In April of 2018, the Financial Post stated that home sales throughout British Columbia plummeted in March compared to 2017; the 24.6 % decline was attributed to the new mortgage qualification rules which have curbed housing demand. Still, B.C. home sales reached $5.39 billion, which represents a 20.6% fall over March 2017. And average home prices continue to increase, reaching just over $732,000 in the first quarter of 2018 – and remain the highest in the nation.
Why is B.C. such a trendy place to own property? There are several theories: its connection to the Pacific makes it a desirable area for Asian immigrants, contributing to cultural diversity; the mild winters are an attraction for those tired of the snow but who don’t want to leave Canada; there is a high standard of living with high wages and employment benefits and low crime rates. And all of this is driving up the cost of housing throughout the province.
The real estate market in most large cities, especially in Vancouver and Victoria, is ruled by high-prices homes that are simply out of reach for most residents, with home price-income gaps near or even over $100,000. The recent decrease in sales can be mostly blamed on the lack of affordable housing; most homes in metro Vancouver are listed at over $1 million, meaning that the average family cannot qualify for mortgages on detached homes, and in some areas, not even townhomes or apartments. Residents unable to find homes within the highest-prices areas are moving into suburban and more rural areas, increasing their population and the demand for housing in those areas – which in turns limits the availability of affordable housing and continues the cycle.
There is a high demand for more affordable housing in the metropolitan areas, but until dramatic changes come about in either the real estate market or the median family income, most families find themselves forced to rent. Currently, cities like Vancouver would need to approve large-scale housing developments of lower-priced homes – which is highly unlikely to happen; the more frightening alternative would be for the real estate market to crash as happened in Las Vegas in 2008.
Whatever the solution, is seems the demand for affordable housing province-wide must be met soon, or BC residents may leave the province in droves, seeking homes more within their means elsewhere in the country.