An exodus from Metro Vancouver has jacked up home prices in other areas of the province.
As the 2022 spring housing market gets underway, the chief economist with the B.C. Real Estate Association (BCREA) wants to see how this phenomenon evolves.
“We’re still seeing migration patterns out from Metro Vancouver into other parts of the province, and that’s really driving demand in those markets,” Brendon Ogmundson told the Straight in a phone interview.
Between the past two censuses, people were moving out of the Lower Mainland for other places in B.C. at an average rate of more than 1,000 each month.
Based on the official tally by Statistics Canada, a total of 12,245 residents left the region from July 1, 2020, to the most recent count on July 1, 2021.
Ogmundson noted that people normally list a home and then buy in the same area, resulting in an offset between supply and demand.
What has happened (and seems to be continuing) is that property owners in Metro Vancouver take advantage of high housing prices in the region and then buy elsewhere.
“The issue is that all of that demand doesn’t bring in any associated supply in those markets,” Ogmundson said.
He cited Chilliwack as one example.
Between July 1, 2020, and July 1, 2021, a total of 2,286 people from elsewhere in B.C. settled in the census area of Chilliwack, which includes places like Kent and Harrison Hot Springs.
In addition, 422 people from outside B.C. came in, while 17 immigrants from other countries arrived.
Based on official figures from the BCREA, the average price of all homes in Chilliwack as of the end of December 2021 rose to $837,772.
This marks a 41.3 percent year-over-year increase compared to the average price of $592,881 in December 2020.
Meanwhile, active home listings in Chilliwack numbered only 264 at the end of December 2021.
That’s a 40.8 percent decrease compared to 446 in the same month in 2020.
Ogmundson also mentioned Victoria.
Between the last two enumerations by Statistics Canada, the census metropolitan area, or CMA, of Victoria—which includes places like Saanich, Langford, and Esquimalt, among others—gained 1,664 new residents from intraprovincial migration.
With regard to housing, the average price in Victoria at the end of December 2021 increased to $1,023,241.
That’s an annual growth of 32.9 percent from the December 2020 average price of $769,941.
Meanwhile, 2021 ended in Victoria with just 421 active home listings. That’s a 53.3 percent drop from the 902 listings in December 2020.
As for the rest of Vancouver Island, the average price increased year-over-year by 39.3 percent, from $517,203 to $720,345.
The same pattern can be seen in other places in B.C.
In Kamloops, the average price of homes in December 2021 increased to $631,657.
This represents a 33.8 percent markup from $472,131 in December 2020.
In Powell River, the average price increased 45.7 percent year-over-year, to $561,582 in December last year.
“What I’m looking for over the next year is kind of a break in those patterns: are we going to see the same amount of demand in places like Chilliwack?” BCREA’s Ogmundson said.
Earlier this year, the real estate association reported that 2022 started with a record low of 12,179 January home listings across the province.
“For context,” the BCREA noted in another report the following month, “a healthy level of re-sale listings for the province is closer to 40,000 listings.”
Because of this “listings drought, markets all over the province are seeing significant upward pressure on prices”.
Ogmundson noted that home listings have recently picked up in markets served by the real estate boards in Greater Vancouver and the Fraser Valley.
The question now is whether or not sellers are going to buy in the same markets.
Ogmundson feels that the exodus from Metro Vancouver may continue.
“I think a lot of the people that are listing are going to other places around the province,” he said.
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Source: Georgia Straight