As house prices skyrocket in Greater Vancouver, the real estate industry in Port Alberni is feeling some effects as folks choose to flee Canada’s most expensive city for housing and head to the Island for more affordable properties.
“We’re feeling the effects from Vancouver. People are cashing in,” said Dave Koszegi, Port Alberni realtor. He said people will often come from the mainland to seek properties in Victoria which in turn will cause an increase to those homes, and so folks will pursue other areas on the Island with comparable climates and value.
Port Alberni offers some of the cheapest real estate listings on Vancouver Island with an average house price of about $215,000. According to Koszegi, Port Alberni listings are generally $100,000 lower than homes in communities over the hump like Nanaimo and Qualicum Beach.
According to the Real Estate Board of Greater Vancouver, the price of a detached home in Metro Vancouver rose 36.9 per cent since May 2015 to $1,513,800. The benchmark price of an apartment property increased 22.3 per cent from May 2015 to $485,000.
On a home sold at $200,000, monthly mortgage payments, at three per cent, would cost home-buyers about $946. A typical price for a Vancouver home of $1,700,000, would cost home buyers $7,642 a month at a three per cent mortgage rate.
The Vancouver Island Real Estate Board states that in May of 2016, the benchmark price of a single-family home in the Comox Valley was $360,400, up 11.32 per cent from 2015. Duncan saw an increase of 6.71 per cent to $317,300 over the same month in 2015. Nanaimo’s rose 10.82 per cent to $389,800 while the Parksville-Qualicum area saw its benchmark price rise by 14.31 per cent to $417,900.
The price for a benchmark home in Port Alberni was $197,300, unchanged from one year ago.
Koszegi said the last time he saw a peak price for homes in the Valley was in 2008 at $268,000.
This will be the third time in Koszegi’s 23 years in the business that house prices have gone up in the Valley, which he said can be attributed to a lack of inventory.
When there’s a lack of inventory home owners can ask more for their homes when selling, Koszegi said.
Holding up a pad of paper scribbled full of interested home buyers who want to invest in the Alberni Valley, Koszegi said there are certain price segments that are missing from Port Alberni’s real estate market—therefore people may have to wait to find a home here in their price range.
“Definitely you’re hearing about the inventory shortage but it’s not a real shortage, we’re not out yet,” Koszegi said.
Prices of homes in the Valley fluctuate depending on the area. The most expensive home on the market right now, Koszegi says, is a Sproat Lake property listed at $3.2 million.
“If is was in West Vancouver it might be 10 million dollars,” he said.
Chris Fenton, who’s been selling real estate in Port Alberni for 13 years, says he’s noticing a trend of people moving to the Valley from all over Canada, as a retirement destination.
“One of the things that’s a really high demand and a low supply is sort of the semi-rural small acreages. A lot of people want that lifestyle,” Fenton said.
He said right now there aren’t many listings on the market and that houses are selling very quickly.
“Our inventory is the lowest that I’ve seen it in probably six or seven years so there’s far less listings coming on the market then in the past.”
Traditionally, Fenton said house prices will sort of decrease for a five to seven year period and then they will increase for the same amount of time. He said right now prices are going up from a downward trend.
The Valley’s home prices are low, but rising, and such a trend is attracting buyers’ attention, Fenton said.
“I answered two calls today, one was from Nanaimo and the other was from Vancouver who are coming later this week to look at properties as investments,” he said. “I think it’s an excellent place to invest right now with prices being so low.”
A lot of what attracts home buyers to Port Alberni, Fenton says, is of course the low prices, but also the outdoor recreational opportunities available in the Valley.
“A lot of people can buy a house with a lot smaller mortgage or sell a house in Vancouver and come here with extra cash so they can live a bit better of a lifestyle with extra disposable income,” Fenton said.