A lack of inventory is putting the squeeze on Vancouver Island’s real estate market.

Island-wide, sales of single-family homes in January dropped by 16 per cent from one year ago and were 26 per cent lower than in December.

Vancouver Island Real Estate Board president, Kevin Reid, said a big reason behind the sales slump is a shortage of single-family homes on the market, which is leading to a steady rise in prices.

“There’s not enough housing to go around and I think that’s pretty much Canada wide,” Reid said. 

“And here on Vancouver Island we have a lot of people who are in rental situations that would prefer to be homeowners and are struggling to get their downpayment so they can buy their own home, and then when they do get in the market, they’re faced with prices that are higher than ever before in history.”

The number of single-family homes up for sale last month dipped 14 per cent from the previous year.

Real estate statistics for single family homes on Vancouver Island in January. (Supplied by Kevin Reid)

And while inventory is down, prices continue to inch up.

The benchmark price of a single-family home board-wide on the island was $515,400 in January, a four per cent increase from one year ago. (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 five per cent, hitting $309,300, which is two per cent higher than in December. 

The benchmark price of a townhouse last month rose by three per cent year over year, climbing to $408,600, and was virtually the same as in December. 

Regionally, the benchmark price of a single-family home in the Campbell River area last month was $437,300, an increase of four per cent over last year. 

In the Comox Valley, the benchmark price reached $521,900, up by four per cent from one year ago. 

Real estate activity on Vancouver Island. (Supplied by the Vancouver Island Real Estate Board)

Reid said prices will continue to inch higher, so long as demand outweighs supply.

“When a home seller is not faced with the competition of, say, a brand-new home down the street that has been made available at a reasonable price, that seller of a pre-owned property can hold out for more money,” he added.

Reid said potential home sellers are holding off because there isn’t enough housing. Adding to the challenge is low rental vacancy rates. 

“If you were looking to sell your house and you wanted to purchase another one, and you don’t see the prospect of your next home situation being made available, or (for) a price you can afford, you tend to sit tight and hold on to what you have,” Reid said.

He said a growing population, not only on the island but across Canada, is also a factor: “The population in Canada has been growing steadily for the last number of years, and the pace of growth within our municipal structures – Campbell River, Courtenay, Parksville-Qualicum – has not kept pace with the demand for housing.”

Reid pointed out that the east coast of the island is a “very desirable place to live,” which adds to the housing crunch.

Hope could be on the horizon as the weather warms up.

Reid cautioned that while activity tends to ramp up in the spring, but there are also more people looking to buy, as well.

“In the spring and early summertime on the east coast of Vancouver Island, we typically see more houses coming on the market, the inventory coming up a little bit but we also see an increase in buyers, so we’re moving into that fast-paced activity portion of our year.”