Market Update

BCREA Hosing  Forecast Update, June 2020

Mortgage Rate Forecast Update, June 2020

Quick Real Estate Stats June 2020

Vancouver Island  Real Estate Activity June 2020

Real Estate Market Changes April 2020


Updated July 12, 2020

It is too soon to forecast the potential impact on the real estate market due to COVID-19 and the economic slowdown.  In my April Newsletter I review what we know to date and outline the factors I will be watching that may affect the market.

June saw a recovery in terms of sales and new listings, see first graph to the left.  For the VIREB (Vancouver Island Real Estate Board) area, June had a 18% increase in sales compared to June of 2019.  While new listings were up from April and May, they remain 14% lower than June 2019.

This lead to inventory levels dropping to 40% from 53% in June compared to June 2019.  Low inventory levels have an upward pressure on price, see second graph on right.

What long term effect COVID-19 will have on inventory levels is uncertain at this point.  For June, buyers were clearly more comfortable buying than sellers were listing their property.  This could be due to pent up demand, however as long as inventory levels remain low there will be upward pressure on prices.

Most markets here on the Island remain in a seller's market with Nanaimo approaching a balanced market. 

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 sign up for the newsletter, click the button above.

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Quick Real Estate Stats June 2020















June saw a recovery of new listing and sales from March and April.  For June the Board area sales were up 18% and while new listings were down 14% over June 2019, this is an improvement compared to April (down 47%) and May (down 40%).  Over the last 12 months all markets are showing price increase in the 3-7% range except Nanaimo at 1% and the North Island at 13%.  See table below.

Real Estate Market Changes June 2020

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.


COVID-19 and the resulting recession has obviously moved the markets into uncharted waters.  At this point the long term effect is not certain.  BCREA has revised its price increase for the VIREB area to 3.4% for 2020, down from their previous forecast of 3.8% increase.  While they forecast a 20% reduction in sales for 2020, in their June 2020 Housing Forecast they note we were under-supplied in the VIREB area prior to the pandemic saying "The impact of the current pandemic and associated recession on prices is largely determined by the reaction of supply."

It should be noted that this forecast is based on a strong economic recovery in the last half of 2020.  A muted recovery and or a second wave will likely change matters.  Plus, in their July snapshot on the economy the Federal government revealed no plans to support economic recovery.  Further, the question about students returning to school full time in September is also unanswered which could severely restrict parents ability to get back to work full time.

June saw a dramatic increase in sales,18% higher than June of 2019.  New listings, while they did recover from April and May's levels, were still 14% lower than June of 2019.  This has resulted in a further lowering of inventory and increased pressure on price, see next section for more information.

To date I am not seeing a reduction in prices due to the slow down associated with COVID-19.  This is likely due to our low inventory levels, which were 40% of average, down from 53% for June of 2019.

With new listing recovery lagging behind sales we are seeing an increase in the sales/list ratio over the last year for all markets except Campbell River.  While it appeared that markets were approaching balanced markets, this trend appears to be reversed for now with all markets remaining in a seller's market except Nanaimo which has only a 1% price increase over the last 12 months.  For the other markets, the sell/list ration is in the 60-74% range.  See next section for individual market numbers.

Usually 50-60% sell/list ratio signals a balance market.  The sell/list ratio compares the number of new MLS® listings to those that have sold in a 12 month period.  A 60% ratio means that sales were 60% of the new listings and 40% did not sell.  Either expired, were cancelled or are still on the market.

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

Vancouver Island Real Estate Activity June 2020

June 2020 is showing some recovery in activity since the COVID slow down as is seen by the first graph on the right.  For the VIREB area listings were up compared April and May, but still 14% lower than June of 2019.  On the other hand, sales were up 18% compared to June 2019 due to pent up demand.

This sharp disparity between the recovery of new listings and sales has lowered inventory levels to 40% from our already low level of 53% thus placing upward pressure on prices, as is indicated in the second graph on the right.

The big questions in terms of what will happen with prices is will this demand continue and most importantly, will the listings come back.  At this point, sellers are showing more reluctance to list than buyers are to buy.  As long as our inventory levels remain low, there will be upward pressure on prices.

The sell/list ratio has increased in all markets since December, which is to be expected when sells are this strong and new listings are lagging.  The Comox Valley has the highest ratio of 74% over the last 12 months.  This means that 74% of the listings have sold over this period.The Board area posted a sell/list ratio of 65%. A sell/list ratio of 50% to 60% usually indicates a balanced market.

All markets are showing a reduction in inventory compared to June 2019 between 19-37% except Campbell River which was only down 1%.  Changes for all markets can be seen in the June Comparison Chart. 

All markets are in a seller's market position, though not as strong as the previous 12 months.  The exemption is Nanaimo which posted a 1% increase in price over 12 months, but was slightly down from March's average.  Other markets have single digit price increase in the 3-7% range with the North Island being the exception at a 13% increase in price. The Board area as a whole posted a 5% increase in price.  Following is a summary of each market, see table for more details for single family homes.

Entire Board area: Seller’s market, last 12 months to June 2020, results are:
Read More

Cowichan Valley: Seller’s market, last 12 months to June 2020, results are:
Read More

Nanaimo: Close to a balanced market, last 12 months to June 2020 results are:
Read More

Parksville Qualicum: Soft buyer's market, last 12 months to June 2020 results are:
Read More

Port Alberni & West Coast:  Seller's market, last 12 months to June 2020, results are:
Read More

Comox Valley: Seller’s market, last 12 months to June 2020, results are:
Read More

Campbell River: Seller’s market, last 12 months to June 2020, results are:
Read More

North Island:  Seller’s market, last 12 months to June 2020, 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 walkways that abound throughout the Comox Valley

BCREA Hosing  Forecast Update, June 2020

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 Update - June 2020 BCREA reports:  "With much of the economy at a standstill, and households and the real estate sector adhering to social distancing, activity in the housing market has slowed dramatically.  Sales in the early spring fell to unprecedented lows and we anticipate that sales will remain below normal through the summer months."

Provincially, they are forecasting that MLS® sales will fall 21.3% for 2020 to 60,885.  For 2021 sales are forecasted to rebound to 88,490 units, a 45.3% increase over 2020, but really just a little above the long run average of 85,000.

For pricing, they note that the effect on prices is largely determined by the reaction of supply.  "If the inventory of listings accumulates significantly, and particularly if that inventory represents foreclosures or motivated selling by those impacted by rising unemployment, prices will be more severely impacted."  However, due to health reasons, the supply of listings has dropped dramatically and as we recover the supply of listings is expected to be lower than in a normal recession, thereby having little negative effect on pricing.

For the VIREB market, the report notes that the Vancouver Island market was under-supplied prior to the COVID-19 pandemic slowed new listing activity further.  They are forecasting that home sales for single family detached homes will decline 19.8% for 2020 to 4,000 units and then recover by 45%, up to 5,800 units, for 2021.  This is up from 2019's 4,985 single family homes sold.

For all types of properties the forecasted to be -20.4% for 2020, to 6,000 units and 40% increase for 2021 to 8,400 units.  In 2019 sales for all types of properties was 7,539.

They have revised the forecasted price increase for single family homes to be 3.4% for 2020, down from 3.8% previously forecasted.

For the BC economy, the June forecast states:  "For the first time in over a decade, the BC economy is in a recession.  This recession is unprecedented in that it did not evolve due to collective poor business decisions, rapidly rising interest rates, bad loans, or misadventures in financial engineering.  Rather, the economy has been purposely halted for the greater good."  BCREA reports the following on the BC economy:

  • Real GDP Growth:  Forecasted to be -6.3% for 2020 (previously forecasted to be 2.4%) and 3.6% for 2021.

  • Retail Sales Growth:  Forecasted for -11.5% in 2020 and 4% in 2021.

  • Employment:  Grew by 43,300 jobs in May (2% increase over April).  Though unemployment increased by 1.9% to 13.4% due to more people seeking work.  The vast majority of job increases were in the service sector with the reopening of the economy.  For Canada, most of the new jobs were in construction and manufacturing, see Employment Blog.

Mortgage Rate Forecast Update, June 2020

BCREA Mortgage Rate Forecast Update for June 2020, highlights include:

  • Mortgage rates fall to record low.

  • Canadian economy in recession, but is a recovery on the horizon?

  • Bank of Canada hits its effective lower bound…again.

The forecast opens with; “The second quarter of 2020 will perhaps prove to be one of the most turbulent periods in Canadian economic history.  The frightening spread of the COVID-19 pandemic and the subsequent shutdown of the economy have produced some truly startling economic data.  As for Canadian mortgage rates, once-rising risk spreads have been quelled by swift and overwhelming action by the Bank of Canada (BOC) to inject liquidity into the financial system.

The BOC supported the financial system by lowering its overnight lending rates several times to 0.25%.  In addition, along with CMHC, purchased billions in mortgage-backed securities, helping to reverse rising mortgage rates.  The average 5-year fixed discounted rate is at a record low of 2.49%.  Given the economic outlook, BCREA believes it will be some time before we see much movement in mortgage rates.

Not everything the government has done is helpful to the housing market.  Firstly, in the beginning of the pandemic they put on hold planned changes to the stress test.  The current test requires people to qualify at the bank posted rate (4.94%) while the change would allow people to qualify at the 5-year fixed discounted rate plus 2%, which would be 4.49%, almost half a percentage lower.  The discount rate is much more reflective of market mortgage rates than the bank posted rate and would better allow buyers to take advantage of market rate changes.

Secondly; “Even more perplexing, CMHC decided to tighten mortgage credit in the middle of a historically deep recession, lowering the maximum gross and total debt service ratios, increasing minimum credit scores and banning some sources of non-traditional down payments for insured borrowers.” BCREA noted.  This has reduced the mortgage amount available to insured borrowers (with less than 20% down) by over 10%.  See Blog for more information.  The two private mortgage insurers, Genworth and Canada Guaranty have not followed suit with this credit tightening.

Canadian Economic Outlook:  Due to the shut down of the economy, impacts and forecasted results by BCREA include:

  • A first quarter 8.2% contraction in the Canadian economy at an annualized rate.  March saw a 7.2% contraction.

  • Second quarter is expected to contract by 40+%, annualized.

  • Real GDP is forecasted to be down 10-15%, peak-to-trough, before starting to normalize in the fourth quarter.

  • Even with a strong second half recovery, 2020 likely will see a 7% contraction in real GDP.  Full GDP recovery back to the trend will likely not be achieved by the end of 2022 (see graph).

  • 2020 will likely end with double digit unemployment.

  • Household spending recorded the steepest drop ever, 2.3% down.

  • Exports fell 3%.

  • Household investment was down 0.1% while new construction rose 1.6%.

Positive signs of recovery are emerging as of May, with a surprising turnaround in the labour market, solid new home construction and an uptick in consumer spending.” Reported BCREA.  The forecast is optimistic about 2021 “as pent-up demand, rock bottom interest rates, and, crucially, a successful vaccine help to push real GDP growth to 4%” concludes BCREA.

 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.

This 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). It is for 2000 to 2019. 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 2009/10 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 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

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