NORTHERN VANCOUVER ISLAND, B.C. – Tighter mortgage rules and higher interest rates are taking a toll on Vancouver Island’s real estate market.
The Vancouver Island Real Estate Board (VIREB) reported that the mortgage stress test, also known as Guideline B-20, has been a major factor in the sales of single-family homes in January dropping 28 per cent from a year ago.
However, sales did rise by 23 per cent from December.
Local realtor and VIREB president-elect Kevin Reid said the term “balanced market” is more accurate than “buyers’ market” even with the pendulum appearing to shift towards people looking to purchase homes.
“I think the market is moving into a more balanced position,” Reid reiterated.
“Sales are up (in the region) nine percent from last January 2018, and I attribute that to there being a little more inventory on the market and buyers having more opportunities to negotiate,” he added.
The market heated up in the North Island in January, compared to December.
In Campbell River, sales of single family homes rose from 13 in December to 24 in January, marking a 24 percent jump month to month.
It was more of the same in the Comox Valley, with the number of homes changing hands over the past two months climbing from 25 in December to 43 in January.
Looking ahead to the rest of 2019, Reid predicts the North Island will continue to attract ‘mainlanders’ who are migrating across the Strait of Georgia in search of affordable housing.
“I’ve had many meetings and conferences with my colleagues from the Greater Vancouver/Fraser Valley area and there will still be a lot of buyers coming to Vancouver Island from the Greater Vancouver area, so that will be a continued driver,” he said.
Reid said those who managed to sell their homes in the Lower Mainland, despite a plummeting market and slipping, are “equity harvesting” because the market is still considerably less expensive across northeastern Vancouver Island.
Townhomes and apartments continue to be desirable for buyers on the North Island.
“Twenty-eighteen for sure, was the year of the townhouse,” Reid said. “It becomes an excellent entry-level product priced appropriately around the $400,000 mark for a really nicely finished townhouse.”
Year to year, sales results were mixed.
Sales in Campbell River jumped 26 percent in January compared to January 2018, while the number of homes sales in the Comox Valley dipped 19 percent.
And even with the new mortgage rules, the average home price continues to rise in both regions.
The benchmark (typical) price for a single family house in Campbell River last month was $473,696, a 20 percent jump from January 2018 when the average home went for $393,179.
In the Comox Valley, the benchmark (typical) price for a single family house was $557, 156, up 13 percent compared to the previous January when the average house price was $493,340.