As of the end of February, the average price of a BC home was $866,583, up by $126,000 over the same time a year ago.
That increase equates to a 17 percent annual increase, a pace that a Central 1 Credit Union economist calls “astounding.”
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In a research note published earlier this month, the credit union’s Deputy Chief Economist Bryan Yu explained that a combination of record demand and low supply are propelling BC home prices skyward. February’s gain represents the highest percentage increase recorded since 2017.
Yu writes that some local markets outside of Greater Vancouver are recording even stronger price growth than the province-wide figure. According to data from the British Columbia Real Estate Association (BCREA), Powell River, Kootenay, Chilliwack, Fraser Valley and Victoria all posted home price increases well north of 20 percent in February thanks to remarkable demand for suburban detached homes.
“The near unbelievable strength in this market continues to be shaped by the pandemic era as demand is bolstered by low borrowing costs, elevated savings, steady employment among higher wage earners, and shift in preferences away from high density living,” Yu wrote.
Echoing RBC Senior Economist Robert Hogue’s commentary from earlier this month, Yu warned that panic could be setting in among homebuyers who are rushing to get into the “rapidly accelerating market” and overbidding on homes in the process.
Looking ahead, however, Yu believes that an eventual return to offices and general economic normalization later this year will push buyers back to urban centres. This, in turn, will moderate buyer demand as incomes are reallocated to other spending and individuals have less time to search for homes, he wrote.