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

Mount Elizabeth Theatre have been approved for a provision of funding by city council for up to $42,000. (Jacob Lubberts photo)
Kitimat’s multi-use theatre grant request approved for live streaming equipment

A funding commitment of up to $42,000 was granted from council to the Mount Elizabeth Theatre

Tracy Owen-Best with her husband, Larry Best. Tracy runs both the Nechako Barbershop and Hair Essentials Salon in Kitimat. Diagnosed with cancer in March 2020, she’s kept a positive mindset with the help from a supportive family. (Photo supplied)
In Our Valley: Tracy Owen-Best

Barbershop owner and cancer fighter keeps it positive

The Quesnel RCMP Detachment is one of seven northern police buildings which can now connect directly to Prince George for daily bail hearings. (Observer File Photo)
Bail hearings going virtual in B.C.’s north

A court pilot project will see virtual courtroom cameras set up in seven RCMP detatchments

FILE – Wet’suwet’en hereditary chiefs have agreed to sign a memorandum on rights and title with B.C. and Ottawa, but elected chiefs are demanding it be called off over lack of consultation. (Thom Barker photo)
Wet’suwet’en hereditary chiefs, Lake Babine Nation get provincial funding for land, title rights

Government says it’s a new, flexible model for future agreements between Canada, B.C. and First Nations.

The fence option chosen for the 461 Quatsino Boulevard development is the red lines that border the site plan. The fence will be roughly six feet high with the exception of the fence bordering Cranberry Street which will be eight feet high. (Boni Maddison Architects photo)
Fence to be erected between housing project and Kitimat homeowners

Residents of the Cranberry Street area are finally getting the fence they want

In this image from NASA, NASA’s experimental Mars helicopter Ingenuity lands on the surface of Mars Monday, April 19, 2021. The little 4-pound helicopter rose from the dusty red surface into the thin Martian air Monday, achieving the first powered, controlled flight on another planet. (NASA via AP)
VIDEO: NASA’s Mars helicopter takes flight, 1st for another planet

The $85 million helicopter demo was considered high risk, yet high reward

Families of two of three workers killed in a train derailment near Field, B.C., in 2019 have filed lawsuits accusing Canadian Pacific of gross negligence. The derailment sent 99 grain cars and two locomotives off the tracks. THE CANADIAN PRESS/Jeff McIntosh
Families of workers killed in Field train derailment allege negligence in lawsuit

Lawsuits allege the workers weren’t provided a safe work environment

(New Westminster Police)
4 youth arrested after 30-person brawl in New Westminster leaves 1 seriously injured

Police are looking for witnesses who saw the incident take place

South Surrey’s Paul Cottrell, who works with the DFO, tows a grey whale out of Semiahmoo Bay Sunday. (Contributed photo)
Dead whale floating near White Rock towed to shore for necropsy

Animal has been dead since at least April 15

Sunday’s storm rocked one of the ferries crossing Kootenay Lake. Photo: Dirk Jonker
VIDEO: Storm makes for wild ferry ride across Kootenay Lake

The video was captured by ferry employee Dirk Jonker

Dr. Bonnie Henry gives her daily media briefing regarding Covid-19 for the province of British Columbia in Victoria, B.C, Monday, December 7, 2020. THE CANADIAN PRESS/Jonathan Hayward
Toddler marks youngest British Columbian to die related to COVID-19

Child one of eight people to die from virus this weekend

Chakalaka Bar & Grill remains open in defiance of orders from Island Health to close. (Cole Schisler photo)
B.C. health authority seeks injunction against restaurant defying COVID-19 orders

Chakalaka Bar and Grill plans to continue serving customers without public health compliance

Pharmacist Barbara Violo arranges all the empty vials of the Oxford-AstraZeneca COVID-19 vaccines that she has provided to customers at the Junction Chemist which is a independent pharmacy during the COVID-19 pandemic in Toronto, on Monday, April 19, 2021. THE CANADIAN PRESS/Nathan Denette
B.C. to open up AstraZeneca vaccines for all people 40+, set up clinics in hot spots

A total of 13 neighbourhoods and communities will receive the AstraZeneca vaccine

Most Read