There is no likely price relief coming for those trying to enter the housing market across B.C., says the executive vice-president of Century 21 Canada.
Brian Rushton says the fifth annual Price Per Square Foot survey conducted across Canada by Century 21 reflects the widespread increase of housing prices since the fall of 2020, with no price correction in sight for the short-term future.
Rushton said indications are another speculative boom will sink in this fall in the Lower Mainland, fueled by the easing of immigration restrictions in place since the pandemic began, and the chain reaction will continue to have an impact on southern Vancouver Island and Southern Interior house prices.
It relates to the basic economic impact of supply and demand – there are more buyers than housing inventory for sale.
Rushton said that the scenario through much of this year in the Okanagan – multiple offers, initial offers $20,000 to $30,000 above the asking price to be in the bidding for a house – is likely to continue.
“Owning a house right now is the best situation you can be in. If you are in the position to own a home today, either free and clear or with a mortgage, you have security. That situation is going to continue as we see nothing on the horizon that will dramatically change that,” he said.
He said that offers little solace for first-time or income-limited potential home buyers trying to break into the market, placing more pressure on rental accommodations available in desirable locations easily accessible to shops, restaurants and entertainment options.
“You can’t build enough houses to accommodate the housing demands,” he said.
The Century 21 analysis revealed B.C. real estate remains the most expensive in the country. Prices in the outskirts of Greater Vancouver saw the largest price increases, with Chilliwack prices up 40 per cent, to $406 per square foot, while Delta was up 38 per cent, $570 per square foot, and White Rock/South Surrey up 44 per cent, $625 per square foot.
In the Okanagan, the analysis found Kelowna housing prices up anywhere between 20 and 30 per cent.
When the pandemic began in 2020, Rushton says the real estate market was entering unchartered territory.
“But because of low inventory and high demand from buyers looking for a larger space, prices have steadily climbed for the past year, particularly for detached homes outside of urban centres.
“That shifted as the year went on, with growth in home prices slowing and condo prices starting to increase again. It’s still a seller’s market from Victoria to St. John’s.”
Rushton said the Lower Mainland housing market continues to spark a chain reaction that impacts Interior communities.
For Kelowna, the buoyant real estate markets across Canada bring sellers here, as well as other Okanagan communities, looking for new properties, escalating the current housing supply-demand imbalance.
And Rushton said the potential for expanded immigration investment interest is a factor that has been muted so far by the pandemic, with an easing of restrictions rekindling the reality that despite “our complaints about taxes and that sort of thing,” Canada remains one of the best countries in the world to live.
“That influence is likely to be felt the most in the Lower Mainland, but it sets off a chain reaction down the line where people cash in and move elsewhere,” he said.
“The most immediate impact will be felt in places like Chilliwack, Langley and Hope, but Kelowna, being a resort community, will feel that impact, as will Penticton and Vernon probably to a lesser extent.”
But Rushton also cautions that the crystal ball for real estate predictions is never a sure thing.
“Sometimes that crystal ball looks more like a Scotch bottle as I’m not sure now how many times I have been wrong in looking ahead,” said Rushton, but still acknowledging the sales metrics for the real estate industry going forward looks to remain strong through next year as people seek to invest more in the places where they want to spend the most time.