Raise the discussion of booming real estate in Canada, and the Vancouver, BC housing market will likely be mentioned more than once. While the city has maintained a strong market over the last few decades, another story worth mentioning is the performance of the province as a whole.
In mid-2020, Canadian real estate markets from coast to coast experienced a surge in demand that caused inventory to fall below historical levels. Meantime, prices experienced continuous increases month-over-month, pushing the entire BC housing market into red-hot seller’s territory.
With an influx of new residents coming from overseas and other Canadian provinces, affordability in BC is moving further out of reach. Homes have been flying off the market and prices have been rising well beyond the national average, and there doesn’t seem to be any sign of slowing as we welcome the new year.
British Columbia Closing 2021 Strong
While numbers may be decreasing in comparison to the scorching sales of October 2020, October 2021 was still a strong one. The British Columbia Real Estate Association (BCREA) tallied residential unit sales of 9,593. With a record low number of listings on the market, the average residential price in the province rose 18.9 per cent year-over-year, to $964,777. This helped push the total sales volume to a whopping $9.3 billion for the month.
With a 40-per-cent decline in active residential listings at the end of October compared to 2020, the BC real estate market continues to be a hot seller’s market. “The story across the province continues to be the record low number of listings,” said BCREA Chief Economist Brendon Ogmundson. “Rising mortgage rates should start to temper sales activity next year, but even with a moderation in demand it will take quite some time for the inventory of homes to return to a healthy level.”
Year-to-date, BC residential sales dollar volume was up 69.7 per cent to $99.6 billion year-over-year. Unit sales were up 42.8 per cent to 108,798 units, while the average MLS® residential price was up 18.8 per cent to $915,833. With strong numbers in the first month of the 2021’s last quarter, it is anticipated that the market will continue to burn strong as 2021 comes to a close.
BC Market to Continue Simmering into 2022
While things may appear to be slightly cooling in the British Columbia housing market, we aren’t out of the woods just yet. As 2022 inches closer, industry observers expect to see real estate metrics continue strong in the new year.
With the MLS residential sales in BC anticipated to rise to 121,450 units by the end of the year – a 29-per-cent increase over the 94,013 unit sales in 2020 – there could be a welcomed cooling off in the beginning of the new year. According to Ogmundson, “After a frenzied start to the year, activity in BC housing markets has settled back to a level that is broadly in-line with long-run trends. The strength of the first half of this year has sales on track to easily break the previous record for annual sales.”
The Board said that MLS residential sales will fall about 15 per cent, down to 102,750 units for the entirety of 2022, potentially giving the market some time to relax and moderate. “While we do not anticipate a repeat of the record-setting market of 2021, we do expect housing market activity to remain vigorous in 2022,” added Ogmundson.
With annual sales projected to remain above average, listings are not anticipated to keep pace with demand, which will likely further push the average home price in BC upward approximately three per cent compared to 2021. While an increase in price is generally not favourable for buyers, the slight increase is more digestible than the 17-per-cent increase experienced over the course of 2021.
Source: British Columbia Real Estate Association