residential sales in B.C. to rise 15.6 per cent this year.
In 2022, they are forecast to pull back nine per cent.
“After an unprecedented and often surprising performance in 2020, the provincial housing market is set up for a very strong year in 2021,” said Brendon Ogmundson, BCREA Chief Economist. “A strong economic recovery and record-low mortgage rates will continue to drive strong demand this year.”
On the supply side, new listings activity recovered through the second half of 2020, but not nearly enough.
As a result, market conditions will start 2021 very tight, with the potential for strong price increases through the spring and summer until new supply comes online.
The BCREA is predicting a 7.7 per cent rise in prices, followed by a further three per cent in 2022.
Reid says the island’s market is also going to remain strong because of supply and demand.