VANCOUVER (NEWS 1130) — Home sales are on the rise across B.C., and especially in the Fraser Valley, despite the pandemic, according to the latest statistics from the B.C. real estate sector.
Pent up demand and record-low interest rates are fueling a home-buying spree throughout province, according to the B.C. Real Estate Association (BCREA) and in particular, toward the suburbs and beyond.
“You can borrow on a five-year fixed at 1.8 per cent,” says Brendon Ogmondson, chief economist with the BCREA. “That’s by-far a historical low, and it ultimately means you can essentially borrow for free after you take out inflation.”
The numbers would seem to defy logic, until you dig a bit deeper, Ogmondson says. He notes most of the people who are buying homes are those who have managed to hold on to their jobs during the COVID-19 health crisis.
“When we look at high-wage employment, the type of employment which tends to support the ownership market, those jobs are actually up about three to four per cent,” says Ogmondson.
With October seeing a nearly 49 per cent increase in home sales in the Fraser Valley compared to the same month last year, Ogmondson says the buyers looking for space are causing the spike.
“People want space. If you’re going to be working from home, you might want a home office, you might want a yard for socially-distanced entertaining. So we’re seeing a lot of demand being pushed into single-family homes especially, and kind of higher-priced homes,” he says.
Residents looking to move outside the Lower Mainland are also moving to the Okanagan and Vancouver Island to find more affordable housing and possibly with acreage, Ogmondson adds.
According to the BCREA data, the average residential price in B.C. set a record at $812,960, “a 12.5 per cent increase from $722,333 recorded the previous year. Total sales dollar volume in August was $8.98 billion, a 61.8 per cent increase over.” A lack of inventory is also pushing up prices as active listings in B.C. keep trending lower and were closer to 14 per cent in October compared to 2019.
Even though the country’s economic recovery is still questionable, he says, the Bank of Canada’s interest rates are likely to remain at or below two per cent for the next few years.
Ogmondson says the trend of rising sales has been going since early summer, and for the past few months homes sales in B.C. have hit “record or near-record monthly levels.” He says he expects the trend to continue, but mortgage rates don’t appear to be going up anytime soon.