Historically low housing supply in British Columbia even as prices surge, report finds

The B.C. housing market is at an all-time low in terms of supply, even as home prices skyrocket, according to a report from the B.C. Real Estate Association.

This means potential homebuyers in and around Metro Vancouver are having to look past the suburbs of the Fraser Valley and move even further afield to find lower housing prices.

The report, published on Wednesday, showed an average home price increase of around 19 per cent year-on-year in the month of October. However, the number of houses listed dropped by an average of 40 per cent across the province.

Michele Matteazzi, a real estate agent with Sutton Group-West Coast Realty, said the Valley is experiencing an influx of buyers from the western part of the Lower Mainland, causing potential homebuyers in the area to move to other areas of the province.

"We've got a lot of movement out to Vernon. A lot of movement to Kelowna. Osoyoos, even," he said. "People are just kind of calling it quits on the Valley and going, 'This is ... this is too much.'"

Richelle Kendall, who is moving from Abbotsford to Vernon, said her house in the Valley sold before she had even finished listing it.

"I was floored when ... before we had even listed our house, I had five text messages from people in the area that knew we were selling," she said. 

"[The messages were] saying, 'Hey, can we come look at the house? Can you send me some details? What are you guys listing for?'"

Report showing dearth of supply

Brendon Ogmundson, chief economist at the B.C. Real Estate Association and the author of the report, said housing supply simply isn't matching demand.

"We put out some research a while ago showing, you know, how many buyers there were for every seller," he said. "Markets on the island, in some places we had, we were estimating nine buyers per seller. In the Fraser Valley, it's like seven buyers per seller."

"So no surprise — you get a lot of multiple offer situations, and in those situations you're going to get rising prices."

Ogmundson says the province-wide relocation taking place among homebuyers, due to prices, is also reflective of different working habits now that the pandemic has made remote working more viable.

He says Chilliwack, for instance, saw a rise in demand from those only needing to go to their Vancouver workplaces occasionally.

Vancouver Island and the Okanagan, however, saw an increase in demand from those working remotely or planning to retire.

Those regions, despite seeing an average price increase of 26 per cent per home this October compared to last year, had a 47 per cent drop in the number of homes listed.

"It takes a long time to rebuild inventory back to a healthy level that'll help to moderate price growth," he said.

"There's no obvious policy lever to pull for the government. You can't really incentivize or force people to list their homes. So the only real solution longer-term is just to build a lot more housing."

Ogmundson says building fewer large single detached houses and more multi-unit houses, as well as tailoring houses for millennials looking to settle down, would help absorb some of the surging demand from homebuyers.