Home prices on P.E.I. back on the rise after 6-month dip in 2022

After falling in the second half of 2022, house prices on P.E.I. have rebounded back to where they were last summer.

The P.E.I. Real Estate Association released market statistics for September last week.

"It's still somewhat of a sellers' market," said association president James Marjerrison. "It's a little more balanced than it has been the last number of months and years."

Starting in mid-2020, house prices on P.E.I. went through a two-year period of rapid increases, with the benchmark price rising from $222,900 in May of 2020 to $370,200 in July of last year.

In an effort to tame inflation, the Bank of Canada began increasing interest rates early in 2022, and that began to have an impact on P.E.I. house prices after July. But prices began bouncing back up after New Year's.

"There was a little bit of wait and see, I think, with interest rates," said Marjerrison.

"Buyers, when they kept seeing the hikes, were sitting on the sidelines a little bit waiting to see if it was going to come back down or level off."

There is still a lot of demand for entry-level homes, he said, which are currently priced between $300,000 and $400,000, and he is still seeing multiple bids on those homes.

Homes priced over $500,000 are waiting longer to find a buyer, he said.

As for whether house prices will continue to rise, Marjerrison said it is too early to tell.

"If interest rates stay stable where they are for the next little while, then I think it will increase buyer confidence, and if inventory stays low, then it could increase the benchmark price," he said.

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The Canadian Real Estate Association is forecasting a modest increase in prices for P.E.I., up 1.5 per cent in the next year. That is the lowest forecast increase in Atlantic Canada, but the same as its national forecast.