Vancouver, BC – October 7, 2021. The British Columbia Real Estate Association (BCREA) has released a report quantifying the imbalance between supply and demand in the British Columbia housing market during the COVID-19 pandemic.
BCREA’s recent Market Intelligence report, Imbalance: housing supply and demand during the pandemic, at the height of market activity in March 2021, an estimated 67,000 buyers were looking for homes across British Columbia while only 24,000 listings were available. In other words, potential buyers outnumbered sellers by three times, and the ratio was more pronounced in areas of the province that experienced significant relocation demand.
“The conditions we saw at the height of market activity earlier this year were unprecedented,” said the report’s lead author, BCREA chief economist Brendon Ogmundson. “Record mortgage rates and the work-from-home environment pushing buyers into rural areas have both fueled demand disproportionately to supply. Sellers looking to stay put in an environment where the space at home was limited, it created a huge imbalance.”
In the Fraser Valley, buyers outnumbered sellers by up to seven times at the peak of the spring market. This caused prices to rise nearly 30%, double what was seen in the Greater Vancouver area over the same period. Markets in the interior as well as Vancouver Island saw similar trends, with Victoria earning the title of most undersupplied market with a nine-to-one ratio of buyers to sellers.
To arrive at these conclusions, Ogmundson used a framework model recently developed by researchers at the US Federal Reserve.
“This kind of data shows how difficult it is for supply to keep up with rapidly changing demand,” adds Ogmundson. “The supply issue is not new to BC, but seeing how much worse it can get during these types of events underscores the need for a coordinated strategy to dramatically increase supply.”
To read the full report, click here.
E-mail: [email protected]
To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.