B.C. housing market failing to match inward migration

New numbers suggest the B.C. housing market is failing to keep pace with inward migration, presenting investors with the kind of opportunity many thought was lost.

“There are 40,000 people moving to B.C. every year, mostly from overseas,” says Ozzie Jurock of Jurock Case Real Estate Action Group.

“That in turn, according to CMHC, creates a household formation of 30,000 units that we need to have every single year, either in rental values or new ownership. In the lower mainland alone, we have 19,090 new households formed, and it is expected to increase at that rate to 2018.”

The BCREA’s monthly data predicts housing starts to be slightly below 30,000 units in 2015, at 28,700, while residential sales are forecast to increase 1.2 per cent to 84,900 units in 2015.

“Consumer demand has ratcheted up this year and is expected to remain at a more elevated level through 2015,” said Cameron Muir, chief economist at BCREA.

“While historically low mortgage rates support demand, the housing market is also being underpinned by a more robust economy and associated job growth, strong net migration and consumer confidence."

B.C. areas that saw significant increases in housing sales year-over year were Chilliwack, (up 31 per cent), Victoria (up 21.9 per cent), the Kootenay (up 19.4 per cent), the Fraser Valley (up 16.3 per cent), Vancouver (15.4 per cent) and Okanagan Mainline (14.4 per cent).

Chilliwack, Fraser Valley, Kamloops and Victoria also saw a rise in housing prices. The average price across B.C. was $575,504, up from $540,432 last year.

“We have also seen some pricing increases,” adds Jurock. “Those price increases, generally, are limited to the big cities.

"CREA pointed out that some 60 per cent of the price increases in Canada have taken place in Toronto and Vancouver.”