The real estate market in Prince Edward Island (PEI) has experienced a blend of obstacles and opportunities for both expansion and recuperation. As national home sales find stability, the influence of rising interest rates and uncertainty appears to be diminishing. PEI’s housing market is anticipated to undergo minimal changes in the coming years, with consistent home prices and moderate growth. Let’s explore the current market trends and predictions for the future of PEI’s real estate landscape.
STEADYING THE SHIP: HOME SALES & PRICING
PEI’s home sales have remained fairly stable since the summer, indicating that the market has adapted to the impact of increasing interest rates and heightened uncertainty. Home prices across Canada exhibit a mixed pattern, with prices in more expensive markets like Ontario and British Columbia cooling down due to higher borrowing costs. In contrast, prices in Alberta, Saskatchewan, and Newfoundland and Labrador have demonstrated more resilience, with Quebec and the Maritime provinces, including Prince Edward Island, falling in between.
The real estate market in PEI is projected to experience only a minor change this year, with a marginal 0.3% decrease. Importantly, average home prices in PEI rose by 13%, from $388,218 to $401,040, between 2022 and 2023. The forecast for 2024 anticipates a further increase to $410,119, representing a 2.3% growth from 2023 to 2024. These figures suggest that home prices in PEI are likely to maintain relative stability through 2024. 2.3% growth is more in line with pre-covid housing price increases here on the island.
THE DAWN OF A NEW ERA
Although prices in the majority of markets have pulled back from their record highs in early 2022, they still exceed the levels observed in summer 2020. The ripple effects of the Bank of Canada’s actions to tackle inflation are diminishing, and the uncertainty related to the housing market’s direction and borrowing expenses is projected to lessen in the upcoming months. As a result, the emphasis of the 2023 forecast transitions from recuperation to the beginning of a fresh phase.
CHALLENGES FOR FIRST TIME BUYERS & MARKET ENTRY
Entering the housing market may continue to pose difficulties for many first-time buyers until mortgage rates decline. However, some buyers are predicted to re-enter the market once they gain more confidence in rates reaching their peak. For others, 2023 may present the first opportunity in some time to avoid competition with multiple offers.
PROJECTIONS FOR 2023 & 2024
In 2023, it is estimated that around 495,858 properties will be sold via Canadian MLS® Systems, representing a 0.5% reduction compared to 2022. The national average home price is predicted to drop by 5.9% to $662,103 in 2023. It’s essential to emphasize that this decrease has already occurred during 2022, but the extraordinary beginning of that year will be reflected as a decline in 2023, as prices aren’t expected to reach those record heights once more.
National home sales are expected to increase by 10.2% to 546,625 units in 2024 as markets resume normalcy. This number would still fall short of the 2020 and 2021 figures. The national average home price is forecast to recover moderately by 3.5% from 2023 to 2024, reaching around $685,056, which is lower than 2022 but comparable to 2021 levels. We should still compare this with Prince Edward Island housing prices that are only expected to reach $410,000. PEI real estate still appears to represent a significant value as compared to other provinces.
CONCLUSIONS:
Prince Edward Island’s real estate market has faced challenges but is now displaying signs of stability and moderate growth in the coming years. As home prices remain steady and the market adjusts to external factors, buyers and sellers should stay informed and be prepared for the evolving environment. Consult with a local REALTOR® for guidance and advice on navigating the PEI real estate market.
Stats as published by the Canadian Real Estate Association
NICOLLE MORRISON
I am Nicolle Morrison, co-owner and broker at Century21 Northumberland Realty and leader of “the Power Team”, a group of realtors dedicated to both local and international clients. You can contact me at 902-888-7237 or nicolle@century21pei.com