Even Prince Edward Island is now seeing bidding wars, which in turn have become major drivers of home price growth over the past few years.
A rental vacancy rate of 0.2% in Charlottetown has helped propel this phenomenon.
“It does happen, no question,” Century 21 and Colonial Realty broker/owner Joel Ives told CBC News.
“People are banging on doors, saying ‘I really like your house, are you interested in selling?’ And some people say ‘yes, maybe we are if the price is right.’”
Competition is especially fierce in the $250,000 to $350,000 price bracket – all the more because any new construction in Charlottetown tends to be either in the starter home or luxury categories.
From 2016 to 2019, the average home price in PEI’s capital grew by 38.5%, settling at $277,000 as of mid-year.
This considerably outpaced other high-volume cities like Victoria (33.3%), Toronto (25.3%), Montreal (17.7%), and Vancouver (10.93%). The only markets that exceeded the Charlottetown figure were Ontario’s Niagara Region and some sections of Vancouver Island.
PEI Real Estate Association president Greg Lipton noted that a steady influx of new consumers represented further demand. From 2010 to 2018, the province has seen the entry of over 12,000 immigrants.
“They came with a lot of money and they wanted something new, and we didn’t really have a lot of new stuff at that time,” Lipton said. “New construction is very expensive. We’re up to close to $200 per square foot nowadays to get anything built.”
However, Ives cautioned that more and more young households will be moving to duplexes or semi-detached units, amid the trend towards higher-end offerings among developers.
“It’s always been somewhat of a struggle. Parents have helped children buy houses for generations and that’ll continue.”
Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth.
Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance.
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