The Atlantic Canada real estate market has joined the broader housing sector boom in recent months. As some of the largest cities in the country post record sales and price growth, the Maritimes market is following suit and becoming one of the hottest areas of the country. From Nova Scotia to New Brunswick, Canada’s east coast is benefiting from a whole host of factors, despite the nation being in the middle of the coronavirus pandemic.
One of the Atlantic provinces to experience immense real estate activity? Prince Edward Island.
For years, the Island economy had been at a standstill, unable to achieve significant economic growth. However, this has changed in the fallout of the COVID-19 public health crisis as a mix of pent-up demand, historically low interest rates and evolving homebuyer trends is stimulating both the real estate market and the broader economy.
If you don’t believe it, it would be prudent to take a look at some of the most recent figures. According to the Prince Edward Island Real Estate Association (PEIREA), residential property sales rose 3.2 per cent in July, with 227 units exchanging hands. It should be noted that PEI was one home sale away from matching the July 2017 record. The average price of homes sold in PEI advanced 16.1 per cent to $274,630. Plus, the year-to-date average price increased by 13.6 per cent to $265,675. The total dollar value of all residential home sales in July surged 19.8 per cent from the same time a year ago. This is a record high.
But what is truly driving the booming PEI real estate market? Below we explore some of the leading factors contributing to the Island surge.
Atlantic Canada Real Estate: Prince Edward Island Trends
For a long time, Prince Edward Island and its Maritimes neighbours experienced an exodus of people in search of better economic opportunities within Toronto, Montreal and as far as the west coast. Of late, however, the tides seem to be turning.
The PEIREA says that the province has welcomed approximately 500 families so far this year, creating a huge demand for more homes. But the supply has failed to keep up. Active residential listings are down 26.4 per cent year-over-year, and there are 3.5 months of inventory (the number of months it would take to sell current stocks at the present rate of sales activity).
Supply is so low that some prospective homebuyers have taken to knocking on doors, in hopes that owners may sell their properties for the right offer, reports CBC News. The problem for a lot of sellers, however, is that there are limited options for buying, should they decide to sell.
Homebuyer preferences have changed considerably in the wake of the virus outbreak. As many Canadian businesses have embraced work-from-home policies, more homebuyers are embracing the opportunity to relocate to quieter, rural destinations, in search of more space.
“A big part of what we’re seeing right now is the snap back in activity that would have otherwise happened earlier this year,” said Shaun Cathcart, Canadian Real Estate Association senior economist, in a news release. “The new-found importance of home, lack of a daily commute for many, a desire for more outdoor and personal space, room for a home office, etc., will certainly also spur activity that otherwise would not have happened in a non-COVID-19 world.”
Job opportunities on the Island are also trending upward, according to the latest Statistics Canada data. The statistics agency said that the PEI economy created 1,900 full-time jobs in August, lowering the unemployment rate by a percentage point to 10.7 per cent.
Could an economic slowdown cause the PEI real estate market to hit the pause button? The Conference Board of Canada published its latest Provincial Economic Outlook, and it noted that the economy is expected to return to growth by the end of 2021. But this is projected without a second wave of the coronavirus nationwide. Thankfully, PEI has only reported 55 confirmed COVID-19 cases so far this year, indicating that a return to full lockdown measures is unlikely.
Will PEI Remain a Seller’s Market?
Overall, Prince Edward Island has morphed into a seller’s market, but the question remains: how much longer will it stay this way? Should population growth maintain an upward trajectory, developers might take advantage of the demand and erect new housing. A boost in housing supply could serve as a huge opportunity, for both PEI and the rest of the east coast, to attract people and businesses from across the country and around the world.