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Supply shortage fueling bidding wars on Vancouver Island

B.C.’s real estate market is facing a supply shortage of epic proportion.

While that’s great news for sellers looking to cash in, it’s pushing some buyers out contention.

Case in point: In Langley, a modest two-bedroom home in a 45-plus gated community sold for $500,000 over asking.

Realtor Suki Bahi says the strata property had 110 showings in five days and 20 offers, all from seniors.

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“It was driven by seniors and it was crazy,” she said. 

We’re seeing similar scenarios on Vancouver Island.

The Vancouver Island Real Estate Board is reporting its lowest inventory on record, and the homes that are on the market aren’t on there for long.

VIREB director and past president, Kevin Reid, says the market on the island is very aggressive.

“There’s not enough quality housing to fill the demand of capable buyers, so we are seeing multiple offer scenarios, bidding war scenarios… they’re very common these days in properties that are desirable,” Reid said.

“Any good quality home is generally attracting two or more offers and often those offers are significantly over-ask.”

Reid said it boils down to supply and demand. 

“In my conversations with the BCREA last week, Vancouver Island has the least amount of housing supply for the number of capable buyers than anywhere else in the province of British Columbia,” he added. “I know that if we were to have a huge influx of housing supply into the market right now, it would calm our market significantly. Buyers would be able to buy homes, builders would have lots to build new houses on.”

The robust housing market is fueling a massive price increase, island-wide. 

The benchmark price of a single-family home hit $609,100 last month, 15 percent higher than in February 2020. 

The benchmark price of an apartment reached $325,000, an increase of nine percent, while the benchmark price of a townhouse rose by 15 percent year over year, climbing to $466,200.

In Campbell River, the benchmark price of a single-family home hit $547,700 in February, an increase of 18 percent over last year. 

In the Comox Valley, the benchmark price was $631,400, up by 15 percent from one year ago. 

Duncan reported a benchmark price of $572,900, an increase of 17 percent from February 2020. 

Nanaimo’s benchmark price rose by 12 percent, hitting $617,700, while the Parksville-Qualicum area saw its benchmark price increase by 13 percent to $695,600. 

The cost of a benchmark single-family home in Port Alberni reached $378,200, a 16 percent year-over-year increase. 

For the North Island, the benchmark price rose to $291,900, a 12 percent increase over last year.

Reid said if you’re a seller, “you’re feeling pretty fabulous,” but if you’re a buyer, “you’re faced with a crisis of affordability and I think that’s a very real situation.”

Reid said the BC Real Estate Association and VIREB are lobbying to speed development up, getting new building lots to market and “getting the municipal process to run just a little bit faster.”

“If there were more housing available, we wouldn’t see this competitive situation and people would get what they want.”

He said a one-sided market like this, makes it a very challenging time for both realtors and buyers.

“If you’re a buyer right now, you’re entering into competition, after competition, after competition, and as a realtor you just want to get a nice family a house  (to buy), and they’re getting beat up in the marketplace, and it’s a very challenging situation.”

Reid said it’s not uncommon to see five to six offers on a home and homes selling for “thousands and thousands of dollars over asking price.”

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