A lack of housing inventory appears to be the driving force behind significant increases in the assessed values of residential property in the mid-Island region, according to the Vancouver Island Real Estate Board.
“It’s a very similar story to Victoria. We are lacking inventory, which has driven prices up,” said Nanaimo real estate agent Janice Stromar, president of the Vancouver Island board.
B.C. Assessment data released this week shows most residential home assessments on the Island jumped between five and 25 per cent.
Some parts of Greater Victoria saw increases as high as 40 per cent, and while the mid-Island didn’t match that kind of value increase, there were double-digit percentage jumps in major centres.
B.C. Assessment said a typical residence in Nanaimo increased in assessed value by 14.5 per cent to $385,000, while in Qualicum Beach it jumped 13.4 per cent to $449,000. In Ladysmith, values increased 12.3 per cent to $336,000 and in Parksville it increased 11.7 per cent to $361,000.
Stromar said the lack of inventory played a big role around the mid-Island, and will continue to do so until new supply comes on stream. She said some of the problem is media driven, as people are afraid to put their homes on the market because they’ve been told they will have difficulty in finding a new one. “But we’re told by the B.C. Real Estate Association that it won’t be as crazy this year,” she said.
Stromar said there is plenty of new housing coming out of the ground in Nanaimo right now that will help ease demand in 2017.
She said demand in the region is coming from young families, and a strong increase from Vancouver.
“I don’t recall having ever seen so many people coming from Vancouver, and they are not necessarily retiring,” she said, noting many are telecommuting, and the mid-Island economy offers plenty of employment opportunities.
The story is the same in Parksville, said Kim Burden, executive director of the Parksville and District Chamber of Commerce.
Burden said their real estate market is strong at the moment with demand coming from people moving from other parts of the Island, the Lower Mainland and the Prairies.
“I think the change in [home values] may be helpful as it may bring more product onto the market,” he said, noting there is a lot of construction currently underway that should deal with pent-up demand this year.
“I don’t believe our market will change a lot, though,” he said. “Our biggest issue is the lack of inventory, and this [increase in assessed values] could spur new construction on, but I’m not overly optimistic.”