By Paul Henderson
There is little question that 2021 will be the biggest year ever in British Columbia real estate sales with average home sale prices similarly hitting new heights.
But while the B.C. Real Estate Association (BCREA) forecasts fading momentum by the end of the year to reduce the number of sales in 2022, prices may continue to rise.
After the immediate lull in sales of just about everything in spring of 2020, several months into the COVID-19 pandemic, home sales in all markets in the province took off.
“The record-setting pace of home sales that began in late fall of 2020 has continued into 2021 with markets across the province eclipsing previous monthly sales records by wide margins,” according to the BCREA’s second quarter housing forecast.
The 94,013 sales in B.C. in 2020 represented a 21.5 per cent increase over 2019, and the average sale price of $781,765 was a 11.6 per cent jump over the $699,000 in 2019.
And 2021 is proving to be even hotter with the BCREA predicting 125,600 home sales, a 33.6 per cent increase over 2020. The average home price is forecast to hit $893,800 in 2021, a 14.3 per cent increase over 2020.
Those sales and price forecasts nearly double predictions made in the first quarter.
Low mortgage rates coupled with buyers flocking to less populated markets led to the big increases seen over the last eight months. That could slow with a creep up in interest rates and a catch-up in supply, but not any time soon.
“The trajectory of home sales in the second half of 2021 and for 2022 will be highly dependent on the evolution of Canadian mortgage rates,” the BCREA forecasts. “Home sales will likely slow toward the second half of this year. However, even factoring in a second-half slowdown, provincial unit sales are still projected to reach a record.”
As for 2022, the BCREA forecasts a 20.3 per cent drop in sales to 100,150, but a 3.1 per cent increase in the average price of all home types to $921,800.
Broken down by region, BCREA predicts the small Chilliwack and District Real Estate Board to see the biggest increase in sales in 2021 up 51.6 per cent year over year, followed by Greater Vancouver at 40.8 per cent, Powell River Sunshine Coast at 38.2 per cent, and the Interior and BC Northern at 31.9 and 31.1 per cent respectively.
The average price of a home in Greater Vancouver in 2021 is forecast to be $1.174 million, with the Fraser Valley at $969,400, and Victoria at $866,200.
“The supply shock experienced by BC markets during the initial phase of the COVID-19 pandemic and a sustained listings drought continues to drive price increases in 2021. This is particularly true in smaller markets, many of which have seen inventories of homes for sale fall to all-time lows.”
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