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

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

Face masks are required to be worn in all SD 52 common areas such as hallways. School District 52 announced on Jan. 15 three different schools in Prince Rupert all had a member of the school community test positive for COVID-19. (Photo: K-J Millar/The Northern View)
3 Prince Rupert schools have positive COVID-19 case(s)

Letters sent home to families in three Prince Rupert schools announcing COVID-19

Power outages affected thousands of BC Hydro customers in the north on Jan. 14 (File photo) (File photo)
Power outages affect thousands of BC Hydro customers in northern B.C.

Transmission failure led to outages in Prince Rupert and Port Edward

A Prince Rupert port expansion project received a $25 million investment from the provincial government, the Ministry of Transportation and Infrastructure announced on Jan. 14. Seen here is Ridley Terminals Inc., a coal export terminal in Prince Rupert (Shannon Lough / The Northern View)
$25 million government investment in Prince Rupert port expansion project

Prince Rupert port expansion project expected to create more than 2,200 jobs

For the second time in less than a year, Air Canada announced on Jan. 13 it has suspended flights on the Prince Rupert-Vancouver route as of Jan 17. (Photo by: Jerold Leblanc)
Cessation of flights to YPR will affect the municipal economy and global trade, P.R. Mayor said

Chamber of Commerce said it will aggressively pursue the resumption of flights to Prince Rupert

A scene from “Canada and the Gulf War: In their own words,” a video by The Memory Project, a program of Historica Canada, is shown in this undated illustration. THE CANADIAN PRESS/HO - Historica Canada
New video marks Canada’s contributions to first Gulf War on 30th anniversary

Veterans Affairs Canada says around 4,500 Canadian military personnel served during the war

Gin, one of the Kantymirs’ two sheep. (Martha Wickett-Salmon Arm Observer)
Sheep start up ATV, sit in cars and go for walks in Salmon Arm

Until they bought two sheep, Ken and Karleen Kantymir didin’t realize just how social the animals are

Heather Lucier, a pastor at Kelowna Harvest Fellowship, speaks to an RCMP officer outside of Harvest Ministries on Sunday, Jan. 10. (Michael Rodriguez - Capital News)
Kelowna church fined 2nd time for violating public health order

Harvest Ministries in Kelowna has previously said they will fight the tickets in court

Powell River-Sunshine Coast MLA Nicholas Simons was appointed to the NDP cabinet as minister of social development and poverty reduction after the October 2020 B.C. election. (Hansard TV)
B.C. job training fund increased for developmentally disabled

COVID-19 has affected 1,100 ‘precariously employed’ people

B.C. driver’s licence and identity cards incorporate medical services, but the passport option for land crossings is being phased out. (B.C. government)
B.C. abandons border ID cards built into driver’s licence

$35 option costing ICBC millions as demand dwindles

sdf
2nd in-school violence incident in Mission, B.C, ends in arrest

RCMP notified of local Instagram page with videos (now deleted) showing student assaults, bullying

BC Emergency Health Services has deployed the Major Incident Response Team (MIRRT) as COVID-19 positive cases rise in the Williams Lake region. (Monica Lamb-Yorski photo - Williams Lake Tribune)
B.C.’s rapid response paramedics deployed to Williams Lake as COVID-19 cases climb

BC Emergency Health Services has sent a Major Incident Rapid Response Team to the lakecity

(Phil McLachlan - Black Press Media)
RCMP say ice climber seriously injured after reportedly falling 12 metres near Abraham Lake

Police say man’s injuries were serious but not life-threatening

U.S. military units march in front of the Capitol, Monday, Jan. 18, 2021 in Washington, as they rehearse for President-elect Joe Biden’s inauguration ceremony, which will be held at the Capitol on Wednesday. (AP Photo/J. Scott Applewhite)
Biden aims for unifying speech at daunting moment for U.S.

President Donald Trump won’t be there to hear it

Most Read