The average price of a detached house in Greater Vancouver will hit a record high of $1.7 million in 2021, according to a forecast released November 4 by the B.C. Real Estate Association (BCREA), which also calls for all-time high house prices next year in the Fraser Valley.
That price has already been reached in the City of Vancouuver, where it is not uncommon to detached houses listed for $2 million for more, but the BCREA forecast is for suburban prices to soon catch up.
“The single-family market seen a marked increase in demand as buyers search for extra space during the pandemic,” according to the BCREA, which added that a lack of inventory will keep prices rising.
The coronavirus has delivered a shot-in-the arm stimulus to the Metro Vancouver housing market, based on BCREA data.
In pre-pandemic 2019, total Metro-region housing sales were down about 1 per cent from a year earlier in the Fraser Valley and up a modest 2.3 per cent in Greater Vancouver. But housing sales have soared 20 per cent this year in the Metro region and are up 22 per cent in the Valley. Detached houses are leading the sales and price curve in both markets.
“As a result of tight market conditions and increased demand for more expensive single-family homes, average prices across the Lower Mainland are at, or near, record highs,” the BCREA stated.
“Without a sharp rise in inventory, there will be sustained upward pressure on home prices over the next year,” added Brendon Ogmundson, chief economist at the BCREA.
By this time in 2021, the association expects the average Fraser Valley detached house will be selling for $1.15 million, a new high, and up nearly 8 per cent from pre-pandemic 2019. In Greater Vancouver, detached house prices will increase 4.5 per cent this year, compared to 2019, to $1.65 million and jump a further 3 per cent to reach $1.7 million in 2021, the BCREA forecasts.
The low inventory is both due to a lack of listings and drop in housing starts, which have fallen nearly 20 per cent from a year ago, to around 21,000 units.
The total number of homes currently listed for sale in Metro Vancouver is 12,416, a 1.5 per cent increase compared to October 2019, but a 5.2 per cent decrease compared to September 2020, reports the Real Estate Board of Greater Vancouver.
In the Fraser Valley, October finished with 6,872 active listings, a decrease of 6.8 per cent compared to September and down 7.1 per cent year-over-year.
“The situation is unprecedented. We are in the middle of a pandemic yet in many communities we are seeing a strong seller’s market for townhomes and single-family homes. For example, in Langley, our current supply of detached homes would sell in 1.4 months if no new listings became available. And for Mission townhomes, we have zero months of inventory,” said Chris Shields, president of the Fraser Valley Real Estate Board.
“The unusual nature of this recession means that rather than a rapid accumulation of inventory, active listings declined through the spring and have remained low through the summer and fall,” Ogmundson explained.
Meanwhile, Greater Vancouver home sales this year are running 50 per cent ahead of pre-pandemic levels, he noted.
The BCREA forecasts that housing sales in Greater Vancouver will reach 31,000 sales this year before rising to 35,000 transactions in 2021. It expects a 23 per cent increase in Fraser Valley sales in 2020 followed by a 13 per cent increase in 2021 to 20,300 sales.