A condo building is seen under construction surrounded by houses in Vancouver, B.C., on Friday March 30, 2018. Housing sales in British Columbia are climbing faster than anticipated after a downturn, but a rebound won’t be as inflamed as the sellers’ market two years ago, says a report released Monday by Central 1 Credit Union. THE CANADIAN PRESS/Darryl Dyck

Growing population, declining mortgage rates speed up B.C. housing recovery

The average value of a home in B.C. dropped 2.4 per cent in 2019 to $522,000

Housing sales in British Columbia are climbing faster than anticipated after a downturn, but a rebound won’t be as inflamed as the sellers’ market two years ago, says a report released Monday by Central 1 Credit Union.

Declines in home prices, falling mortgage rates, a population increase and continued economic growth have prompted buyers to return to the market, especially in Metro Vancouver, said Bryan Yu, Central 1’s deputy chief economist.

His outlook report on B.C.’s resale market for 2019 to 2021 forecasts a seven per cent decline in B.C. housing resales this year, followed by an increase of 13 per cent in 2020 and a further four per cent jump in 2021, which amounts to an estimated 85,475 unit sales in 2021.

“The overall demand environment or sales environment has picked up quite significantly and what we’re seeing now is that stabilization in the pricing and some upward momentum building as markets are tightening right now throughout the province,” he said in an interview.

But a return to 2017 market levels where resales came close to 100,000 units is not anticipated, Yu said.

He said sales declines that started in 2018 and continued well into 2019 were largely driven by the federal government’s mortgage stress test for home buyers and the B.C. government’s foreign buyers and speculation taxes launched to increase the number of homes available for rent or sale in B.C.’s urban areas.

“The overall sales are still below late 2017 and early 2018 numbers,” said Yu. “But we have seen the mortgage rates drop anywhere up to 80 basis points. You can get a mortgage now for around 2.5 per cent for five years where a year ago you would be paying somewhere above three per cent.”

He said the average value of a home in B.C. dropped 2.4 per cent in 2019 to $522,000, but that same home value is expected to increase 3.8 per cent next year and by another four per cent in 2021.

Yu said the median home price in Metro Vancouver dropped about 10 per cent from last year and is currently at about $690,000. In Victoria, the median home price is $600,000.

He said the rental vacancy rate in most B.C. urban centres remains tight at slightly more than one per cent, while rents are expected to increase by 4.5 per cent for tenants looking for new homes.

The B.C. government’s most recent financial quarterly report released in September said home sales decreased by more than 16 per cent from January to July 2019 compared with the same period in 2018.

The government’s report said Metro Vancouver home sales from January to July 2019 fell 21.5 per cent compared to the first seven months of 2018.

Yu said the coming months will see the resale market rebuild but double-digit price increases are not expected.

“I don’t think there’s a lot of downside for this,” he said. “As we see the migration flows coming in, the population growth numbers and the tight labour market, those (factors) should be enough to provide some stimulus. It’s not going to be heading to the level you saw pre-stress test, but prices are on the rise again in our view.”

ALSO READ: Changes to B.C. building code address secondary suites, energy efficiency

ALSO READ: It could take you 218 years to save up for a house in this B.C. neighbourhood

Dirk Meissner, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Silver Creek residents see aircraft dropping fire retardant in direction of Falkland

Wildfire BC says no fire, crews in two air tankers and a bird dog were just practising

Majority of Salmon Arm council votes yes to controversial rezoning

Mayor and one councillor say no based on possibility that creek might be altered

Letter: Unmasked faces plentiful at Salmon Arm stores

Writer concerned residents, businesses have reverted to “old normal” too soon

Hitchhiker with metal pipe prompts RCMP to close Highway 1 near Salmon Arm

Police respond to report of man who pointed what was believed to be a rifle at passing driver

Recent surge in COVID-19 cases not unexpected amid Phase Three of reopening: B.C.’s top doc

Keep circles small, wear masks and be aware of symptoms, Dr. Bonnie Henry says

‘Resistance’ from Interior Health puts races in Penticton on hold

It’s unknown if races planned for this weekend at the Penticton Speedway will take place

Fundraiser kick-started for Vernon woman battling tongue cancer

Woman’s four-year-old twins are the driving force behind her fight

B.C. NDP changing WorkSafeBC regulations to respond to COVID-19

Employers say reclassifying coronavirus could be ‘ruinous’

Oliver Town Hall reopens to public as COVID-19 test comes back negative

Town Hall was closed briefly as a staff member showed multiple COVID-19 symptoms

Lake Country beachgoers reminded to maintain distance amid COVID-19

Signage, park rangers, park patrol students in place to monitor busy beaches in Central Okanagan

RCMP to investigate hate-motivated vandalism in Summerland

Swastikas and other graffiti spray painted on house and at bandshell

Statistical flaws led to B.C. wolf cull which didn’t save endangered caribou as estimated

Study finds statistical flaws in an influential 2019 report supporting a wolf cull

Baby raccoon rescued from 10-foot deep drainage pipe on Vancouver Island

‘Its cries were loud, pitiful and heartbreaking,’ Saanich animal control officer says

Most Read