House prices on Prince Edward Island continue steady climb

Residential real estate prices on Prince Edward Island continue to climb at a ratehigher than the national average, according to the latest report from a national organization.

The Canadian Real Estate Association released monthly figures for November 2020 on Tuesday.

They show that the average price for a resale home on P.E.I. is about 21 per cent higher than it was a year earlier.

Only Quebec had a bigger year-over-year increase, at about 23 per cent. Overall across Canada, prices were up 13.8 per cent year over year in the ninth month of the COVID-19 pandemic.

"For the fifth straight month, year-over-year sales activity was up in almost all Canadian housing markets compared to the same month in 2019," the report noted.

"Meanwhile, an ongoing shortage of supply of homes available for purchase across most of Ontario, Quebec and the Maritime provinces means sellers there hold the upper hand in sales negotiations."

That lack of houses coming onto the market compared to the demand means that in those provinces, there is "increased competition among buyers for listings and fertile ground for price gains."

There have been anecdotal reports for months that Prince Edward Island's low rate of COVID-19 infection and looser rules around social activities have been encouraging people to buy homes on the Island.

Commenting on the CREAreport Tuesday, a senior economist with BMO said that prices for rural and vacation properties across the country might stabilize or even decline slightly starting late next year.

Robert Kavcic said the housing market should remain healthy overall, but "it remains to be seen how the ravenous acquiring of rural/vacation properties plays out later in 2021 and into 2022, assuming the [COVID-19] vaccine is effective. It would be reasonable to expect those markets to plateau or even give back some (but not nearly all) of the recent price gains."

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