How Charlottetown Has Become One of the Hottest Housing Markets in Canada

Source – cbc.ca

“…House prices in Charlottetown rose 38.5 per cent over the last three years, one of the fastest rates in the country, according to the Canadian Real Estate Association. That’s faster than Victoria (33.3 per cent), Vancouver (10.93 per cent), Toronto (25.3 per cent) and Montreal (17.7 per cent)”

How Charlottetown has become one of the hottest housing markets in Canada

The number of new homes being built in Charlottetown is a factor in the increase in average prices. (John Robertson/CBC)

House prices in Charlottetown rose 38.5 per cent over the last three years, one of the fastest rates in the country, according to the Canadian Real Estate Association.

That’s faster than Victoria (33.3 per cent), Vancouver (10.93 per cent), Toronto (25.3 per cent) and Montreal (17.7 per cent). In Calgary, Edmonton, Regina and Saskatoon, house prices fell.

The average house price in Charlottetown rose from $200,000 to $277,000. Of the areas commonly tracked by CREA, only the Niagara Region and Vancouver Island saw higher percentage price increases.

“They came with a lot of money and they wanted something new, and we didn’t really have a lot of new stuff at that time,” said Lipton.

“New construction is very expensive. We’re up to close to $200 per square foot nowadays to get anything built.”

High immigration rates

P.E.I. has been one of the fastest-growing provinces population wise, and immigration has been a big part of that .

From 2010 to 2018 more than 12,000 immigrants came to the Island. But at the same time, P.E.I. has the worst five-year immigrant retention rate of any of the provinces.

When those immigrants leave, said Lipton, they are looking to get a return on their housing investment, so the price of that house goes up a little more.

New uses for houses

But immigration is not the only driver of house prices.

Vacation rental services, such as Airbnb and VRBO, have also been a factor, as property owners have figured out they can get $200 a night for a unit instead of $1,000 a month on a one-year lease.

“Airbnb is something that we were very unprepared for,” said Lipton.

The possibility of higher return has led to an interest in purchasing more properties to convert to vacation rentals.

“The duplex all of a sudden turns into, well, it’s going to be a triplex. And the triplex is all single bedrooms with a shared kitchen and a shared bathroom,” said Lipton.

Greg Lipton, president of the P.E.I. Real Estate Association, has watched some big changes in the province’s real estate market in the last few years. (CBC)

And it has led to a shortage in the rental market.

In 2018, the apartment vacancy rate was 0.2 per cent. Under those circumstances, students are scrambling for a place to live. This is bumping up prices in the vicinity of UPEI.

“Anything that’s within walking distance of the university — a single family or duplex or triplex — the prices on those are getting to be astronomical now,” said Lipton.

“You can rent to a student and get four or five students in a place.”

Charlottetown has one of the densest concentrations of Airbnb accommodations in Canada. (AirDNA.co)

At $400 each, that can bring in $2,000 a month.

This combination of new immigrants creating more valuable housing stock and new uses for housing driving demand has created some of the fastest growing home prices in the country.

Relative affordability

It should be noted, however, that prices in Charlottetown are still some of the most affordable in the country.

The $277,000 average represents six years of the median household income in the city. That’s about the same as in Halifax, where it is 6.5 years, but well under the national average of 10 years.

In greater Vancouver, the average home takes 20 years of median household income to buy.

Kevin Yarr is the early morning web journalist at CBC P.E.I. You can reach him at kevin.yarr@cbc.ca.

https://www.cbc.ca/news/canada/prince-edward-island/pei-house-prices-1.5230305

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