PEI housing and mortgage overview

The CMHC reports that, not suprisingly, PEI waterfront properties remain popular. In 2000, the average price of a recreational property in the province only $48,360! However, the average price towards the end of 2007 had increased to an amazing $120,620, that's almost 150%.

Along with the higher prices, there is an increased level of sales in this segment. In 2000, 76 recreational properties were sold through the MLS system, but at the end of 2007 this number had increased to 131 units. The majority of the growth in this segment is being driven by former Islanders who have left the province to greater employment opportunities in other parts of the country and would like to have a summer vacation property.

PEI economic growth to moderate

CMHC predicts moderate growth for the Prince Edward Island economy for 2008- 2009. The province will continue to benefit from increased employment from the service sector, especially IT. Challenges for the islands economy include the much higher Canadian dollar and a rise in energy prices. These factors will continue to dampen the prospects for growth in agriculture, manufacturing and tourism industries. The tourism sector is expected to soften as the higher Canadian dollar impacts the desire of Americans to travel outside their own country.

PEI employment to slow to 0.6% in 2008

Market conditions for potatoes will continue to be challenged by the higher costs for fertilizer and other farm inputs as well as global competition. The rate of employment growth on the Island did much better than expected in 2007 with the level of growth ending the year up 1.1 per cent. Employment will slow to 0.6 per cent in 2008, even though the province continues to benefit from the expansion in both financial and business services. Employment in the construction sector has been stable in 2007 as a result of numerous large projects remaining under construction. The rate of provincial economic growth is expected to slow in 2008 and 2009 as the level of investment declines.

Increased prices make it hard for first time buyers

MLS sales in PEI over the next two years, are not expected to top the estimated record level of 1,675 sales in 2007. While the demand for existing homes will remain strong, due in part to the widening gap between new and existing home prices, it is expected that the price appreciation over the past five years will limit the number of first time buyers.

The average price of existing homes should rise over the next two years due to the strong demand for urban and waterfront and water view properties. The average MLS sales price is expected to increase by 3.4 and 3.3 per cent in 2008 and 2009, respectively.

PEI key stats

Metric		PEI	Canada
Population 2007		138,600	32,568,000
Consumer Price Index (2002=100)		-	0.00
Average earnings (SA, $)		-	$0.00
Unemployment rate (SA, %)		-	%
Housing starts (SAAR, thousands of units)		-	0.00
Average Residential Resale Price (annual % change)	2007 (E)	$133,457 6.4%	$306,397* 10.6%
	2008 (F)	$137,500 3.0%	$322,400* 5.2%
	2009 (F)	$142,000 3.3%	$334,500* 3.8%
Mortgages approved by lenders, residential 2006	Chartered banks	$356,867,000	$152,478,903,000
	Trust companies	$35,641,000	$6,664,898,000
	Life and companies other	$57,451,000	$30,225,144,000
	Total	$449,959,000	$189,368,945,000

Source: Stats Canada, CMHC
2007 E = estimated by the CMHC
* Canada calculation excludes Yukon and Northwest Territories
Data based on application received date
Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller institutions and privately-insured loans in some areas
Quebec data is understated due to low response rate to the surveys in that province.
*Conventional Lending data only

Local Market Indicators

Census Metropolitan Area		Total Housing Starts	MLS sales	MLS average price
Charlottetown	2007	394	650	$166,244
	2008 (F)	375	625	$170,000
	2009(F)	375	600	$175,000

Sources: CMHC, Canadian Real Estate Association, Local Real Estate Boards, Statistics Canada
MLS = Multiple Listings Service