When housing market analysts discuss the British Columbia real estate market, much of the focus falls upon Vancouver, Victoria and Fraser Valley. These regions have experienced enormous gains in residential sales and average prices. Despite a sluggish recovery in the aftermath of the first wave of the coronavirus pandemic, the B.C. housing market has rebounded and has enjoyed tremendous growth. But there is another benefactor of the historically low interest rates, strong demand, pent-up savings and evolving consumer trends: Powell River real estate.
The Powell River housing market has witnessed record-setting sales activity and price gains over the past 15 months. As the rest of the country begins to record easing trends, Powell River’s real estate market is instead seeing an acceleration in prices. But can this local market sustain this growth and defy the trends seen in much of Canada? It all depends on supply – and the numbers show housing levels are finally starting to increase.
This is excellent news for prospective homebuyers hoping to get into the real estate market. But, until then, let’s take a look at how Powell River real estate has performed to kick off the fourth quarter of 2021.
Powell River Real Estate Prices Continue to Surge
According to the Powell River Sunshine Coast Real Estate Board, residential sales plummeted at an annualized rate of 63.6 per cent in October, totalling just 20 transactions. Year-to-date, home sales have risen 12.8 per cent to 380 units compared to the same time last year, indicating that demand has potentially reached its peak in the Powell River real estate market.
On a historical basis, home sales were 45.4 per cent below the five-year average for the month of October. They were also 38.1 per cent below the decade average.
The most significant development in the Powell River housing sector was price growth. In October, the average price of homes sold increased 14.8 per cent year-over-year to $538,990. In the first 10 months of 2021, home valuations climbed 21.3 per cent.
The supply issue came into focus for Powell River: listings were down, but inventories were up.
The number of new residential listings tumbled 36 per cent from October of last year, totalling 32 units coming on the market. Active residential listings dropped 5.9 per cent, with 112 units on the market to close out the month. However, on a month-over-month basis, active listings increased 4.1 per cent.
Months of inventory sat as 5.6 in October, up from 2.2 months at the same time a year ago. They were also below the long-run average of 6.7 months. This is an important measure, indicating the number of months it would take to liquidate current inventory of listings at the present rate of sales.
“Sales activity came in lower than usual for this time of year after the blistering pace seen over the past several months,” said Neil Frost, President of the Powell River Sunshine Coast Real Estate Board, in a news release. “With a steady influx of new supply, this is actually good news for buyers as overall inventories have lifted from rock-bottom levels, albeit to still historically low levels. Price gains have come down from their strong double-digits to more moderate increases, perhaps signalling an end to the astronomical price growth of the past year.”
New housing construction has been prevalent in the Powell River housing industry this year. According to Canada Mortgage and Housing Corporation (CMHC), housing starts climbed to 120 in the first nine months of 2021. In the third quarter, starts were relatively unchanged from the July-to-September period in 2020.
Is Powell River Defying Broader B.C. Housing Market?
The months of inventory available in the Powell River real estate market defy broader provincial market trends. British Columbia is facing historically low levels of supply. As the British Columbia Real Estate Association (BCREA) recently reported, total active residential listings declined at an annualized rate of 40 per cent – a record low in the province. Active listings have been trending downward for five consecutive months.
Here’s a look at the most recent active listing levels in the different jurisdictions in the province:
- Chilliwack: -44.1%
- Fraser Valley: -52.8%
- Kamloops: -49.3%
- Kootenay: -15.2%
- Victoria: -54.8%
Suffice it to say, Powell River is witnessing greater inventory levels than the rest of the province. This is positive news for homebuyers seeking to purchase property in one of Canada’s largest provinces. Although price growth has accelerated in Powell River, the new supply coming online could alleviate the substantial price increases seen this year. Either way, 2022 could be a telling year for Powell River, the province, and the overall Canadian real estate market. From interest rate hikes to new public policy pursuits by the federal government, dramatic shifts are projected to help bring real estate figures closer to levels seen prior to the public health crisis.