The Vancouver housing market has received a great deal of attention lately, with strong growth in sales and prices throughout the first half of 2015. However, these headlines often mask a broader strength that is being seen across the province, as markets that have not performed as well in recent years are seeing steady sales and price growth. This article highlights individual real estate markets across the province of BC.
Key Points to BC’s Housing Market in 2015
- It is no longer a Vancouver-centric story, with markets in the interior and on the island showing strength. In fact, BCREA reports that sales for 2015 are up 16.6% year-to-date across British Columbia
- Months inventory is falling in almost all the markets examined in this analysis
- Strong economic growth is drawing in migrants to the province, which is bolstering housing markets
First off, a few words about months inventory in BC. In this article, we define it as the number of homes available for purchase within a given region (often referred to as active listings) divided by the number of sales in the same month. The result can be interpreted as the number of months it would take to sell of the entire inventory, given the pace of sales.
This differs from the analysis that leverages new listings (as opposed to active listings). The problem with new listings is that it does not take into account homes for sale that was put on the market in the previous month. Months inventory gives a better picture of the state of the market – with a particularly low number indicative of a seller’s market and a high number indicative of a buyers market.
Months Inventory Falling Across BC
The Vancouver housing market (and by that we mean the Greater Vancouver Area) actually came out of the recession quite quickly and was fairly steady in the years that followed. What often went undiscussed, however, was a weakness in other markets (see chart below). Single-family home prices in the Greater Vancouver Area have been the headline-grabbing items for quite some time. However, in other markets, such as Victoria, prices have languished, while the Fraser Valley has grown at a more steady pace.
More recently though, prices have been rising across the province and months inventory is falling (see chart below)
- Months inventory (equal to the number of homes available for purchase divided by the number of homes sold in a given month) is falling across most of the markets examined here
- Northern BC was the only market to register a higher months inventory compared to last year, however, sales are still up almost 9% this year
- Vancouver Island has seen the most drastic improvement, though still remains well above Victoria
The breadth and depth of the current strength in the BC housing market is reassuring. Markets outside of Vancouver are performing well and the province as a whole should have a good year.
A previous version of this posting had mislabelled Fraser Valley prices in the second chart. We strive for accurate analysis and apologize for any confusion.