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VIREB says island’s hot housing market ‘fueled by pent-up demand, low mortgage rates’

Vancouver Island’s real estate market keeps chugging along.

Sales in all categories were nearly double last month, compared to the previous September.

Vancouver Island Real Estate Board president, Kevin Reid, believes that fears over a second wave of COVID-19 is actually helping to rev up the market.

“In light of the COVID pandemic, I see buyers and sellers advancing their plans. There seems to be a whole cascade of effects coming out of the pandemic: people wanting to move sooner, to get their moves done before a second wave, or before restrictions on travel or moving around the province happen,” Reid said.

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“I’ve seen a number of families look at multi-generational properties, we’ve seen people who are looking at downsizing. In light of COVID, they’re thinking, ‘Well, we’re healthy now, times are right now, let’s get that transition from a larger, two-storey house to a single floor dwelling, a patio home’… that sort of thing. We’ve been seeing a lot of those kinds of moves that are definitely linked to the pandemic.”

Reid added that affordability and supply and demand are the key drivers.

“The value for dollar you get on the east coast of Vancouver Island compared to a lot of other places is still excellent, and when you look at the Comox Valley and the Campbell River area, specifically, you can get a nice house for a fraction of the price (compared to) Victoria (and) Vancouver. And there is a real shortage of homes to be sold.”

Overall, the VIREB recorded 1,287 unit sales (all categories) last month compared to 692 in September 2019, a healthy showing amid the economic downturn caused by a global pandemic.

Breaking those numbers down, 643 single-family detached properties (excluding acreage and waterfront) sold in September compared to 324 the previous year. Sales of condo apartments rose by 46 per cent year over year while row/townhouse sales increased by 28 per cent.

“The strength of our housing market has surprised us somewhat,” Reid said. “We frankly did not expect it to recover so quickly from the COVID-19 effect.”

Reid attributes the recovery to familiar factors: pent-up demand, low mortgage rates, and persistent supply shortages. 

The VIREB says the lengthy building-approval process “exacerbates the lack of housing supply at the municipal level.”

In the VIREB area, active listings of single-family detached properties (excluding acreage and waterfront) were only 909 in September, while there were 389 condo apartments and 204 row/townhouses for sale last month.

Reid notes that while some area buyers are motivated by a desire for more space, COVID-19 has accelerated lifestyle changes for some consumers.

“Our market is quite fluid right now, which makes it difficult to determine trends, but we have noticed that some buyers are advancing their retirement plans due to the pandemic,” he added. “Economic uncertainty is motivating other consumers to downsize and reduce their debt load.”

Although Reid expects the market to slow down in the coming months, he remains optimistic. However, he cautions sellers not to be unrealistic when it comes to pricing their homes.

“Correctly pricing your home is the key to a quick sale and may even result in multiple offers. Overpriced properties tend to linger whether we are in a buyers’ or sellers’ market.”

Even in a surprisingly hot market, prices leveled off somewhat last month.

Island-wide, the benchmark price of a single-family home was just over $527,300 dollars in September, up slightly from the previous year  but one per cent lower than in August.

The year-over-year benchmark price of an apartment rose by three percent, hitting $309,400 but down slightly from August. The benchmark price of a townhouse rose by six percent year over year, climbing to $434,300 and up slightly from August.

In Campbell River, the benchmark price of a single-family home hit $454,200, a small increase over last year. 

In the Comox Valley, the benchmark price was $523,500, a slight dip from one year ago. 

Duncan reported a benchmark price of $489,000, an increase of one per cent from September 2019. 

Nanaimo’s benchmark price dropped by three per cent to $553,600, while the Parksville-Qualicum area saw its benchmark price increase by three per cent to $612,800. 

The cost of a benchmark single-family home in Port Alberni reached $329,500, up two per cent from one year ago. 

For the North Island, the benchmark price reached $222,400, a 10 per cent increase over last year.

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