P.E.I. housing market remains steady as prices and sales dip across Canada

CHARLOTTETOWN, P.E.I. — The housing market in Prince Edward Island is starting to decelerate after a document 12 months of gross sales and costs. Nevertheless, these seeking to purchase their first house might have difficulties discovering it.

A latest research of small Canadian actual property markets by REMAX reveals Charlottetown noticed a 17 per cent spike in gross sales from the primary quarter of 2021 to the identical time in 2022 – 458 gross sales up from 390.

Nevertheless, numbers in April present gross sales are starting to gradual, largely attributable to fewer homes being out there to promote, mentioned Mary Jane Webster, proprietor and dealer of REMAX Charlottetown.

“At this level, we’re operating into a listing problem so our gross sales by way of numbers of transactions are down, however our housing sale costs are up. That’s actually a supply-demand consequence,” she mentioned.

Regardless of the decrease gross sales, Webster mentioned P.E.I.’s market continues to be comparatively busy because of the pent-up demand of consumers keen on getting a chunk of the Island’s actual property.

Excessive-density housing

This implies these on the lookout for their first house might face stiff competitors when looking for a home relying on what they’re on the lookout for, mentioned Webster.

“If the first-time purchaser is on the lookout for a single-family dwelling, that area goes to be fairly aggressive,” she mentioned. 

“What we’re seeing is first-time consumers are shifting a bit bit and saying OK, for a similar worth, I can get into new development, however it’s semi-detached or a part of a city home. Someplace between a two- or a six-unit property. They’re simply shifting their mindset a bit bit.”

This shift in mindset can also be doubtless being pushed by present growth developments corresponding to constructing duplexes or townhouses over conventional single-family properties, mentioned Webster.

“When builders are ready to try this greater density hooked up housing, they can hold (the price of development) in a extra manageable place,” she mentioned.

“Hooked up housing and high-density housing is a comparatively new idea to P.E.I. Not completely new, however for those who have a look at any bigger cities in North America, most occasions somebody’s entry into the housing market is a small apartment or a city home, and we’re slowly beginning to settle for that.”

By the numbers:

A latest research of small Canadian housing markets by REMAX confirmed elevated gross sales and costs in smaller markets throughout the nation, together with in Summerside and Charlottetown.

• The typical worth of a house in Charlottetown jumped 22 per cent from the primary quarter of 2021 (January 1 to March 31) to the identical time interval in 2022 — climbing from $287,700.00 to $339,000.00. Summerside noticed the same enhance of 20 per cent.
• Throughout the identical time durations, the variety of gross sales in Charlottetown noticed a 17 per cent enhance from Q1 2021 to Q1 2022 — 458 gross sales up from 390.

Supply: REMAX 2022 Canadian small markets report

Stress check

Rising rates of interest are additionally making it troublesome for first-time house consumers to get into the market. James Marjerrison, president of the P.E.I. Actual Property Affiliation, mentioned charges are anticipated to proceed rising, and may very well be anyplace from one to 1 and a half per cent greater by this time in 2023.

“When it comes to what it does for the market, is it places that rather more strain on the stress check,” he mentioned. “It makes shopping for a home that rather more difficult. It’d imply it’s good to put down a bigger down fee and it will increase your month-to-month fee.”

P.E.I.’s market has additionally seen a rise within the variety of move-up consumers, these seeking to promote their present properties for one thing greater and higher. Marjerrison mentioned these consumers are faring out higher within the Island’s market.

“In case you are already a house owner and you’re promoting to purchase one thing else, you’re in a little bit of a greater place since you’ve already gained some fairness within the worth of your own home,” mentioned Marjerrison.

“Though you’re shopping for excessive, you’re promoting excessive, so you’re on a little bit of an excellent enjoying area. In case you are a first-time house owner, the market over the past couple of years has form of gotten away from you. I’d think about it’s much more difficult for somebody seeking to purchase their first house on this market.”

Pricing index

Whereas gross sales and costs are starting to decrease throughout the nation, P.E.I.’s housing market is holding its costs attributable to its affordability when in comparison with the remainder of Canada, leaving Webster to consider our costs received’t be taking place any time quickly.

“I feel if something, we’ll see the pricing index degree out. It’s not going to go down.” mentioned Webster.

“For those who take into account the typical worth of a house in Canada is $750,000 to $800,000, and the typical worth for a house in P.E.I. is $350,000, we’re nonetheless extremely inexpensive. Our entry degree worth level is something actually underneath $500,000. That market goes to stay actually fairly busy.”

Cody McEachern is a reporter with the SaltWire Community in Prince Edward Island. @CodyInHiFi