The town of Comox, BC has changed considerably since the 1960s when there was only 2500 people living there. Now there are about 15000 people and growing. New home construction in Comox increased in 2014 and it has been climbing since then. Price increases took off in the area in 2017 and record highs were seen during the year.
In contrast to record high prices in some sectors, home listings dropped compared to normal years with some months hitting record lows. There are a number of reasons for this that include the Baby Boomer generation choosing the Comox Valley and towns like Comox as a retirement relocation for the quality of life that the area offers. There are also an increasing number of people leaving Vancouver and its surrounding suburbs because of that region’s insanely high prices.
While many people come to vacation in the Comox Valley, quite a number also relocate here and want to rent. Unfortunately, the rental vacancy rates are among the lowest on Vancouver Island. While the exact numbers will vary during the year, rates of around 0.5% and lower were experienced in 2017. The rates drop even lower for 3 bedroom and higher accommodation. When there is little to rent people are forced to look for very short term rentals such as B&B, motels, campgrounds and other accommodations. The only other option is to purchase a home.
Building a new home is an option but price increases were also experienced in the new construction sector due to progressive price increases in building materials throughout the year. Added to this will be the impact of the shortly expected change to the BC Building Code. More requirements means additional cost to the builders which means increased cost to consumers. The government goal of getting to net zero housing by 2032 is laudable but how must will this cost us?
While homes on the used real estate market are still less than a new build, the prices of many types of homes have gone up and the near term outlook remains the same. Higher prices and low supply unless some major outside effect pushes either in the opposite direction. There are, of course, going to be changes as a result of the impending changes to mortgage rules expected for the first of 2018. The federal government has already made it harder for some people to get mortgages. All non-insured borrowers will need to qualify at either the posted 5-year fixed mortgage rate or their contract rate plus 200 basis points, whichever is higher. Expect the challenges to increase for more people as they struggle to qualify for mortgages under the new rules. The government says that they are for affordable housing but their actions seem quite the contrary as they make it harder for many of us to get mortgages.
So what will 2018 bring? Even higher prices? Continued reduced supply? Higher mortgage rates? The answer is likely yes to all three to start the year. A key determinant of how long these trends will last will be the numbers of people relocating to the area and from where. The Baby Boomer and mainland relocation trend will continue for the foreseeable future. How many other people will decide to more here?
The Comox and Courtenay suburban areas offer almost very style of home from mobile homes to multi-million dollar homes. Recreational, social and cultural opportunities abound in the area. The weather is among the most moderate in Canada and the scenery and quality of life are very hard to beat. As the saying goes, drop by for a visit and you many not want to leave.