Canada is known globally as a country with an exceptionally high standard of living, with landscapes as diverse as the cultures that fill its cities from coast to coast. The most western province in the country is no exception, making the British Columbia housing market a hot spot for home-buying Canadians who are keen to experience the breath-taking mountain ranges, proximity to the ocean, and life on the west coast.
The COVID-19 pandemic only intensified this trend, and markets across the province have enjoyed strong activity over the past year. But could these red-hot trends be making it harder than ever before for buyers in British Columbia? Here’s what the numbers are saying:
British Columbia Housing Market Continues to Soar in May
For years, real estate in British Columbia, particularly in the large metropolitan city of Vancouver, has been known to carry premium price tags. When compared to the East Coast and the Prairie Provinces, average property prices for British Columbia homes soared ahead. This past year, given the effects of the global pandemic, has only pushed the market in BC further into seller’s territory.
Adding to a strong second quarter, residential unit sales in the province for the month of May totaled 12,638. Compared to May 2020, this is more than a 178% increase, driven by fierce demand.
The stark increase in demand was, unfortunately, not counteracted by an increase in supply. Come the end of May, total active residential listings were down 17% when comparing May 2021 to May 2020. Coupling these two metrics, it is no wonder that the average home price in British Columbia has risen yet again. Astonishingly, when compared to May 2020, the average home price in the province has increased 26.2% to $916,340. When price is taken into consideration along with the unit sales, sales dollar volume has more than doubled with the month totalling $11.6 billion in sales – 251% more than the same month last year.
After almost a year of a blistering hot seller’s market, people are hoping it will begin to cool off a little. British Columbia Real Estate Association Chief Economist Brendon Ogmundson claims, “Provincial housing markets continue to calm after peaking in March.” In addition, Ogmundson believes the market will remain strong despite new qualification criteria to help slow the market: “the implementation of a stricter mortgage stress test in June may have a minor impact on home sales but we expect strong market activity over the second half of the year.”
June Numbers Indicate More Hot Activity Within British Columbia Housing Markets
As anticipated, the month of June closed out the second quarter of 2021 with gusto. The BCREA reported a total of 11,070 residential units were sold during the month. This is a 34.7% year-over-year increase. While it is a little less than the sales posted in May 2021, it is still well above typical for the province.
A low overall supply in the market has put added stress upon buyers. With little to choose from, and such high demand for housing, most units are being sold well above listing price due to the desire to get in on the market. Certain areas of the province, however, have demonstrated strength when it comes to new listings. Ogmundson states, “as expected, housing market activity is calming to start the second half of 2021. That said, while down from record highs earlier this year, home sales across the province remain well above long-run average levels.”
At the end of June the MLS average residential price in British Columbia sat at $910,445; a decrease from the previous month but still a shocking 34.7% increase over June 2020. Total sales dollar volume was also less in June than it was in May. Sales volume increased 64.6% on a year-to-year basis, ticking in at $10.1 billion.
What Lies Ahead for BC Real Estate?
As we slide into the third quarter of 2021, it is expected that the BC market will remain in a hot seller’s spot for the rest of 2021. If we are to expect any softening of prices, inventory needs to pick up and demand needs to slow. As we head into next year and interest rates go back up, many industry observers are hopeful that this may bring the slow levelling-out of the market that BC homebuyers are patiently waiting for.