Photo: Derek Blackadder/Flickr
In November, BC home sales continued to climb thanks to a strong economy and buyers hitting the market ahead of tighter mortgage qualification rules coming into effect in the New Year.
A total of 7,731 homes sold in BC last month, an increase of 20.4 per cent from a year ago, according to the British Columbia Real Estate Association’s (BCREA) latest data release, published today.
November was the third consecutive month that BC home sales were above 9,000 units, on a seasonally adjusted basis.
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“The economy now is set for its fourth year of over 3 per cent real GDP growth. That’s led to pretty strong ripple effects. Employment is up 3.8 per cent over the last 12 months and that’s about 90,000 jobs,” Cameron Muir, BCREA’s Chief Economist, tells BuzzBuzzNews.
“All those things are helping to support housing demand and overall consumer confidence,” he adds.
Along with these economic foundations driving sales, Muir adds that a large Millennial cohort is entering its household forming years. In addition, the new stress test for uninsured mortgages that comes into effect on January 1 is likely contributing to the province’s boost in sales.
“There’s likely going to be some advance buying in lieu of what we’re going to see in terms of tighter mortgage qualifications in the New Year,” says Muir.
Greater Vancouver continued to be a sellers’ market last month, with a sales-to-active listings ratio of 30.2 per cent. Although supply is up in the region compared to a year ago, Muir says overall supply is trending near decade lows and is met with fierce demand.
“Given current levels of demand, Vancouver’s market is tighter today than it was a year ago [and has] much stronger sellers’ market conditions. And that’s primarily reflected by the extremely strong condominium market in which prices are being bid up as a result of multiple offers,” says Muir.
Last month, the Fraser Valley region saw a roughly 40 per cent year-over-year increase in sales with a total of 1,641 homes changing hands. With the Fraser Valley region consisting of mostly Metro Vancouver cities, Muir says the annual sales growth is not surprising as many buyers are looking for affordable options in the region.
The average price of a home in BC was $723,112 in November, a 15.5 per cent increase from a year ago.
Looking ahead to 2018, Muir says economic growth will ease but is slated to remain relatively strong. However, the BCREA economist says there are some headwinds in store that will impact overall demand, including modestly higher interest rates, the new mortgage qualifications and continued high prices.
“Overall sales activity next year likely is going to be down about 10 per cent, but still well above the 10-year average of about 85,000 units,” says Muir.