Market Update

Quick Real Estate Stats June 2019

Vancouver Island  Real Estate Activity June 2019

BCREA Hosing  Forecast Update, June 2019

Mortgage Rate Forecast Update, June 2019

Real Estate Market Changes June 2019

Updated July 30, 2019


2018 was a turning point in the real estate markets on the Island.  Demand was dropping, however, new listings were slow to recover, thereby not significantly increasing the inventory (active listings).   The result was continued upward pressure on price, albeit at a slower rate than 2017.

The second quarter of 2019 saw this trend take a turn.  While the rate of price increases has slowed, it is still 6% for the board area. However, the continued reduction in sales, down 21% over 12 months for VIREB (Vancouver Island Real Estate Board) area , has finally resulted in some increases in inventory (active listings).

The Board area inventory level has increased from 45.8% in March to 62.5% in June.  See Graph.  These recent increases in inventory have taken the pressure off pricing and the rate of price increases has dropped significantly.  Most markets are in the 3% to 7% range, down from the double digit range of 2016 and 2017.

My forecast in January that we would end the year in a 4-7% range appears optimistic and will likely be in the 2-4% range with some markets reaching a balance market position of 2%.  BCREA has revised its forecast to 1.1% for 2019, which would be a soft buyer's market.

In February 2019, BCREA has revised its forecast for single family home prices in 2019 for the VIREB area to 3.2% (up from 1.1%).  This forecast also projected a 2.1% in unit sales for the province.  In June it revised its forecast back to 1.1% for 2019.  It also revised the unit sales for the province to be down 9% compared to 2018.  See BCREA Housing Forecast.

Some changes in the Canadian economy and financial markets have reversed the mortgage rate increases and sub 3% mortgages are back.

Comparatively, the VIREB area remains a good option for retirees moving to the west coast with prices much lower than the mainland and Victoria. People coming from off the Island and retirees represent over half the sales in the board area.

Underwater picture of a school of salmon preparing to spawn up the Puntledge River near Courtenay.

Pink Salmon (Oncorhynchus gorbuscha) gather in a school to spawn in the Puntledge River, near Courtenay. 

Updates to the market are made as received here. I send out a quarterly newsletter which summarises these changes. To signup for the newsletter click the button above.

I also post blogs when new information is added, or there is pertinent news, receive these blogs by email click the button above.


Quick Real Estate Stats June 2019















The number of units sold has dropped significantly in most markets and while new listings  continues to lag, the inventory levels are starting to recover.  Comox Valley leads the way with a 51% increase in inventory bringing it up to 69% of the 2008-2014 average (was 47% in March). For the Board area inventory levels are 62.5% of the average (up from 45.8% in March).  The effect of low demand and increasing inventory is reducing price increases and pushing the markets toward a balanced market.

Real Estate Market Changes June 2019

Please note these comments relate to single family homes in markets covered by the Vancouver Island Real Estate Board (VIREB), which covers all of the Island from the Malahat north. The Victoria Board covers Victoria, all of the Saanich Peninsula and west to Port Renfrew and is not covered in these comments. Some comments on the provincial real estate market are also included from time to time. The quick stats above cover major Real Estate Markets in the VIREB area.

Snow covered trees and ground with blue sky on a Mountain in the Comox Valley

Beautiful winter scene in the Beaufort Mountains in the Comox Valley.

The 2018 slow down in demand due to the mortgage stress test continues in 2019.  The  second mortgage stress test, called B20  (for buyers with 20% or more down payment), introduced in January 2018, is having a more sustained impact.   BCREA notes in its March 2019 Mortgage Update the drag on the economy created by these stress test.  See Blog.

The continuing slow down in 2019 is leading to rising inventory levels and smaller price increases.  Looking at the 12 months to June 2019, compared to the previous 12 months, units sold is down between 14-26%.  Inventory is starting to recover in all markets and price increases are dropping.  In this graph, inventory for the Board area is 62.5% the average, up from 45.8% in March.

With exception of Port Alberni, which has a 15% price increase over the last 12 months, all other markets are in the 3% to 7% range.

The following new graph plots the monthly price with the previous year (i.e. June of 2019 compared to June of 2018) on the blue line.  Comparing this to the 12 month average for the VIREB area, orange line, a trend emerges.  As the unit sales in a month are low (compared to a 12 months period), you can see that the blue line jumps around quite a bit as it is not as statistically accurate.  For example, the month to month increase in January 2019 was 9% over June 2018.  Two months later it was 0% in March, and back up to 7% in April.  Prices just don't jump around that much in a month.  The dotted blue line, which is the 3 month average, helps smooth out these inconsistencies.  

When graphed over time and the 3 month average line stays above or below the 12 month average for a sustained period, it does suggest a trend.  In this case that further reductions to price increases are coming.

Unfortunately, the monthly unit sales in the subareas, such as the Comox Valley, are just too low (less than 100) to provide meaningful data.

 The sell/list ratio are approaching balanced market territory.  In June of 2018 the sell/list ratio was 73% for the Board area and ranged between 85% and 69% for the sub markets.  This June the Board area is at 56% and the range is 72% to 56%.  See chart for a market by market breakdown.

Usually 50-60% signals a balance market.  The sell/list ratio is the number of listings that have sold in a 12 month period.  A 60% ratio means that 60% of the listings sold and 40% did not sell.

See What are Balanced, Buyer's and Seller's Markets for an explanation on sell/list ratio.

Vancouver Island Real Estate Activity June 2019

The last quarter has seen several factors working together to further slow the markets further.  Unit sales of single family homes, continue to decline by 14% to 26%.  With new listings continuing to lag, the inventory levels are now coming up, 62.5% for the Board area in June (was 45.8% in March).  The sell/list ratio is falling in all markets and is 62% (down from 73% last year) for the Board area.  Campbell River has the highest at 72% (down from 85%).  A sell/list ratio of 50% to 60% usually indicates a balanced market, which the markets seem to be heading toward. 

These changes can be seen in the June 2019 Comparison.  New this month I have added the monthly changes for VIREB in the last line of this chart.  Normally I concentrate on the 12 month average rather than the monthly stats.  The number of sales in a month are lower which causes these numbers to be less reliable.  However, the 12 month average tends to lag behind market changes.  When these stats are graphed out over time this can indicate a trend even with less than reliable stats as seen in this VIREB Comparison Graph.  This suggests that there will be further reduction in the rate that prices are increasing thereby pushing us toward balanced markets - where price increase are consistent with inflation, around 2%.

Unfortunately, the number of sales a month in the sub-areas of VIREB are just to low (less than 100/month) to have accurate enough data to show similar trends. 

All markets remain in a seller's market position, though not as strong as 2018 and pushing toward balanced markets.  Other than Port Alberni, which is at 15%, the other markets are in the 3 to 7% price increase range with the Board area being at 6%.

While changes in new listings tend to be low, or negative, the continued reduction in sales is taking its toll and inventory levels are increasing.  For the Board area, new listings are down 7% while sales are down 21%.

Entire Board area: Soft seller’s market, last 12 months to June 2019, results are:
Read More


Cowichan Valley: Soft seller’s market, last 12 months to June 2019, results are:
Read More

Nanaimo: A soft seller’s market even though the sell/list ratio is 56%, which suggests a balanced market.  Inventory is still low for this market.  Last 12 months to June 2019 results are:
Read More

Parksville Qualicum: Pretty much a balanced market, last 12 months to June 2019, results are:
Read More

Port Alberni & West Coast:  Seller's market, last 12 months to June 2019, results are:
Read More
  • Sell/list ratio of 65%, was 81% last period.
  • Inventory level change up 37%.
  • Unit sales down 26%.
  • Average price is $365,576, representing a 15% increase over 12 months.

Comox Valley: Soft seller’s market, last 12 months to June 2019, results are:
Read More

Campbell River: Soft seller’s market, last 12 months to June 2019, results are:
Read More

North Island:  Soft seller’s market, last 12 months to June 2019, results are:
Read More

Note: Port Alberni and North Island have lower activity which can lead to stats being more volatile.

People meet on the Sheraton Greenway in Comox.

The Sheraton Greenway in Comox is one of the newly created walkways that abound throughout the Comox Valley

BCREA Hosing  Forecast Update, June 2019

A woman in yoga pose by the ocean at Kitty Coleman Beach campground in the Comox Valley.

A woman greets the early morning sun during a yoga pose at Kitty Coleman Beach campground.

BCREA's Housing Forecast, June 2019 revised its provincial February forecast of a 2.1% increase in units sales for 2019, to 9% reduction in sales for 2019, down to 71,400 units for the province.  This is down from their November forecast of 12% increase in unit sales for 2019 for the province. The new forecast compares to high of 103,768 residential sales in 2017 and 78,345 in 2018.  The 10-year average is 84,800 units, which the new 2019 forecast represents 15.8% below the average.  This change in forecast represents that the market is slowing faster than expected.

The report states: "The shock to affordability from restrictive mortgage policies, especially the B20 stress test (January 2018), will continue to limit housing demand in the province this year.  However, a relatively strong economy and favourable demographics are likely creating pent-up demand in the housing market.

In this report, for VIREB we had a 8.3% increase in single family home prices in 2018 (was 15% in 2017).  In November BCREA forecasted a 1.1% increase for single family homes in 2019 and revised that forecast to 3.2% in February.  Now in this forecast they are back to 1.1% for the year.  For June we are at a price increase of 6% over 12 months and there are indications this will fall further.

This spring saw an continuing slowing of the market, which for the first time has led to rises in inventory levels, resulting in reducing upward pressure in prices.  The Island markets are approaching a balanced market.

Highlights from the forecast for the VIREB market (Malahat northward) include:

  • The mortgage B20 stress test introduced in January 2018 continues to impact this market.
  • The forecast notes that retirees continue to be a strong park of this market, many of which are mortgage free and not subjected to the mortgage stress test.  However, I have noticed a sharp increase in the number of rancher homes on the market, the homes retirees tend to prefer.  Looking at VIREB's 2018 buyer survey, the number of people buying for retirement has not decreased.  It appears buyers are reluctant to pay the premium for rancher type homes.
  • Millennials continue to be an increasing source of buyers due to positive economic growth on the Island and relatively lower home prices compared to the mainland. 
  • The forecast mentions that while supply (inventory) of homes for sale is on the rise, it is still at historical lows.  Which is correct, however the increase in inventory is starting to reduce the upward pressure on price moving some markets toward a balanced market.
  • BCREA June's forecast is for a 1.1% increase in price for 2019 for the VIREB area.  This would put us in a soft buyers market.  In the past BCREA has been low in its projections for this area largely due to not recognising the low inventory levels.  Given what I have seen in the last few months, I am inclined to agree with them this time, though I think we will see the year end at the 2-3% price increase level.

Economic growth in BC slowed more than expected in 2018, expanding at 2.5% rather than 2.8% and the slower trend is forecasted to continue in 2019 with 2.2% growth.  An uptick of 2.7% is forecasted for 2020.  BCREA concludes with a positive outlook for 2020 stating: "Clearly there are headwinds facing the BC economy over the next five years.  Still, the province's long term prospects remain strong.  Favourable demographics, strong population growth and an accelerating job market mean that the economy, after a brief slowdown this year, should regain momentum in 2020 and beyond."  Their forecast for 2020 2.7% growth in GDP.

Comparatively, the national economy is expected expand 1.0% to 1.5% with the risks tilted to the downside.  "The US continues to flirt with disaster by engaging in trade wars with China and Mexico.  Those actions have the potential to seriously disrupt the global economy and at worst, tip the US into recession."

The rise in mortgage rates experienced in late 2018 and early 2019 have largely reversed.  See Mortgage Forecast below.

More details include:

Read More

Mortgage Rate Forecast Update, June 2019

BCREA Mortgage Rate Forecast Update for June 2019 reports the continued reversal from past activity of rate increases. From the summer of 2017 to October 2018 the Bank of Canada (BOC) raised its overnight rate 5 times to 1.75%. During that time BCREA was forecasting additional increases as the bank strives to bring rates to its estimated neutral level of between 2.5-3.5%.

"The big news in the Canadian mortgage market is the return to sub 3 per cent five-year mortgage rates.  The last year of mortgage rate increases has essentially been erased by an acute repricing of bond market expectations.  A slowing Canadian economy and rising global trade tensions triggered a sudden change in bond market sentiment late last year, pushing further Bank of Canada rate increases off the table." (emphasis added)

Despite the reduction of mortgage rates the banks five year posted rate remains at 5.34% while BCREA feels it should be at 4.84%.  This lack of recognition in how bond yields and mortgage rates have reduced are not reflected in the posted rate.  Which means there is no relief for the mortgage stress test as people must qualify at 2% above their mortgage rate or the posted rate, whichever is higher.  I don't understand why the banks are doing this, perhaps it is at the bidding of the government.  The end result is pushing buyers out of the housing market.

The national economy and inflation are sending mixed signals.  While economic growth struggled during the first quarter, Canadian consumer spending is posting the strongest growth in two years.  BCREA forecasts that the Canadian economy will expand by 1.0-1.5%, down from 1.8% last year.  Combined with global uncertainty and the impact of the B20 stress test should results in the Bank of Canada refraining from further rates increases.

Financial markets are concerned with this scenario with both Canadian and US bonds yield inverting, which led to lower mortgage rate.  This suggests both countries should reverse their course on monetary police and lower rates.

One the other hand, both the bank and federal government are set on bending household dept-to-income curve and lowering rates would lead to more spending.  Lastly, inflation is above the 2% target suggesting a tightening of rates.

The table below has the forecasted mortgage rates from the forecast through to the end of 2020.

 Mortgage rates are influenced by two things:

  • The Bank of Canada's overnight rate affects variable mortgages and shorter term fixed mortgages (1 to 3 years and in some cases 4 year).
  • The bond rates tend to affect longer term fixed mortgages, typically 5 years and up.
A note on advertised rates 
Read More
Man sitting on the boardwalk with woman in a wheel chair in Paradise Meadows.

An enjoyable outing on a boardwalk in Paradise Meadows near Mt. Washington.


What was, What is, What will be, What to do

Forecasting by its very nature is not an exact science. Obviously, we can let you know what has happened in the past and what the current situation is today. What will happen in the future can be a difficult thing to predict, hence why most forecasts are updated quarterly. Also, local situations need to be considered. For 2018 we saw dramatic differences here on the Island than on the mainland.  On the Island we remained in a seller's market while much of the mainland moved to balanced markets, some with minor price reductions.  For 2019 we appear to be moving toward balanced markets here on the Island. Over the last four years the BC economy has out performed the Canadian economy.   

Government changes late in 2016 and 2017 had a strong effect in the lower mainland and little effect here on the Island.  The new mortgage stress test, which took effect January 1, 2018, plus rising interest rates, reduced demand in 2018.  Though had less impact here on the Island at the time, in 2019 we are seeing this impact with slowing markets.

Buying and selling real estate are major financial transactions the net impact of which is difficult to predict over the long term. It is advisable to closely examine your other reasons for making a change. It might be easier to focus on what is happening in your life rather than trying to predict what will happen in the world. And leave yourself some room in case things don’t go as anticipated. Ask yourself some “what if” questions. A conservative approach, some good soul searching, and research could possibly save you some stress down the road.

Ariel view of Courtenay with the Comox Harbour.

Ariel view of Courtenay with the Puntledge River flowing into the Comox bay.

Tip: Planning for things that do not happen is better than not planning for things that do happen.

What are Balance, Buyer's and Seller's Markets?

Water Buffalo in a Comox Valley field.

Water Buffalo (Bubalus bubalis) are a new addition on the Comox Valley agricultural scene.

For economists and analysts a balanced market is when the supply (listings) of housing and the demand (sales) are in equilibrium. In other words the supply and demand are such that there is not any real pressures on price, up or down, compared to inflation. Home price increases are keeping pace with inflation (around 2%).

Buyer’s market
Read More


Seller’s market
Read More


To predict and measure supply and demand in the market we use a sell/list indicator. This measures the number of homes that were listed in a year and compares how many of them sell. A sell/list ratio of 55% means that in a year 55% of the homes that were listed actually sold and 45% did not sell. A sell/list ratio between 50-60% usually results in a balanced market, below this is a buyer's market and above this is a seller's market. Please note that this is an indicator and sometimes markets don’t respond as predicted. What actually happens with price is the true test of the market's status, the sell/list indicator just helps us predict what is likely to happen.

The graph below looks at the number of units listed, the number of units sold, and the sell/list ratio. The left side plots the number of units and the right side plots the sell/list ratio as a percentage. The graph is for the years of 2000 to 2018.

Line graph showing homes sold and listed and buyer's and seller's market.

This next graph compares the sell/list ratio to what actually occurred with prices. The left side plots the average home price (orange line) and the right is the sell/list ratio as a percentage (blue line). Again, it is for 2000 to 2018. It is a measure of how effective the sell/list ratio was at predicting changes in price. For the most part, it demonstrates that the sell/list ratio is a pretty good indicator. Only in 2009 did pricing and the ratio not react according to prediction. This is important as it demonstrates that supply and demand are only one component of the housing market. Sudden shifts in the economy or market confidence can have strong influences on the market. For the most part, the sell/list ratio is a good indicator on the pulse of the market.

Graph showing average home price increases and buyer's and seller's market.

GERRY, has a way of making the whole transaction experience pleasant and positive.  His incredible knowledge and attention to detail instils confidence in him as a highest-rated Real Estate professional. See Client Feedback for more client comments.

     About Gerry                                         Service and Integrity Above All

Information and Interpretation
Selling or buying real estate is a major financial endeavour with many factors to consider. While you have a wealth of information available to you on the internet, interpreting that information is another matter.

This is where I come in. Not only do I research and provide you the information you need, I take it to the next level and analyze and interpret that  information for you. I will tell you what I think, what we do is up to you.

As a client, your Realtor works for you, and this is a principle I hold dear.  I see my job as providing you with information, interpretation, services and guidance, not to push you on a course of action.

Unparalleled Service
I have a simple code, I don't sell, I service. I assume my clients are perfectly able to make their own decision once they have the information they need. I spend my time providing information, guiding people through the process, and making sure all the bases are covered, not in high pressure sales.

Over the years I have received very complementary feedback from clients. See Client Feedback.

Integrity, simply defined, is being honest and fair. This is further enhanced by one of a Realtor's prime duties, which is not to put anyone's interest above their clients, including their own.  This a duty I take very seriously. My personal outlook after over 30 years in business, is that whenever I experience high pressure sales I start to question the integrity of the person selling me.  Are they looking after my best interest or theirs?

The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. The trademarks REALTOR®, REALTORS® Realtor and the REALTOR® logo are controlled by CREA and identify real estate professionals who are members of CREA.

Blue illustration of Gerry Chwelos, Realtor, Pemberton Holmes.

Gerry Chwelos, REALTOR®


Tel: 250-8975465

All images on this website are copyright protected. Most photos provided by Boomer Jerritt.

Copyright © Gerry Chwelos 2017