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

Gingerbread land spreads smiles for Vernon seniors

Halina Centre’s Christmas luncheon Dec. 11

Weak link in Sagmoen trial, defence says

Counsel questions whether search warrant police executed was obtained on reasonable grounds

North Okanagan MP says throne speech lacked specifics

‘Trudeau government presented a vague agenda,’: MP Mel Arnold

Overdose deaths cut in half in Vernon

In 2019, there were 12 illicit overdose deaths in Vernon, down from last year’s 24

Vernon house fire likely started in kitchen

Nobody home at time except family pet who died after being rescued by firefighter

VIDEO: Federal Liberals’ throne speech welcomes opposition’s ideas

Trudeau will need NDP or Bloc support to pass legislation and survive confidence votes

EDITORIAL: Reflecting on a tragedy, 30 years later

While the Montreal Massacre made headlines because of its scale, gender-based violence is not new

VIDEO: John Lennon’s iconic Rolls Royce rolls into Vancouver Island college for checkup

Royal BC Museum, Camosun College and Coachwerks Restorations come together to care for car

‘She was awesome’: Malakwa baker leaves U.S. holiday show

‘There are Christmas miracles, look at me’

VIDEO: Rockslide closes part of Highway 93 in Fairmont Hot Springs

Geotechnical team called in to do an assessment after rocks fell from hoodoos

Petition calls for appeal of ex-Burns Lake mayor’s sentence for sex assault

Prosecution service says Luke Strimbold’s case is under review

Northwest B.C. wildlife shelter rescues particularly tiny bear cub

Shelter co-founder says the cub weighs less than a third of what it should at this time of year

Independent Investigations Office seeks witnesses following arrest in Penticton

The male resisted arrest at approximately 8:40 a.m. and sustained a head injury

Sicamous Eagles defeat Summerland Steam in overtime decision

Junior B hockey teams faced off in Summerland on Dec. 5

Most Read