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

This property, at 1980 Fairfield Place, is adjoined to Gonzales Hill Park and is the centre of community opposition and a B.C. Supreme Court case as owners are looking to build a single-family home on the lot. Jake Romphf/News Staff
Home construction near Victoria’s Gonzales Hill Park spurs legal battle

Gonzales Hill Preservation Society worried about impacts to the park’s wildlife, rare fauna, views

Traffic heading south on Highway 17 and looking to turn left onto Beacon Avenue wait for the light to turn Tuesday morning. A report finds the intersection is experiencing “failing levels of service” for certain movements during the morning peak hours as well as the afternoon peak hours. (Wolf Depner/News Staff)
Major Sidney intersection already deficient predicted to get worse

New report also finds area’s pedestrian and cycling infrastructure in need of improvement

The artist rendered Sadie with a few more ribs and wrinkles than she had in real life, and with the fading of her paint she looks a little sad. But real-life Sadie was an energetic hunting dog, her owner Cliff Curtis said. (Zoe Ducklow/News Staff)
Dog sculpture at Glen Lake Park based off a happy hunting hound

Sadie the dog was not as old as the concrete art looks almost 20 years later

Demonstrators at the legislature on April 14 called on the province to decriminalize drug possession and provide widespread access to regulated safe supply across B.C. (Jake Romphf/News Staff)
Rally calls for decriminalization, safe supply as overdose emergency turns 5

From 2016 to the end of February, 7,072 British Columbians died due to overdose

The Latoria South section of the Royal Bay development in Colwood could include a new long-term care facility. (Black Press Media file photo)
Colwood’s Royal Bay could be home to new long-term care facilities

Capital Regional Hospital District board approves $8M land purchase for purpose

(Black Press Media file photo)
POLL: Do you have a plan in place in the event of a tsunami?

Tsunamis have claimed the lives of more than 250,000 people between 1998… Continue reading

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of April 13

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

(Government of Canada)
Liberal MP caught stark naked during House of Commons video conference

William Amos, in Quebec, appeared on the screens of his fellow members of Parliament completely naked

Provincial health officer Dr. Bonnie Henry updates B.C.’s COVID-19 situation at the B.C. legislature, Feb. 1, 2020. (B.C. government)
B.C.’s COVID-19 case count jumps to 1,168 Wednesday, nearly 400 in hospital

Now 120 coronavirus patients in intensive care, six more deaths

Moss covered branches are seen in the Avatar Old Growth Forest near Port Renfrew on Vancouver Island, B.C. Thursday, Sept. 29, 2011. THE CANADIAN PRESS/Jonathan Hayward
B.C. blockades aimed at protecting old-growth forests reveal First Nation split

Two Pacheedaht chiefs say they’re ‘concerned about the increasing polarization over forestry activities’ in the territory

One of the grand prizes for this year's Hometown Heroes Lottery includes a seaside home at SookePoint, $1.5 million, and an Audi Quattro. (Photo courtesy of Hometown Heroes)
Hometown Heroes Lottery features seaside home in Sooke

A stunning seaside home in Sooke could be yours for the price… Continue reading

City workers from Duncan were busy recently putting up street signs in both Hul’q’umi’num’ and English. (Submitted photo)
Hul’q’umi’num street signs installed in downtown Duncan

Partnership with Cowichan Tribes sees English street names twinned with Indigenous language

A still from the video taken of a violent arrest on May 30, 2020 in downtown Kelowna. (File)
Kelowna Mountie charged with assault for caught-on-camera violent arrest

Const. Siggy Pietrzak was filmed punching a suspected impaired driver at least 10 times during an arrest

Most Read