Photo: Brian Burger/Flickr
British Columbia’s second largest and fastest growing city, Surrey, is slated to lead the province in residential real estate investment over the next five years.
According to the Real Estate Investment Network’s (REIN) report on the 10 top BC cities for housing market growth, Surrey tops the list because of a booming economy and strong population growth.
“With more than 16,800 active businesses across a wide array of industries and a six per cent growth in businesses in 2016 over 2015, Surrey is a city to watch for economic development and growth,” writes REIN in its report, published on Sunday.
The research and analysis firm chose the 10 real estate markets that are expected to outperform, based on fundamental economic and demographic drivers, along with current market influencers.
Surrey was not the only community in the Fraser Valley region to make REIN’s list. The City of Abbotsford ranked in second.
Over the next five years, Surrey’s real estate market is expected to thrive thanks to its diverse economy and growing population, says REIN. On average, 1,000 new residents come to Surrey each month and the city’s population is set to surpass Vancouver’s by 2041.
Fraser Valley Real Estate Board (FVREB) President Gopal Sahota, isn’t surprised by Surrey’s top rank and says the city’s booming economy is attracting buyers.
“They’ve taken a very aggressive approach on creating jobs. They’ve partnered up with Simon Fraser University and come up with innovative programs,” Sahota tells BuzzBuzzNews.
People are also moving to Surrey and other Fraser Valley communities because of the affordable home options relative to neighbouring Metro Vancouver, says Sahota.
Demand in the region is evident in the board’s latest data release, published last week, which shows that sales are on the rise.
Housing Market News Alerts
Sign up now for news alerts on the Vancouver housing market
Last month, almost 1,800 homes changed hands in the region, up 23 per cent compared to a year ago and an 11 per cent increase from September 2017, according to FVREB.
The board tracks real estate transactions in North Delta, Surrey, White Rock, Langley, Abbotsford and Mission.
With ongoing demand for condos and attached homes, sales in October reached the second highest level for the month throughout the board’s 96-year history.
“Apartment activity was notably strong in October with a sales-to-actives ratio of 105 per cent, meaning that apartments are selling as fast as we can list them,” Sahota says in a statement, accompanying the board’s data release.
However, strong demand has been met by limited supply in the region. Last month, inventory fell 6.3 per cent month-over-month and dropped 9 per cent compared to a year ago.
Increased demand and low supply is causing prices to climb, says Eric Bond, Canada Mortgage and Housing Corporation’s (CMHC) Principal, Market Analysis for Vancouver.
“Until the supply of homes is able to catch up with some of the demand, we expect to continue to see that strong price acceleration,” Bond tells BuzzBuzzNews.
Last month, the benchmark price for a townhome in the region was $502,800, up 18 per cent compared to a year ago. Meantime, the benchmark price for a condo was $369,400, an increase of 36 per cent from October 2016.
Although prices are rising across the Fraser Valley, Bond agrees with REIN that Surrey has strong growth potential, due to less expensive home options and a growing population.
“We are expecting about 4,500 new households to be formed in Surrey each year for the next five years. So that kind of forms your baseline of housing demand and those households will need a place to live,” says Bond.