GUEST SUBMISSION: On the heels of record levels of new and pre-owned housing deals last year, B.C.’s residential real estate market is poised for more of the same in 2022. We can expect the coming months to include exacerbated affordability challenges brought on by inflation and continued escalating prices in the face of constrained multifamily supply.
In Metro Vancouver, and other communities around the province, demand to buy a home remains at record highs, while inventory — meaning listings available — are low. Add rising construction prices and supply-chain challenges, and signs are pointing to higher housing prices in 2022.
But there are shifts taking place in B.C.’s housing market that are influencing where people are purchasing homes, and the types of homes they need and want.
The changes are guided and complicated by the ongoing pandemic and will increasingly see demand rising for new multifamily projects in emerging centres such as Kelowna, Kamloops, Langford and Penticton.
The effects will also be felt in smaller or suburban Metro Vancouver communities as buyers embrace remote working and opt to leave behind bid frenzies in the expensive central urban resale markets.
Given this reality, more Canadians are abandoning the big city life in favour of more affordable locales while maintaining their big-city jobs.
Smaller cities to capitalize on shifting buying habits
We can expect more investors and developers of new multifamily projects to secure sites and projects in those areas, bringing newfound growth and economic vitality.
As young people continue this regional shift and seek to put down roots in communities outside of Metro Vancouver, we’ll also see those communities benefit from new spending, creativity, investment and business creation in the coming months and years.
For example, Langford has seen a huge growth in population in recent years with the city’s mayor, Stewart Young, pushing for more projects in the downtown core to meet the demand.
This trend throughout the Capital Region will likely continue. Recent B.C. Assessment figures show condo home valuations on Vancouver Island, Kamloops and other secondary markets are rising quickly, while still remaining a value play for post-urban buyers.
Despite the obstacles presented by the pandemic, in concert with lack of supply, instability and rising appreciation, there is a desire for young professionals and young families to put down roots outside of Metro Vancouver and those communities are eager to meet their needs. That’s not a bad thing.
Metro Vancouver development accelerates, but it’s not enough
Meanwhile, despite a decline in new builds in 2020, new multiresidential construction increased by 65 per cent year-over-year in 2021 to just under 13,800 units — accounting for 90 per cent of the total new home starts in Metro Vancouver.
Rising demand in Metro Vancouver is guiding developers to market new multifamily projects at an accelerated pace. This is a welcome shift that gives buyers who would otherwise be priced out of the resale and single-family home market an opportunity to buy a home — but it’s not enough to meet demand.
There is an expected 23,000 new homes set to start in 2022, but (much-needed) rising immigration levels mean demand for homes in Metro Vancouver is certain to once again outweigh the supply in the region in both new and pre-sale and pre-owned markets.
The B.C. Real Estate Association reports 2022 started with the lowest number of homes for sale in the market while demand from local, national, and international buyers continued to grow. Given strong demand and very low active listings, prices are forecast to rise about three per cent in 2022.
While not as torrid as 2021, this year could prove to be a strong year for home sales in B.C.
The region continues to be a real estate hotspot with interest from national and international buyers alike, and Vancouver is expected to remain a seller’s market in 2022.
W. Scott Brown is the executive leader representing Toronto-based Peerage Realty Partners, including Greater Vancouver’s Fifth Avenue Real Estate Marketing, Kelowna-based Epic Real Estate Solutions, BakerWest Real Estate in Vancouver and The Condo Group in Victoria.