B.C.’s housing market is not in a bubble. A bubble is when a buyers’ market appears and this is when the sales-to-listing ratio for MLS action falls below 12%. In that scenario only two areas of the province now favour buyers: The Kootenays, with a sale to listing ratio of 8.7%, and northeast B.C., where the ratio is 9.8%.
In Greater Vancouver and the Fraser Valley, the ratio is holding at around 30%, but it has dropped to below 12% for some higher price ranges in the city of Vancouver.
In Victoria, the ratio is over 25% and starting to trend even higher due to a lack of inventory.
- First of all, mortgage money is nearly free. The typical mortgage rate (after lender discounts) is now at a new all-time low of 2.5% for a five-year term – we have seen as low as 1.99% for 3-year money. When one considers that the average combined price in the Lower Mainland has increased 52% in the past 5 years, such low rates look like a great deal.
- Second, B.C. job creation through the first half of this year is leading all of Canada, at 3.6%, according to Statistics Canada. (This is the same growth level as in mid-2005). B.C. now has the lowest unemployment rate in Canada. (Economy in metro Vancouver growing by 6%.)
- Third, B.C. has strong population growth, with an increase in inter-provincial migration and immigration this year. In the 12-months ending April 1, B.C. welcomed 19,118 people from other provinces and 40,693 immigrants from other countries.
- Fourth, there is a shortage of homes for sale. Across the province, the total inventory of homes for sale was down 25.8% as of July and new housing starts in Metro Vancouver are trending slightly downward, especially for houses and townhomes.
Major Point: B.C. is and will remain a key global destination for investors and the most popular province for Canadians to retire in. We may see a (welcome?) breather in Metro Vancouver house sales and prices this year, but sales and prices will be higher again, both in Metro and in most of the province. Remember it took less than a year to reverse the sharp downturn following the financial crisis in 2008. COME TO OUTLOOK CONFERENCE FOR THE DETAILED FORECASTS:
Real Estate Outlook 2017 Conference on September 24.
24th year … 12 speakers – 25 sponsors
- 500 plus attendees – a mini convention
- 2 speakers from the US, one about New Mexico
- Listings/ deals and US financing experts Todd and Eric
- Best Canadian financing – Kyle
- Focus on outlook for lower mainland Ozzie, Rictoria, Charan
- Investment structure advice
- Where the deals are
- Best suburbs
- Best small towns
- Best US towns
- 9 astounding predictions (Ozzie predicted last fall that Trump would win)
- 2 for only $97
- Go to REoutlook.ca for more information or to sponsor, call 604-683-1111