Strong demand, low supply driving competitive P.E.I. housing market
'Our market has not grown more than the market can bare'
P.E.I.'s Real Estate Association said high demand and low supply have made the market for a home on the Island as competitive as ever this summer, particularly in the Charlottetown area.
According to the association's numbers, while home sales are just about on pace with 2016's, a record year for P.E.I. real estate, the number of listings across the province has dropped nearly 30 per cent.
"So if you take that amount of homes off the market, then what happens?" said the association's president Mary Jane Webster. "You have the same population looking for a third less homes."
Charlottetown realtor Jie Hu, who works mostly with Chinese newcomers, said she's seen first-hand just how competitive the market has become.
"If you wait a day after a house is listed, sometimes you don't even have a chance to view the house, because the listing agent says 'oh, we just got an accepted offer last night,'" Hu said. "If the property is in a good location and in good condition and if the listing price is attractive, the vendor will possibly get multiple offers."
That reality isn't lost on Wembo Jia and Raya Su. They moved to Charlottetown from Beijiing in mid-July with their two children, and started looking for a house right away.
"The houses sell quickly," Jia said. "So if we see a good house, we will buy quickly."
Housing prices up
The high demand and low supply has driven up housing prices on P.E.I. According to the association's numbers, the average price of a home on the island was up 11.5 per cent in the first six months of this year compared to same period in 2016.
In June of this year, the average home price sat at $219,235.
"So we're not seeing houses going for $100,000 over asking price. That's not our reality," said Webster. "So our market has not grown more than the market can bear."
Webster suspects the house supply issue will correct itself in the next few years, given the jump in the number of new builds taking place in the Charlottetown area.
According to the Canada Mortgage and Housing Corporation, housing starts in Charlottetown and Summerside in the first six months of 2017 are up 46 per cent over the same period last year.