The Vancouver Island Real Estate Board (VIREB) released its report on sales in January. Once again, it shows higher benchmark prices, and very low inventory levels. In its release, the Board quotes the recent Market Intelligence Report, from the British Columbia Real Estate Association (BCREA).
That report calls the market “out-of-balance,” and says it will take a substantial decline in demand to return active listings to a “healthy state.”
The Board also says the Bank of Canada will begin raising its policy rate or “tightening” monetary policy this year in response to elevated Canadian inflation.
Historically, such moves by the Bank of Canada have caused falling home sales and flattening home prices.
“BCREA’s model simulations show that the most likely outcome of this round of Bank of Canada tightening will be home sales falling to near their historical averages and for home price growth to moderate. However, any tightening is unlikely to result in significant price decreases because of severely low supply.”
Erica Kavanaugh, 2022 VIREB President, echoes the real estate sector’s repeated calls for new measures to increase housing stock.
“Unless demand drops significantly or more inventory comes online through new construction, VIREB’s inventory situation likely won’t improve,” says Kavanaugh. “The issue of supply isn’t a new one in British Columbia, but the lack of inventory we’re experiencing has been compounded by the pandemic and decades of insufficient planning.”
VIREB’S January report shows the following benchmark prices for single-family homes on Vancouver Island in January:
- In Campbell River, the benchmark price of a single-family home hit $682,800 in January, up by 29 per cent from the previous year.
- In the Comox Valley, the year-over-year benchmark price rose by 32 per cent to $814,500.
- The Cowichan Valley reported a benchmark price of $782,900, an increase of 29 per cent from January 2021.
- Nanaimo’s benchmark price rose by 36 per cent, reaching $822,600.
- The Parksville-Qualicum area saw its benchmark price increase by 40 per cent to $952,900.
- The cost of a benchmark single-family home in Port Alberni reached $553,900, a 52 per cent year-over-year increase.
- The benchmark price of a single-family home for the North Island rose by 52 per cent to $434,400.