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BCREA 2021 Fourth Quarter Housing Forecast: Strong Market Activity to Continue in 2022

Third Quarter – August 2021


The pace of home sales in the province has slowed in recent months but an unprecedented start to the year still has BC on track for a record-breaking year.


An expected second-half slowdown has arrived, prompted by eroding affordability and a tightening of mortgage qualification rules. However, with the BC economy on track for very strong growth this year and next, along with the eventual return of normal migration flows, home sales are anticipated to remain well above long-run average levels into 2022.


Canadian mortgage rates have remained stable after rising from all-time lows earlier this year. At an average of just 2.14 per cent for a 5-year fixed rate and under 1.5 per cent for a variable rate, borrowing costs continue to be highly supportive of housing market activity. That said, the implementation of a new stress test rate, which is now the higher of a borrower’s contract rate plus 200 basis points and 5.25 per cent for both insured and uninsured mortgages, has likely taken some demand out of the market. Even with sales moderating slightly in the second half of this year, we are forecasting that home sales in 2021 will set a new record of 118,350 units before slowing to 100,150 units in 2022.


With strong demand being supported by low mortgage rates and a rapidly rebounding post-COVID economy, the more significant concern is whether there will be an adequate supply of listings in the market. The supply situation is especially severe in markets outside the Lower Mainland, where new listings activity has been lacklustre. Even if sales come back down to long-run average levels, total listings would need to nearly double to bring markets back into balance. Prices are under significant upward pressure due to extremely tight market conditions, while buyer preferences are still tilted toward extra space and larger homes. As a result, the average price in 2021 is on track to post a second consecutive year of double digit gains. We are forecasting the provincial average price to rise 16.6 per cent to $911,300 this year, followed by a 2.9 per cent gain next year to $937,300.


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Provided By: BCREA

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

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Canadian housing starts trended lower in September

The trend in housing starts was 271,068 units in September 2021, down from 284,757 units in August 2021, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.


“The six-month trend in housing starts declined from August to September, with total starts continuing to pull back from their earlier 2021 levels,” said Bob Dugan, CMHC's chief economist. “Single-detached and multi-family SAAR starts were both lower in Canada’s urban areas in September, which led to a decline in overall SAAR starts for the month. On a trend and monthly SAAR basis, however, the level of housing starts activity in Canada remains high in historical terms. Among Vancouver, Toronto and Montreal, Vancouver was the only market not to register growth in total SAAR starts in September, due to a decline in the multi-family segment.”


CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations, analyzing only SAAR data can be misleading, as the multi-unit segment largely drives the market and can vary significantly from one month to the next.


The standalone monthly SAAR of housing starts for all areas in Canada was 251,151 units in September, a decrease of 4.4% from 262,754 units in August. The SAAR of urban starts decreased by 4.5% in September to 223,055 units. Multiple urban starts decreased by 4% to 165,861 units in September, while single-detached urban starts decreased by 5.9% to 57,194 units.


Rural starts were estimated at a seasonally adjusted annual rate of 28,096 units.


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Provided by: CMHC

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Canadian home prices continue to re-accelerate in September

Statistics released today by the Canadian Real Estate Association (CREA) show national home sales edged up between August and September 2021.

Highlights:


  • National home sales rose 0.9% on a month-over-month basis in September.
  • Actual (not seasonally adjusted) activity was down 17.5% on a year-over-year basis.
  • The number of newly listed properties declined by 1.6% from August to September.
  • The MLS® Home Price Index (MLS® HPI) rose 1.7% month-over-month and was up 21.5% year-over-year.
  • The actual (not seasonally adjusted) national average sale price posted a 13.9% year-over-year gain in September.

Home sales recorded over Canadian MLS® Systems were up 0.9% between August and September 2021, marking the first monthover-month increase since March.


The actual (not seasonally adjusted) number of transactions in September 2021 was down 17.5% on a year-over-year basis, from the record for that month set last year. That said, it was still the second-highest ever September sales figure by a sizeable margin.


“September provided another month’s worth of evidence from all across Canada that housing market conditions are stabilizing near current levels,” said Cliff Stevenson, Chair of CREA. “In some ways that comes as a relief given the volatility of the last year-and-a-half, but the issue is that demand/supply conditions are stabilizing in a place that very few people are happy about. There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging. That’s why your best bet is to consult with your local REALTOR® for information and guidance about navigating the current market,” continued Stevenson.


“The small changes observed in most key housing market metrics over the last couple of months suggest that the worst of the pandemic-related volatility we’ve experienced since last spring is in the rear-view mirror at this point,” said Shaun Cathcart, CREA’s Senior Economist. “Having said that, given we are still stuck at around 2 months of inventory nationally, the thing to keep a close eye on going forward will be the behaviour of prices. While the acceleration in home prices we saw in September was more than most would have expected, the fact that prices are now moving back in that direction is not surprising.”


The number of newly listed homes fell by 1.6% in September compared to August, as gains in parts of Quebec were overwhelmed by declines in the Lower Mainland, in and around the GTA and in Calgary.


With sales up and new listings down in September, the sales-to-new listings ratio tightened to 75.1% compared to 73.2% in August. The long-term average for the national sales-to-new listings ratio is 54.8%.


Based on a comparison of sales-to-new listings ratio with long-term averages, a small but growing majority of local markets are moving back into seller’s market territory. As of September it was close to a 60/40 split between seller’s and balanced markets.


There were 2.1 months of inventory on a national basis at the end of September 2021, down slightly from 2.2 months in August and 2.3 months in June and July. This is extremely low and indicative of a strong seller’s market at the national level and in most local markets. The long-term average for this measure is more than 5 months.


In line with tighter market conditions, the Aggregate Composite MLS® Home Price Index (MLS® HPI) accelerated to 1.7% on a month-over-month basis in September 2021.



The non-seasonally adjusted Aggregate Composite MLS® HPI was up 21.5% on a year-over-year basis in September, up a bit from the 21.3% year-over-year gain recorded in August. (Chart B)


Looking across the country, year-over-year price growth is creeping up above 20% in B.C., though it is lower in Vancouver, on par with the provincial number in Victoria, and higher in other parts of the province.


Year-over-year price gains are in the mid-to-high single digits in Alberta and Saskatchewan, while gains are into the low double-digits in Manitoba.


Ontario saw year-over-year price growth pushing 25% in September; however, as with B.C. big, medium and smaller city trends, gains are notably lower in the GTA and Ottawa, around the provincial average in Oakville-Milton, Hamilton-Burlington and Guelph, and considerably higher in many of the smaller markets around the province.


Greater Montreal’s year-over-year price growth remains at a little over 20%, while Quebec City is now at 13%. Price growth is running a little above 30% in New Brunswick (higher in Greater Moncton, a little lower in Fredericton and Saint John), while Newfoundland and Labrador is now at 12% year-over-year (a bit lower in St. John’s).


The MLS® HPI provides the best way to gauge price trends because averages are strongly distorted by changes in the mix of sales activity from one month to the next.


The actual (not seasonally adjusted) national average home price was $686,650 in September 2021, up 13.9% from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from the calculation in September 2021 cuts over $146,000 from the national average price.


Provided by: CREA

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Top 10 September 2021

I am greatful for each and everyone of my clients as their support  and trust in me has enabled me to be succesful in my real estate business, thank you! Congrats to all the other top 10 realtors. 

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Record-Low Supply Keeps Market Conditions Tight in September

The British Columbia Real Estate Association (BCREA) reports that a total of 9,164 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in September 2021, a decrease of 19.9 per cent from September 2020. The average MLS® residential price in BC was $913,471, a 14 per cent increase from $801,241 recorded in September 2020. Total sales dollar volume was $8.4 billion, an 8.6 per cent decline from last year.


“Home sales have settled at levels that are slightly above long-term average,” said BCREA Chief Economist Brendon Ogmundson. “The main story in all markets continues to be a severe lack of listings supply, particularly in Fraser Valley, Vancouver Island and Interior markets.”


Total active residential listings were down 36.8 per cent year-over-year in September for the province as a whole and were more than more than 50 per cent below last September’s levels in the Fraser Valley and Victoria.


Year-to-date, BC residential sales dollar volume was up 81.8 per cent to $90.4 billion, compared to the same period in 2020. Residential unit sales were up 52.4 per cent to 99,182 units, while the average MLS® residential price was up 19.3 per cent to $911,195.


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Provided by: BCREA

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Just Sold: 842 Runnymede Ave., Coquitlam, Coquitlam West


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Elevated home sale activity continues to outstrip the supply of  homes for sale in Metro Vancouver

Home sale activity remains elevated across Metro Vancouver’s* housing market while the pace of homes being listed for sale continues to follow long-term averages.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,149 in September 2021, a 13.6 per cent decrease from the 3,643 sales recorded in September 2020, and a 0.1 per cent decrease from the 3,152 homes sold in August 2021.

Last month’s sales were 20.8 per cent above the 10-year September sales average.


There were 5,171 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in September 2021. This represents a 19.2 per cent decrease compared to the 6,402 homes listed in September 2020 and a 28.2 per cent increase compared to August 2021 when 4,032 homes were listed.


September’s new listings were 1.2 per cent below the 10-year average for the month.


“The summer trend of above-average home sales and historically typical new listings activity continued in Metro Vancouver last month. Although this is keeping the overall supply of homes for sale low, we’re not seeing the same upward intensity on home prices today as we did in the spring,” Keith Stewart, REBGV economist said. “Home price trends will, however, vary depending on property type and neighborhood, so it’s important to take a hyperlocal look at your location and property category of choice before making a home buying or selling decision.”


The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,236. This is a 29.5 per cent decrease compared to September 2020 (13,096), a 2.6 per cent increase compared to August 2021 (9,005) and is 27.7 per cent below the 10-year average for the month.


For all property types, the sales-to-active listings ratio for September 2021 is 34.1 per cent. By property type, the ratio is 25.5 per cent for detached homes, 53.1 per cent for townhomes, and 36.7 per cent for apartments. Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.


“The total inventory of homes for sale remains insufficient to meet the demand in today’s market. This scarcity limits peoples’ purchasing options and ultimately adds upward pressure on home prices,” Stewart said. “With the federal election now behind us, we hope to see governments at all levels work with the construction industry to streamline the creation of a more abundant and diverse supply of housing options.”


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $ 1,186,100. This represents a 13.8 per cent increase over September 2020 and a 0.8 per cent increase compared to August 2021.


Sales of detached homes in September 2021 reached 950, a 27.9 per cent decrease from the 1,317 detached sales recorded in September 2020. The benchmark price for a detached home is $1,828,200. This represents a 20.4 per cent increase from September 2020 and a 1.2 per cent increase compared to August 2021.


Sales of apartment homes reached 1,621 in September 2021, a 1.6 per cent increase compared to the 1,596 sales in September 2020. The benchmark price of an apartment home is $738,600. This represents an 8.4 per cent increase from September 2020 and a 0.5 per cent increase compared to August 2021.


Attached home sales in September 2021 totalled 578, a 20.8 per cent decrease compared to the 730 sales in September 2020. The benchmark price of an attached home is $963,800. This represents a 17.5 per cent increase from September 2020 and a 1.2 per cent increase compared to August 2021.


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Provided by: REBGV

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Reciprocity Logo The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.