Rising home prices discouraging for potential 1st-time buyers

Rising prices of homes on P.E.I. have some Islanders wondering if they'll ever be able to afford their own place.

According to the Canadian Real Estate Association this week, housing prices are up 8.5 per cent in the last year. In 2020 to 2021, they were up 21.9 per cent.

Parker Snow said the high prices mean he'll have to keep renting, even though he and his partner are working full-time jobs.

"It seems like the average housing price, you are paying way too much for way too little because everything is so inflated it's almost not worth looking at," he said.

As well, Snow said it's hard for some people to qualify for a mortgage when they are just barely able to pay rent — something that's also jumped on P.E.I. over the last few years.

And with many jobs on the Island seasonal, he feels some are worried about steady income.

"I think there are a lot of jobs on the Island that have a lot of precarity so if you lose even a little bit of that steady income, you are going to default on a mortgage and you'll be in severe debt."

Realtors say the hot market of the last few years is showing no signs of slowing down.  As long as there is low supply and high demand, prices will go up, said Mary Jane Webster, a real-estate broker with Remax in Charlottetown.

"Historically we have had six to nine months of inventory on the system at this point and now we are down pretty significantly so essentially we have lots of buyers and not enough stock to sell them." 

Webster said new homes are being built and sold in an average of 44 days, according to data collected in February.

Some homes get multiple offers, and over the past year more people looking to relocate to the Island have bought homes without even setting foot in them.

That creates a tight market for those trying to buy a home in the range of $300,000, Webster said.

"We do multiple-offer scenarios which essentially if there is more than one offer then you are in a multiple-offer situation. We are seeing that mostly in the lower entry-level price point than we are the higher-end stuff."

Construction costs, up 30 per cent compared to past years, are also playing a factor, with most builders quoting about $300 per square foot.

Realtors said buyers who feel priced out in the Charlottetown market might have better luck finding something in their price range outside of the city.