Charlottetown housing market to favour sellers in 2021, price expected to rise 4%

The Charlottetown housing market is currently a seller’s market, which is expected to continue in 2021, characterized by continued demand and upward pressure on prices. Indeed, Charlottetown real estate saw average residential price rise to $319,000 in 2020 (Jan. 1-Oct. 31) up from $294,000 in 2019 (Jan. 1-Dec. 31). Continued activity through inter-provincial migratory buyers is anticipated to impact demand in 2021. While there were some housing supply concerns throughout 2020, inventory is projected to improve slightly due to a booming new construction market. In light of these factors, the RE/MAX outlook for Charlottetown real estate in 2021 is an increase of 4% in average price to approximately $331,760 across all property types.

There are currently between one and three months of housing inventory in the Charlottetown housing market. Supply levels are expected to slightly improve in 2021. Thanks to the booming new-construction market.

Charlottetown housing market outlook 2021

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Who’s driving the Charlottetown housing market?

Charlottetown market activity in 2020 was driven strongly by move-over buyers who were commonly seeking out single-detached homes. Meanwhile, the regional condo market has remained flat through 2020.

Many buyers in Charlottetown have made lifestyle changes due to COVID-19 – namely spending more time in the home, and the desire for more space. This has been a common trend across many Canadian housing markets as well as regions abroad, with homebuyers seeking more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.

Popular neighbourhoods in Charlottetown based on 2020 sales include East Royalty, Cornwall and Stratford.

The region has seen increased activity from inter-provincial migration, and this is expected to remain strong in 2021. Looking ahead, the effects of COVID-19 restrictions are anticipated to impact the next year, with the potential for ripple effects to reach the housing market.

Canadian housing market in 2021

Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.

Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:

Canadian Housing Market Outlook REMAX 2021 Data Table

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Additional report findings include:

  • 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
  • 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
  • Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
  • 52% of Canadians believe real estate will remain one of the best investment options in 2021

“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”

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ARCHIVES

Following the initial impact of COVID-19 on the Charlottetown housing market, the months of May and June saw the biggest change with activity increasing toward somewhat-normal levels, according to the RE/MAX Fall Market Outlook Report. Given the Prince Edward Island government’s ability to flatten the curve quickly and efficiently, real estate prices in Charlottetown are expected to remain relatively stable over the next year.

While luxury real estate has seen a slight decline in the region, the recreational and main residential markets remain strong, currently experiencing an influx of off-island buyers as an emerging trend. This can be credited to buyer preferences shifting toward more spacious and affordable properties outside of urban centres, coupled with Charlottetown being classified as one of Canada’s safest places to live.

Based on these factors, it is expected that the Charlottetown housing market will see average housing prices increase 25% through the remainder of the year.

Atlantic Real Estate Market Trends

Other Atlantic Canada regions that reported low case counts of COVID-19, such as Halifax and Charlottetown, also experienced reduced market activity in March, however these Atlantic housing market declines were less pronounced than those experienced by some Ontario and Western Canada regions. Activity here returned to pre-COVID-19 levels by May 2020, and like many sellers’ markets in Canada, multiple offer scenarios continue to take place.

Canadian Housing Market Heat Map Fall 2020

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Canadian Housing Market Trends

Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.

Canadian Housing Market Data Table Fall 2020

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The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group. Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.

Canadians equally split on their confidence in the housing market

Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell. “The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”  Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:

  • 48% of Canadians would like to live closer to green spaces
  • 48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
  • 33% of Canadians would like more square footage in their home and have realized they need more space
  • 44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)

About the 2020 RE/MAX Fall Market Outlook Report The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments.

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Balanced market expected, prices to remain steady in 2020

RE/MAX is predicting balanced conditions and steady residential prices for the Charlottetown housing market in 2020. Charlottetown experienced a balanced housing market in 2019 as well. The cessation of the Provincial Nominee Program has helped correct the market and led to slower activity from foreign buyers. Housing affordability was a concern for first-time buyers in the region, with many getting pushed out of the downtown core.

First-time buyers and move-up buyers propelled the Charlottetown housing market in 2019. The top neighbourhoods for sales include West Royalty, Stonington and Primrose Point.

New housing developments and subdivisions should boost market activity in the region, with the East Royalty neighbourhood expected to see high demand in 2020.

Charlottetown housing market outlook reportFrom a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.

In Atlantic Canada, Halifax and Saint John have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single-detached homes. At the same time, the region’s condominium market is being driven by retirees. Conversely, the market in St. John’s is expected to recover in 2020, with increased consumer confidence expected to stabilize the market. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.

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