PNP changes already 'flattening' Island house prices: Real Estate Association

The P.E.I. Real Estate Association says changes to the Provincial Nominee Program are already having an impact on the Island's housing market.

A month after the province announced it was scrapping the immigrant entrepreneur stream of PNP, the associationsays the steady rise in house prices P.E.I.has seen over the past couple of years appearto be slowing.

"Some of the pricing is flattening a bit," said Greg Lipton, the association's president. "I don't think you're going to see a lot of the really higher priced houses moving quickly. I think [buyers] are now being a little more reserved because they have to think about what's going to happen in the next two or three years."

Entrepreneur stream 'accelerated' market

Thecontroversialentrepreneur stream granted applicantspermanent residency upon arrival on P.E.I, in exchange for a $200,000 deposit and a promise to start up or buy a business here.

Lipton says while the majority who came through the entrepreneur streamultimately lost their deposit and left the Island, many still bought houses here.

"There are vacant houses out there that people just aren't living in.They were specifically bought for the point of 'okay, we need to have a residence on P.E.I.Here's our residenceon P.E.I.'," said Lipton.

Charlottetown realtor Jie Hu says 90 per centof her business over the past few yearshas come from immigrants who arrived through the entrepreneur stream, most of them from China.

Now, newcomers may focus on middle to lower priced properties- JieHu, Charlottetown realtor

She says the stream"definitely accelerated" P.E.I.'sresidential and commercial real-estate markets and her own sales figures.

"We did have quite a few clients that purchased high price real estate properties," said Hu. "In China, they only had an apartment or condo. But when they came to P.E.I., they found single family homes that are so affordable, and so lovely.So they say, why not buy a house?"

'We'll still have strong demand'

But Hudoesn't expect business to slow down all that much, nowthe province has stopped accepting applications into theentrepreneur stream.

There are still more than 400 applicants who got in ahead of the change to the PNP,who are now being vetted and may wind upon P.E.I.

Buyers are going to be more reserved- Greg Lipton, president, P.E.I. Real Estate Association

There are also other PNPstreams and new federal programs aimed at attracting skilled workers and entrepreneurs to the Island. They just don't offer permanent residency upon arrival.

"I think we'll still have strong demand," Hu said."It's just now, newcomersmay focus on the middleto lower price properties."

"We'regoing to see workers from other countries come here with maybe not as much money in their back pocket. Buyers are going to be more reserved," added Lipton."You'll see that anywhere between $225,000-$350,000is the primary area for those purchasers. And I don't think it's going to go much higher."

Lipton says the sharp rise in home prices over the past couple of years has actually discouraged many Islanders from selling their homes, as they worried they wouldn'tbe able to afford to buy another one.

He expects with prices levelling off, that may encourage more to list, which will increasethesupply of homes currently on the market.

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