After a slight dip in market activity in September, British Columbia’s resale home market activity rose for a second consecutive month in November as sales and new listings increased 1.7 per cent and 5.1 per cent respectively.
Despite more new listings market conditions remained very tight. Months of supply fell to 1.8 months in November from 1.9 months in October and the sales-to-new-listings-ratio (SNLR) came in at a stellar 74.1 per cent and well in the range of a sellers’ market.
The average price continued to climb in November moving up an additional 2.2 per cent to $987,352 adding to the 3.2 per cent gains posted in October.
Like other parts of Canada, buyers remain very active in the market as they try to get ahead of expected mortgage rate hikes. Increased competition in the market is lifting prices and eroding affordability quickly. First-time buyers, without financial supports from family or above average incomes, are increasingly finding it difficult to move from rental or the family home to purchase their first home.
Year-to-date, measures were significantly ahead of last year’s pace with sales and new listings up 39.4 per cent and 13.8 per cent respectively. Average price is ahead of last year’s pace by 17.4 per cent.
Sales increased in all eight out of 12 regions, with declines in Chilliwack (down 15.7 per cent), Kamloops (down 1.3 per cent), South Okanagan (down 7.1 per cent), and Victoria (down 1.1 per cent). The impact of B.C. floods in markets across the province curtailed activity in November and likely into December. Fewer sales in these areas were offset by gains in the rest of the province.
B.C. housing starts edged slightly higher in November. Annualized housing starts in urban areas reached a seasonally- adjusted 35,660 units during the month up 10 per cent October’s pace of 32,444 units. The devastating floods in B.C. largely affected smaller urban and rural areas and had minimal direct effects on urban housing starts, although likely paused activity in surrounding areas. November’s gain owed largely to a 14 per cent increase in multi-family which increased to an annual pace of 28,500 units while single-detached starts held steady.
Despite the increase, B.C. housing starts have slowed considerably from the robust pace in the summer months when monthly starts averaged a pace of about 50,000 units. A decrease in the pace of multi-family starts contributed to this pull back. With resale market conditions robust and prices rising, the decline likely reflects a combination of coincidence of timing of major project starts, shortages of labour and high material costs, and elevated units under construction. Retrenchment has largely occurred in the Metro Vancouver area.
Through the first 11 months, housing starts rose 24 per cent in urban areas to 39,176 units and roughly in line with the record setting pace of 2019 Both single-family starts (up 18 per cent) and multi-family starts (up 25 per cent contributed to the increase). Year-to-date urban starts have already surpassed 2020 full- year performance by 12 per cent.
Among metro areas, Metro Vancouver starts rose 18 per cent, Victoria starts rose 45 per cent, and Kelowna was up 50 per cent. Abbotsford- Mission starts fell 16 per cent. Growth outperformed in smaller urban areas and rural markets. The recent lull in activity means starts may fall short of the 2019 record but remain exceptionally strong. Inclusive of rural areas, annual housing starts are forecast to average near 45,000 units annually through 2024 as population growth accelerates.
Bryan Yu is chief economist at Central 1 Credit Union.
