MARKET SHIFTING AMIDST LIGHTER DEMAND AND MORE INVENTORY

The Vancouver Island Real Estate Board (VIREB) housing market appears to be shifting amidst lighter demand and increased inventory.

Last month, active listings of single-family homes (not acreage or waterfront) climbed by 64 percent from May 2021 and 34 percent from April of this year. VIREB’s inventory of condo apartments in May was 28 per cent higher than one year ago and increased by 32 per cent from April. Row/townhouse inventory rose by 49 per cent year over year and 12 per cent from April.

The increased inventory is good news for buyers, giving them more options to choose from and easing the pressure to move too quickly when making an offer. However, the market still favours sellers, and balanced conditions seem to be some distance away. According to the British Columbia Real Estate Association (BCREA), it will take a substantial decline in demand to return active listings on Vancouver Island to a healthy state.

By category, 455 single-family homes were reported sold on the MLS® System in May, a 14 per cent decrease from one year ago and down by 10 per cent from April. There were 92 condo apartment sales last month, a decline of 38 per cent year over year and down by 19 per cent from April. In the row/ townhouse category, 103 units changed hands in May, up 10 per cent from one year ago and seven per cent from April 2022.

As for prices, they continue to rise throughout the VIREB area. The board-wide benchmark price of a single-family home reached $867,000 in May, up 30 per cent year over year. In the apartment category, the benchmark price hit $451,900 last month, a 36 per cent increase from May 2021. The benchmark price of a townhouse increased by 30 per cent, climbing to $618,900 in May.

In Campbell River, the benchmark price of a single-family home hit $776,200 in May, up by 29 per cent from the previous year. In the Comox Valley, the year-over-year benchmark price rose by 25 per cent to $910,900. The Cowichan Valley reported a benchmark price of $886,300, an increase of 35 per cent from May 2021. Nanaimo’s benchmark price rose by 29 per cent, reaching $901,400, while the ParksvilleQualicum area saw its benchmark price increase by 30 per cent to $1,002,700. The cost of a benchmark single-family home in Port Alberni reached $617,400, a 43 per cent year-over-year increase. For the North Island, the benchmark price of a single-family home rose by 36 per cent to $456,200.

Looking to the future, VIREB cautiously aligns with the BC Financial Services Authority (BCFSA) regarding its recently released report recommending a package of measures intended to enhance consumer protections in British Columbia’s real estate sector. “Consumer protection is of utmost importance to REALTORS®, and the proposed five-day pre-offer period is one of the suggested measures introduced in BCREA’s white paper, A Better Way Home,” says Erica Kavanaugh, 2022 VIREB President. “However, the success of the proposed measures hinges on the next steps taken by BCFSA and the provincial government.”

Kavanaugh adds that more time, research, and consultation with all parties involved in the real estate transaction process – including REALTORS® – are needed to ensure the nuances of such substantial changes are carefully considered, and unintended consequences on consumers are avoided.