The Powell River housing market, like many others within British Columbia, has enjoyed notable sales and price growth. Market demand in Powell River has been driven by a diverse array of buyers, from out-of-province retirees to foreign investors. Indeed, there’s a lot to love about Powell River, and keen homebuyers are noticing!
But it appears that Powell River is mirroring the same trends that have become evident across the broader Canadian real estate market. Activity appears to be cooling after 18 months of red-hot gains, but the numbers still suggest a strong market. Does this mean the southwestern B.C. city has reached its peak, or is there still room for growth in this local market? This is be a challenging question to answer, considering the many factors at play over the next six to 12 months, from the Delta variant to shifting consumer trends and interest rates.
Perhaps a look at how the Powell River real estate market performed in the final full month of summer could offer a glimpse into the future. So, what do the numbers show?
Powell River Housing Market is Moderating, But Still Strong
According to the Powell River Sunshine Coast Real Estate Board, residential sales tumbled at an annualized rate of 42.4 per cent in August, totalling 34 units. On a year-to-date basis, transactions have been a different story, surging 48.4 per cent in the first eight months of 2021, with 328 unit sales.
When assessing the Powell River real estate market on a historical basis for the month of August, residential sales were 16.7 per cent below the five-year average and five per cent below the 10-year average. Put simply, compared to August 2016 and 2011, Powell River is performing better than ever. But, can the housing sector sustain this momentum? Time will tell.
Despite slumping sales activity, price growth has remained impressive. The average price of residential properties sold in the Powell River real estate market advanced 12.4 per cent in August year-over-year, to $528,000. The year-to-date average price, which industry observers assert is more comprehensive, skyrocketed a whopping 24 per cent to $509,824.
On the supply front, new residential listings slipped five per cent year-over-year to 57 listings. Active residential listings decreased 13.7 per cent to 126 units. New listings were 12.2 per cent above the five-year average, while active listings were 14.5 per cent below the five-year average.
Months of inventory, which measures the number of months it would take to exhaust current housing inventory at the present rate of sales activity, was 3.7 months. This is up from 2.5 months in August of last year, but still below the long-run average of 6.4 months.
“Home sales were down in August compared to the same month last year, although that was to be expected given the scorching records the housing market was setting throughout the second half of 2020,” said Neil Frost, President of the Powell River Sunshine Coast Real Estate Board, in a statement. “New listings have been holding up remarkably well compared to other markets in the province, with overall inventories actually rising from their rock-bottom levels earlier this year and providing some much-needed relief in the form of more available listings.”
And, indeed, relief may be coming to the Powell River housing market. In the second quarter of 2021, housing starts climbed to 14, up from nine in Q2 of 2020, according to Canada Mortgage and Housing Corporation (CMHC). In the first six months of 2021, housing starts more than tripled, totalling 89 units.
Is More Growth on the Way for the Powell River Housing Market?
Perhaps demand in the Powell River real estate market, and broader British Columbia, has reached its peak. Many homebuyers are still sitting on the sidelines, waiting for relief from the monumental price growth and housing affordability woes by means of a foreign speculators’ tax in the region, to the federal government’s promise to construct more housing.
In the final few months of 2021, residential property prices could continue to soar in both British Columbia and Powell River. However, 2022 could turn out to be a different story as fresh housing supply is projected to come online. When the world flips the calendar to usher in the new year, any easing in the Powell River real estate market might attract out-of-town or out-of-province buyers looking to save money and achieve their dream of home ownership, in this more-moderately priced housing market.