The question I am asked the most these days is what is the Real Estate outlook for the central Island area? As difficult as it is to predict how long it will take for Canada's housing market to recover, one thing for certain is that the impact in our area will be less affected.
You cannot blanket the entire Canadian market under the same discussion in regards to trends. I am seeing already that across the country it is being felt very differently region to region.
Each month I take the time to reach out to my Canadian Network to get a pulse on how things have impacted them and each area has its own views and struggles. It is apparent that we have faired very well here and are extremely lucky which we can't take for granted. I am seeing that the trend for buyers decisions for their families is lifestyle and affordability at the forefront which means our area will continue to stabilize. You can see trends that indicate outlying areas like Chilliwack, Abbotsford are seeing a boost in inquiries and noting that Nanaimo was top 5 in searches for Real Estate in BC ahead of, Kelowna, Surrey and even Victoria which plays a part in our affordability.
Looking at Calgary and Edmonton I think the exposure to the energy sector will be felt with a longer-term fallout in that real estate market. I still see an unprecedented impact on Canada's urban centres. Cities will bounce back like Vancouver, but there is uncertainty with respect to the timing of the recovery.
Taking a look across Canada we see a rebound by a record 56.9% in May 2020; although, that is as a percentage one of the weakest months of April on record. As such, the May gain constituted a return of only a third of the activity lost between February and April, and the May 2020 sales figure was still the lowest level for that month since the mid-1990s. (Chart A)
In our area it is much the same with May numbers showing that the market may already be recovering. I was able to advise many of my clients to move ahead of this pent up activity and have successfully negotiated many multiple offers with offers on some of the luxury homes above the 3 Million range, something you don’t see much of in a good market.
Last month on the Vancouver Island board there were 246 single-family homes sold based on the Multiple Listing Service® (MLS®) compared to 189 in April 2020 and 456 in May 2019. Sales of apartments decreased by 56% year over year but were significantly higher than in April, with 44 properties changing hands compared to 17 the previous month. Townhouse sales dropped by 70% year over year but rose by 65% from April.
The benchmark price of a single-family home board-wide was $528,800 in May, an increase of three % from the previous year and marginally higher than in April. (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 three % as well, hitting $306,400, down about one % from April. The benchmark price of a townhouse in May rose by three % year over year and was slightly higher than in April, climbing to $423,300.
Regionally, the benchmark price of a single-family home are as follows.
Campbell River: $449,900, an increase of five % over last year.
Comox Valley: $532,000, up by two % from one year ago.
Duncan:$482,100, an increase of three % from May 2019.
Nanaimo:$575,300 in May also a 3 % increase.
Parksville-Qualicum area saw its benchmark price increase by around one % to $594,800.
Port Alberni reached $331,200 in May, a six % increase from one year ago.
On a provincial level, home sales throughout B.C. posted sharp declines in April due to the COVID-19 pandemic. Now that British Columbia is in the third phase of its Re-start Plan, the British Columbia Real Estate Association (BCREA) anticipates that low interest rates and pent-up demand will translate to a significant recovery in home sales and prices. Historically, housing markets usually bounce back after a recession.
Since real estate was designated an essential service, some transactions have continued despite the pandemic, but the first priority of the real estate industry has been public health and safety.
Being able to get ahead of trends and market cycles is something I have spent 27 years cultivating and I welcome your inquires or input. I also appreciate hearing from those that disagree with my viewpoint as I like to balance my findings.
We are lucky to be living on Vancouver Island, the lifestyle we have is the best in the world and I for one want to keep it that way. Thank you to everyone who have helped and took things seriously when it was most needed.
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