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.

Just Posted

City council deferred moving forward on a proposed development in Wildstone, requesting a meeting with the developer to get clarification on project details. Photo submitted.
Cranbrook city council debates proposed Wildstone development

Cranbrook city council held off on moving forward with a proposed apartment… Continue reading

Interior Health is reporting a COVID-19 exposure at Selkirk Secondary in Kimberley. Bulletin file.
COVID-19 case identified at Selkirk Secondary in Kimberley

Interior Health is conducting contact tracing

Cranbrook Arts will finally open the doors to their brand new gallery space on Friday, June 18th, 2021 at 4pm. To see what is behind these doors, be sure to check out the exhibit, Kootenay's Best, running until Labour Day weekend. (Cranbrook Arts file)
Cranbrook Arts’ inaugural exhibit, Kootenay’s Best, opens this Friday

The exhibit features over 50 Kootenay-based artists and will run until Labour Day Weekend

The Kootenay International Junior Hockey League met for their AGM and announced a number of new initiatives, new awards and changes in their executive committee, as well as the starting date for the 2021-22 season. Paul Rodgers file.
KIJHL announces start dates for 2021-22 season

Season set to begin Oct. 1 with league still following all health guidelines

Calvin Dickson photo.
Severe thunderstorm watch in effect for East Kootenay

Conditions favourable for the development of thunderstorms, hail and heavy rain

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

(Black Press Media file)
Dirty money: Canadian currency the most germ-filled in the world, survey suggests

Canadian plastic currency was found to contain 209 bacterial cultures

(pixabay file shot)
B.C. ombudsperson labels youth confinement in jail ‘unsafe,’ calls for changes

Review states a maximum of 22 hours for youth, aged 12 from to 17, to be placed in solitary

Grace (left), a caribou that was born in a maternal pen north of Revelstoke, is alive and well said the province. It appears she even has a calf. Maternity pens aim to increase caribou calf survival by protecting them from predation until they are older and less vulnerable. (Contributed)
For the first time in years, caribou numbers increasing near Revelstoke

North herd growing but south herd still concerning

Eleonore Alamillo-Laberge, 6, reads a book in Ottawa on Monday, June 12, 2017. THE CANADIAN PRESS/Sean Kilpatrick
Parents will need to fight ‘COVID learning slump’ over summer: B.C. literacy experts

Parents who play an active role in educating their children this summer can reverse the slump by nearly 80%, says Janet Mort

Kelowna General Hospital. (File photo)
COVID-19 outbreak at Kelowna General Hospital declared over

Three people tested positive for the virus — two patients and one staff — one of whom died

The border crossing on Highway 11 in Abbotsford heading south (file)
Western premiers call for clarity, timelines on international travel, reopening rules

Trudeau has called Thursday meeting, premiers say they expect to leave that meeting with a plan

The B.C. government’s vaccine booking website is busy processing second-dose appointments, with more than 76 per cent of adults having received a first dose. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 infections, hospitalizations stable for Tuesday

108 new confirmed cases, 139 in hospital, 39 in intensive care

Most Read