According to a report by the BC Real Estate Association, British Columbia’s housing market is at an all-time low in terms of supply, even as house prices soar.
This means potential buyers in Metro Vancouver need to look beyond Fraser Valley suburbs and travel even further to find lower housing prices.
The report, released on Wednesday, showed an average increase in home prices of around 19% year-on-year in October. However, the number of homes listed fell by an average of 40% across the province.
Michele Matteazzi, real estate agent with Sutton Group-West Coast Realty, said the valley is seeing an influx of buyers from the western part of the Lower Mainland, which is forcing potential buyers in the area to relocate to other parts of the province.
“We have a lot of movement towards Vernon. A lot of movement towards Kelowna. Osoyoos, even,” he said. “People are just quitting in the Valley and saying, ‘This is…this is too much. “”
Richelle Kendall, who is moving from Abbotsford to Vernon, said her house in the valley was sold before she even finished listing it.
“I was devastated when…before we even listed our home, I received five text messages from people in the neighborhood who knew we were selling,” she said.
“[The messages were] saying, ‘Hey, can we come and see the house? Can you send me some details? What are you guys listing? ‘”
Report showing supply shortage
Brendon Ogmundson, chief economist at the BC Real Estate Association and author of the report, said housing supply simply does not match demand.
“We published research some time ago showing, you know, how many buyers there were for each seller,” he said. “From the markets on the island, in some places we had, we were estimating nine buyers per seller. In the Fraser Valley, it’s like seven buyers per seller.”
“So no surprise – you get a lot of multiple bid situations, and in those situations you’re going to get rising prices.”
Ogmundson says province-wide relocation among homebuyers, driven by prices, also reflects different work habits now that the pandemic has made remote work more viable.
He says Chilliwack, for example, has seen an increase in demand from those who only need to travel to work in Vancouver occasionally.
Vancouver Island and the Okanagan, however, have seen an increase in demand from people working remotely or planning to retire.
These areas, despite an average price increase per home of 26% in October compared to last year, saw a 47% drop in the number of homes listed.
“It takes a long time to rebuild inventories to a healthy level that will help moderate price growth,” he said.
“There’s no obvious political leverage for the government to pull. You can’t really incentivize or force people to list their homes. So the only real longer-term solution is to just build a lot more housing .”
Ogmundson says building fewer large single-family homes and more multi-unit homes, as well as custom homes for millennials looking to settle, would help absorb some of the growing demand from homebuyers.