Pent-up demand is fueling the housing market on Vancouver Island and across B.C.
A report released today from the BC Real Estate Association shows that sales jumped nearly 44 percent last month compared to October 2019.
BCREA chief economist Brendon Ogmundson says while demand may be starting to fade, record low interest rates and a recovering job market are supporting strong sales.
On Vancouver Island, sales jumped nearly 77 percent last month compared to the previous October.
However, there was a slight drop in home sales in September, because there just wasn’t enough on the market.
Vancouver Island Real Estate Board president, Kevin Reid, says he doesn’t see things cooling off, even with the second wave of the pandemic.
“Demand is high,” he said. “People are wanting to come to the island, there is a shortage of housing, and that’s probably the single-most limiting factor: the number of houses for sale. Historically speaking, when there’s that negative inventory shock, prices spike up and people cash in. So people bring their homes to market because the pricing is very attractive.”
The benchmark price of a single-family home on the island hit $536,500 in October, which is up three per cent year over year.
The year-over-year benchmark price of an apartment rose by three per cent, hitting $304,200.
The benchmark price of a townhouse rose by nine percent year over year, climbing to $438,200 and an increase of one per cent from September.
Reid hopes prices will stabilize across the island.
“We definitely need to have more listings, and more homes being built at prices that most people can afford to pay,” he said.
He also said he’s very concerned about the financial impact from the pandemic.
“The very near future there are a lot of challenges to be met by our communities and our citizens and I’m hoping on Vancouver Island, we can counter-effect the number of cases that are happening,” Reid said.
“The citizens shop local and support their businesses and I hope people in the business community work with each other to get through a challenging time.”
Meanwhile, demand outweighing supply is a province-wide theme.
Ogmundson says prices are also being pushed higher by a lack of inventory.
Total provincial active listings continue to trend lower and were close to 14 percent lower in October 2020 compared to 2019.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
