The Vancouver Island Real Estate Board has indicated that, although there has been a small inventory bump in January 2022, demand is still far outpacing supply for residential properties.
According to the monthly statistics report from the Vancouver Island Real Estate Board (VIREB) for January 2022, active listings single-family homes were 39 per cent lower last month than the previous January but rose by 15 per cent from December 2021.
By category, 220 single-family homes sold on the MLS® System on Vancouver Island in January, a 22 per cent decrease from one year ago. There were 91 condo apartment sales last month compared to 87 one year ago and 75 the previous month. In the row/townhouse category, 61 units sold in January compared to 77 one year ago and 50 in December 2021.
The British Columbia Real Estate Association (BCREA) states that with markets out-of-balance, “it will take a substantial decline in demand to return active listings to a healthy state.”
Further, the Bank of Canada is signalling that it will begin raising its policy rate or “tightening” monetary policy this year in response to elevated Canadian inflation. The VIREB says that historically, the Bank of Canada’s tightening has led to 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, the VIREB says that tightening is unlikely to result in significant price decreases because of severely low supply on the Island.
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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.”
The board-wide benchmark price of a single-family home reached $804,500 in January, up 36 per cent year-over-year. In the apartment category, the benchmark price hit $409,100 last month, a 29 per cent increase from January 2021. The benchmark price of a townhouse increased by 35 per cent, climbing to $620,400 in January.
When looking at specific regions covered by the Vancouver Island Real Estate Board, it was Port Alberni and the North Island that saw the largest year-over-year increase with single-family homes, rising a total of 52 per cent from January 2021 in both areas.
The cost in Port Alberni for a benchmark single-family home reached $553,900 and on the North Island, $434,400.
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, while the Parksville-Qualicum area saw its benchmark price increase by 40 per cent to $952,900.