What You Need to Know About the Comox Valley Real Estate Market

Vancouver Island continues to be one of the most enchanting places in British Columbia or perhaps Canada. But affordability? This is an entirely different story as prices continue to skyrocket throughout the region. Like many other parts of the western province, Vancouver Island, and its surrounding areas, including Nanaimo, Port Alberni and Comox Valley real estate markets keep posting exceptional growth, even as interest rates maintain their upward ascent.

For months, housing experts have stated that the overall Vancouver Island real estate market is out of balance. Whether it will return to balance or not remains to be seen, but it is clear that more supply needs to come online to help slow down growth or reduce prices.

That said, here is a brief look at the Comox Valley real estate market.

What You Need to Know About the Comox Valley Real Estate Market

Sales activity slowed down in May (the most current data available at time of publishing) as demand continued to wane gradually.

In May, the Comox Valley real estate market reported a benchmark price increase of 25 per cent on an annualized basis, soaring to just under $911,000, according to the Vancouver Island Real Estate Board (VIREB). On a month-over-month pace, residential property prices also gained 11.5 per cent.

According to VIREB, residential property sales tumbled at an annualized rate of 10.1 per cent, totalling 80 units. On a month-over-month basis, housing transactions dipped 1.2 per cent.

Price growth in the Comox Valley real estate market was exceptional. The benchmark prices rose 28 per cent year-over-year in May, soaring to just under $911,000. At a monthly pace, residential property prices gained 11.5 per cent.

The other popular property types also recorded handsome gains, with the benchmark price for apartments rising 33 per cent to $455,800. Comox townhomes also advanced more than 25 per cent to $617,200.

As active listings of single-family homes jumped 32 per cent in April, association data show, supply has increased in the region. But new housing construction notably declined in the first quarter as Canada Mortgage and Housing Corporation (CMHC) plummeted 71.4 per cent year-over-year to 22 units.

Still, according to industry experts, the fear of missing out, or FOMO, has diminished in recent months. At the same time, it will be a while until conditions return to balance and the real estate market is healthy once again.

“I was actually quite shocked to see we were up 32 per cent from last May of 2021 with our new benchmark price on Vancouver Island of $867,000,” said Kelly O’Dwyer, the Vancouver Island Real Estate Board’s Vice-President, in a recent interview with Chek News. “We’re still seeing the pressure from Vancouver people selling and wanting to move to Vancouver Island for sure up to Campbell River, Courtenay, Comox; those prices are still holding.”

What About the British Columbia Economy?

Although price growth has remained resilient in a rising-interest rate environment, financial analysts warn that British Columbia’s strong economic growth will be unable to maintain its performance in 2022.

Unfortunately, as the red-hot housing market gets doused by higher interest rates, Royal Bank of Canada (RBC) Economics forecast that B.C. would slip into the “middle of the pack” this year.

In a surprising turn of events, it will be (+6 per cent), Alberta (+5.7 per cent) and Manitoba (+4.8 per cent) that will lead the nation in economic expansion this year, mainly because the real estate sector will cool in the nation’s two most populous provinces: Ontario and British Columbia.

“We expect rising interest rates will further moderate home resale activity in the period ahead and broaden the cooling effect to other regions. Rapidly deteriorating affordability – especially in Canada’s most expensive markets – will make it increasingly difficult to sustain recent property values,” RBC economists Robert Hogue and Carrie Freestone said in their analysis.

“In fact, we believe home prices have already reached a tipping point in several markets in Ontario and British Columbia. Slower activity will tamp down the substantial contribution the housing sector made to economic growth during the pandemic.”

This could be a challenging market for first-time homebuyers to navigate moving forward. Since price inflation is sticky, the cost of housing is likely to remain elevated. Even if some of the bearish projections are accurate, the price of a home will probably continue to be much higher than before the coronavirus pandemic.

This is why it is critical for prospective homeowners to work closely with an experienced, professional real estate agent to help them find the best residential property suited for their needs and their budget. With rates increasing, inventory still scarce, and prices tumbling at a modest pace, the need for realtors has never been greater.