The price of an average single-family house in the Cowichan Valley in August dipped 2.9 per cent from July.
According to a report by the Vancouver Island Real Estate Board, the cost of an average home in the region was approximately $853,600 in August, slightly less than in July when it was $879,300.
But that’s still significantly more than what prices were five years ago, when the average cost of a single- family home in the area was $443,700, or even three years ago when it was $511,100.
The recently released VIREB report stated that the main reasons for the slight decrease in prices, which were also seen in most other regions on Vancouver Island except for the North Island, from July to August is that the housing inventory is up while sales are down.
The Bank of Canada raised its key interest rate by a full percentage point in July, pushing up borrowing rates linked to mortgages, and that has helped put a damper on the housing market across the country, and further increases are expected this year as the central bank tries to manage inflation.
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Susan Perry, a realtor with Royal LePage who represents VIREB in the Cowichan Valley, said there’s a transition underway in the housing markets in the Valley, and across much of Vancouver Island.
She said buyers and sellers had been dealing with low interest rates and low housing inventory for some time, which saw many buyers who could borrow cheaply competing for a limited amount of available homes and driving up their prices.
But now, Perry said, interest rates are rising and the number of available housing units are increasing, which is causing a decrease in sales and prices.
In August, 2021, there were just 131 active listings for homes in the Cowichan Valley, while last month there were 323 active listings.
The report said that last month, active listings of single-family detached properties on the Island jumped to 1,368, a 153 per cent increase from last August.
As well, VIREB’s inventory of condo apartments hit 332 last month, up from 164 listings one year ago, and there were 280 townhouses for sale in August compared to 109 one year ago.
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Perry said she has no crystal ball to see if the current trends in the housing markets on Vancouver Island will continue.
“But I think we’ll be in this position for a little longer,” she said.
“We’ll have to see what happens in the world. People are trying to hold off on major purchases because they’re being told that a financial crash is coming, but who can say for sure?”
The price of an average townhouse in the Cowichan Valley also went down slightly in August compared to July.
Last month, townhouses were going for $594,300 compared to $597,200 in July, which is a 0.5 per cent dip in price.
The price of a condo stayed pretty much the same over the same time period in the Valley, just dropping from $359,700 to $359,600.
The report said the quieter August gave consumers and realtors time to catch their breath after the frenetic pace VIREB’s housing market has been setting since 2020.
It said that additional inventory is good news for buyers, giving them more options to choose from and easing the pressure to move too quickly when making an offer; but on the other side of the transaction, sellers may have to adjust their expectations somewhat.
“After months of historically low listings, January posted a small inventory bump, and active listings have risen steadily since then accompanied by slightly lower demand,” says Erica Kavanaugh, VIREB’s chair.
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“What we’re seeing now is more about conditions returning to what they were before the pandemic. We’ll have to see how the rest of the year shapes up to determine whether we’re looking at a more significant trend.”
Kavanaugh added that while demand has dipped, the underlying supply issues that caused low inventory and rising prices still exist.
“The British Columbia Real Estate Association crunched the numbers and determined that it will take a substantial decline in demand to return active listings to a healthy state on Vancouver Island,” she said.
“Province-wide, we’re dealing with decades of insufficient supply, and that’s not a quick fix.”
robert.barron@cowichanvalleycitizen.com
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