We looked at statistics in 4 categories; single family, apartment style condo, townhomes and building lots. When compared to the first quarter 2018, results were conclusive across the board; unit sales are down, days to sell are up, active listings are up, and the months of available inventory are up over first quarter last year. Although the average sale price climbed very slightly showing a 1% increase for single family, apartment style condos, and townhomes and 3% increase for building lots.
Why are the months of available inventory (the absorption rate) important?
The absorption rate provides insight on the rate at which available properties are selling in a specific market during a given period of time. This rate does not take into account additional properties that enter the market at various times as it only provides a figure based on current available data. Understanding the absorption rate is important for buyers and sellers as it aids decisions on the timing of purchases and sales. The absorption rate can be a signal for developers to start building new homes or indicate a cooling period for construction.
As of April 17, 2019 we note the following market conditions:
Sellers Market (under 4 months of inventory):
- Single family homes under $600,000 (accounts for 32% of our single-family inventory)
- Apartment style condos under $600,000 (accounts for 80% of our apartment inventory)
- Townhomes under $300,000 (accounts for 13% of our townhome inventory)
Balanced Market (4-6 months of inventory):
- Townhomes between $301,000 to $400,000 (accounts for 24% of our townhome inventory)
Buyers Market (over 6 months of inventory):
- Homes over $601,000 (accounts for 68% of our single-family inventory)
- Apartment style condos over $601,000 (accounts for 20% of our apartment inventory)
- Townhomes over $401,000 (accounts for 63% of our townhome inventory)
- Building lots at any price
IMPORTANT NOTE: In the summary above single family includes acreage with house, waterfront and bare land strata as it accounts for approximately 19% of our current active listings. LOTS include acreage and waterfront. The coloured charts above do not include this data.
Historically, the second quarter (April-June) is the busiest quarter for sales and listings. It will be interesting to review those results to see if there is a change in the market conditions noted above.
Currently, our single family listings range from $275,000 for a mobile home on a .34 acre lot in Cedar to $5.7 million for two homes on a 6.9 acre low bank waterfront property with over 800 ft of waterfront in the Yellowpoint area of Cedar.
If you are considering buying or selling give us a call to discuss your specific requirements so we can help you make a well-informed decision!
What is the current vacancy rate in Nanaimo?
The official primary vacancy rate is set by CMHC (Canadian Mortgage and Housing Corporation). Nanaimo’s 2018 vacancy is 2.4% which is up from 1.9% in 2017. However, it is important to understand that CMHC counts only structures of 3 units or more. As of October 2018 CMHC recorded 3,853 private apartment units in the primary market.
The secondary rental market includes all rentals except privately initiated, purpose built rental structures of three units or more. Subsidized rental housing, rented condominiums, rental homes, and basement suites are all included in this secondary market. These units account for a large portion of rentals in every census metropolitan area. In 2011 more than half of renter households in Canada lived in secondary rental housing. Based on that our functional vacancy rate is likely at least double the primary CMHC vacancy rate.
We don’t know how many rental homes, rented condos, etc we have or how many unauthorized or illegal suites exist in the City of Nanaimo but we do know that since the city changed zoning to allow for legal suites in February 2005 there have been 3,034 legal suites built as at the end of 2018.
What are average rents in Nanaimo?
CMHC Average Rental Rates – Primary Market – Structures of 3 units or more -row and apartment structures of 3 units and over.
Secondary Market Rental Rates
It is impossible to accurately say what a specific property will rent for without seeing it, but here is a very rough guideline based on a quick search for local rentals.
- One Bedroom basement suite $1,000 – $1,200
- Two Bedroom basement suite $1,200 – $1,500
- Three Bedroom upper unit $1,500 – $2,200 Four Bedroom upper unit $2,300 – $2,500 Two Bedroom rancher $1,300 – $1,650
- Three Bedroom rancher $1,500- $1,850
- Three Bedroom full house $1,800 – $2,500+
- Four Bedroom full house $2,100 – $3,000+
- One Bedroom condo $850 – $1,500
- Two Bedroom condo $1,200 – $1,700
When you are buying an investment property it is crucial to have a realistic idea of your potential income. If you are interested in income properties or a home with a suite, give us a call. We are in touch with the latest options and have our own property managers at RE/MAX of Nanaimo to assess specific properties regarding rental income.