Photo: Brian Burger/Flickr
The supply of homes for sale in BC have fallen a staggering 50 per cent over the past five years, putting more upward pressure on home prices.
Last month, the province’s total active listings fell 11 per cent from May 2016, while the sales-to-active listings was over 20 per cent in nine of BC’s 11 real estate boards, according to the British Columbia Real Estate Association’s (BCREA) May 2017 data release published today.
Meanwhile, the province’s average home price saw a four per cent year-over-year increase to $752,536 in May — largely driven by sustained demand in the southern portion of the province.
“At least in the near term, certainly without a substantial increase in the number of homes for sale, reduction in demand, or both, we’re going to see a continued rise in home prices,” BCREA Chief Economist Cameron Muir tells BuzzBuzzNews.
A lack of inventory combined with fierce demand is evident in Vancouver, the Fraser Valley, Chilliwack and Victoria, as each area recorded a sales-to-active listing ratio over 50 per cent in May. Victoria had the highest ratio out of all boards with 71 per cent.
With a surge in demand over the past couple of years, Muir says the housing stock in these areas simply can’t keep up.
“While we see a significant amount of construction — in Vancouver for example, there are over 35,000 units under construction right now — unfortunately most of those are large condominium projects which take several years from conception to completion,” says Muir.
In the northern portion of the province, demand is nowhere as strong but prices are steadily rising.
“We’re still seeing prices in the north climbing at around five per cent year-over-year growth. So, the north is more of a steady as she goes, whereas the southern half of the province including the Okanagan, the Kootenay, Vancouver Island and the Lower Mainland, we’re seeing a lack of supply and some pretty strong overall consumer demand,” says Muir.
In May, a total of 12,402 residential properties sold in the province, down roughly eight per cent from the same period last year.
The total sales dollar volume was $9.33 billion in May, a four per cent drop from May 2016.
Despite the rise in BC’s year-over-year average sales price in May, year-to-date average home prices are down almost six per cent to $709,541compared to the same period in 2016.
Meanwhile, the sales dollar volume dropped by 25.2 per cent to $30.6 billion and residential unit sales fell 20 per cent to 43,158 units.