B.C.’s housing market capped 2020 with record high home sales in December as buyers snapped up properties across the province.
Home sales reached 8,345 units, up 59% year over year, and 78% compared with the 10-year average for December. Seasonally adjusted sales rose 10% from November to 11,565 units to surpass the previous mid-2016 peak.
After a short early pandemic downturn, the market more than made up for lost time. Full-year sales rose 21.5% from 2019, albeit in part due to a modest 2019.
The frenzied pace reflects exceptionally low mortgage rates, space requirements as more individuals work from home and demand for domestic recreational homes. Increased remote work opportunities have raised demand for homes in suburban areas and in smaller urban centres. Pandemic-driven job losses have largely affected lower-income workers rather than higher-paid individuals more likely to be in the homeownership market. December’s surge was concentrated in the Lower Mainland-Southwest (anchored by Metro Vancouver), which rose 16% from November, while Vancouver Island sales rose 4.2%. Interior market sales slipped, while northern B.C. sales inched higher.
Annual sales growth surpassed 20% in the Lower Mainland-Southwest and Okanagan and came in just below 20% on Vancouver Island, highlighting the broad-based nature of the housing market strength.
Sellers’ market conditions prevail into 2021. While new listings rose, these were offset by higher sales and expiration of listings. Inventory fell to the lowest level since early 2018. This imbalance continues to lift prices. B.C.’s average price of $828,939 marked an 11.8% gain from a year ago. Sales composition has contributed to the outsized gains, but quality adjusted price indices still point to strong gains of about 6% in the Lower Mainland and on the Island and 10% in the Okanagan.
B.C. population growth slowed in most regions during 2020 on a July 1 basis, reflecting the pandemic’s early effects on international immigration inflows due to border restrictions from March onwards and to a lesser extent domestic mobility. Restrictions through the end of 2020 mean growth will remain subdued in 2021. •
Bryan Yu is chief economist at Central 1 Credit Union.