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Serious inventory shortage putting squeeze on island homebuyers

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Different month, same issues for Vancouver Island’s real estate market.

Historically low inventory and a steady rise in prices have been the norm for months now, and October was no exception.

The Vancouver Island Real Estate Board (VIREB) reported 398 single-family homes sold last month, marking a 23 percent drop from a year ago.

There were 122 condo apartment sales last month, a six per cent decrease from October 2020. In the row/townhouse category, 88 units sold compared to 98 the previous October. 

VIREB says there is “little doubt that a dearth of active listings is causing the sales decline.”

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Buyers continue to face frustrating hurdles caused by historically low inventory, with little relief in sight. 

Active listings of single-family homes were 46 per cent lower last month than in October 2020 and dropped by 18 per cent from September. V

Vancouver Island’s inventory of condo apartments declined by 63 per cent from one year ago and was 26 per cent lower than in September. 

However, there was some positive news for townhouse buyers. While active listings in this category dropped by 39 per cent year over year, inventory increased by 13 per cent from September.

In its most recent housing forecast, the British Columbia Real Estate Association (BCREA) stated that the supply situation is especially severe in markets outside the Lower Mainland, including Vancouver Island. 

According to VIREB, listings activity has been so lacklustre, even if sales come back down to long-run average levels, total listings would need to nearly double to bring markets back into balance. 

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Board president Ian Mackay says the road to doubling those listings is paved with increasing the housing supply.

“Unless demand drops significantly or more inventory comes online through new construction, VIREB’s inventory situation likely won’t improve,” Mackay said

Mackay welcomes the news that the provincial government is giving local governments more tools and powers to simplify and speed up their development approvals processes, helping to build the homes people need more quickly.

“Real estate is all about supply and demand. New construction isn’t a quick solution, but it’s the only one that can address the housing shortage, and, hopefully, temper prices,” Mackay said.

That would be welcome news for anyone still dreaming of buying a house in particular, because, island-wide, the benchmark, or typical, price of a single-family home reached $757,300 in October, up 31 per cent year over year. 

In the apartment category, the benchmark price hit $397,200 last month, a 30 per cent increase from October 2020. The benchmark price of a townhouse was up by 34 per cent year over year.

In Campbell River, the benchmark price of a single-family home hit $663,000 last month, which is up by 29 per cent from the previous October. In September, it was $653,700.

In the Comox Valley, the year-over-year benchmark price rose by 31 per cent to $779,000. (The price has also gone up nearly $8,000 from September).

The Cowichan Valley reported a benchmark price of $756,900, an increase of 30 per cent from October 2020. 

Nanaimo’s benchmark price rose by 28 per cent, hitting $755,500, while the Parksville-Qualicum area saw its benchmark price increase by 34 per cent to $887,300. 

The cost of a benchmark single-family home in Port Alberni reached $504,000, a 36 per cent year-over-year increase. 

The benchmark price for the North Island rose by 55 per cent, hitting $418,800 in October.

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