In my last market report (Nov 11, 2022) I outlined how the market had peaked in March and declined through 2022. My post ended with "Will be interesting to see what spring 2023 will look like."
It is now April 17th, 2023 and I can say that there is nothing very "interesting" (dramatic) to report - the price decline has certainly SLOWED, and has even started to reverse in some of the markets on the Island. "This could indicate that they’re bottoming out, and when the market shifts – and it always does – it usually happens without much of a warning," said Kelly O'Dwyer, chair of our real estate board.
The optimism seems well-founded. Sales volume of (detached) homes on the Island increased by 73% in March compared to the previous month. People are definitely buying homes! But there continues to be a tension between (some) sellers who expect too much for their properties, vs. (some) buyers who think they can "lowball" after hearing sensational news reports about general decline.
While there continues to be speculation about recession, the Canadian and BC economies are both performing better than some analysts had predicted; the interet hikes ended, inflation is slowing, employment rides high, and immigration is strong despite concerns about whether there will be housing for newcomers (that may help to keep prices buoyant, fortunately for some and unfortunately for others). The Island certainly continues to be a destination.
In terms of supply: More properties are being listed than in 2022, but there is still too little inventory to constitute a balanced market.
On Property TYPES: Detached vs. Attached
There are a lot of new strata developments happening or proposed in the Nanaimo area, although many of them have been sitting somewhat idle during the recent slowdown. For example, some developments with preliminary approval from the municipality appear to have slowed their builds, and partially-built stratas are holding off on listing their inventory, apparently preferring to list when prices have increased. I think we might see condo prices rise more slowly in relation to detached homes in the next couple years, owing to the sheer number of apartment buildings under construction in Nanaimo - whereas large-scale detached home developments are less active at this time. (I should note that the biggest drops in prices in the past year (as much as 15% in some cases) have been in the single-family-detached market, whereas the drops in strata prices have been closer to 5% - so there is much more room for growth in the SFD market.)Posted by Gerry Thomasen on