B.C.’s home market recorded fewer sales in September after an August uptick, but the key theme remained robust demand and a severely undersupplied market that could reignite price growth.
Total Multiple Listing Service (MLS) sales slipped 1.9% from August to a seasonally adjusted 8,783 units, led by declines in the Lower Mainland-Southwest and northern B.C. While down 19% on an unadjusted basis from September 2020, this largely reflected high base-period effects. In a comparison with pre-pandemic years, sales were up 32% from 2019 and almost identical to the previous record set in 2005.
Investor demand is likely percolating amid the return of students, travel and expected surge in immigration. Sales are still 26% above pre-pandemic February 2020, led by the Lower Mainland-Southwest and Vancouver Island. If anything, sales are being constrained by insufficient inventory as buyers scramble for the scraps, while rising prices push more prospective buyers out of the market.
New listings fell 1.6% on a seasonally adjusted basis and same-month listings were down 21% from 2020. Active listings are at the lowest level going back to at least 2000 in the province and down 36% year over year.
The hottest markets are the Fraser Valley and Vancouver Island.
With demand remaining relatively elevated, low inventory will continue to put upward pressure on prices in the winter months in the absence of a surge in inventory.
B.C.’s construction sector remained a key driver of the economic recovery into August. Investment in building construction on new projects and renovations reached a seasonally adjusted $2.8 billion. This marked a 6.3% increase from same-month 2020; adjusted for construction costs, activity rose 3.2%. Consistent with trends in building permits and housing starts, growth largely reflects the booming housing market while non-residential construction wilted.
Metro Vancouver construction rose 1.5%, with gains much stronger in Kelowna (up 74%), and Victoria (up 47%). That said, about half of the increase came outside the large metro markets as housing demand surged among smaller urban and rural markets. •
Bryan Yu is chief economist at Central 1 Credit Union.
