Read our message regarding Covid-19
Collectively Serving Victoria, Western Communities and Sooke for Over 40 years Contact Us: 250-642-5050 facebook instagram

Blog

REAL ESTATE CONTINUES TO SURPRISE

Posted by on

In the wake of the economic impact of Covid-19, the performance of the housing market in Canada in 2020 has surprised many. Despite the rather dire forecasts of a number of market analysts, sales have not collapsed; in fact, prices have shown strong increases in many areas of the country.


There continues to be considerable variation across the province in terms of the average sale prices of residential properties. This ranges from a low of $257,212 in the Northern Lights Board (basically, the northern half of the province) to a high of $1,044,725 in Greater Vancouver. With the exception of the Northern Lights board, all regions of the province enjoyed an increase in their average sale prices with the Fraser Valley, Victoria, Okanagan-Mainline and South Okanagan topping the list with double digit increases. Province-wide, the increase was 10.4%. The average sale price for Canada was up +10.3%. Actually, Ontario experienced the largest increase at +13.8%, driven by double-digit increases in Toronto, Hamilton, Kitchener, London, Niagara and Ottawa.


The change in the number of sales presents a different and somewhat more complex dynamic. Most areas in the province experienced an increase in the number of units sold. The lower mainland, (i.e., Greater Vancouver, the Fraser Valley and Chilliwack), experienced the largest increase in unit sales. A few, Vancouver Island, BC Northern, Kamloops, Powell River and Northen Lights had decreases. Overall, the province of BC experienced an increase in unit sales of +4.9%. In Canada, unit sales increased a modest +0.8%, pulled down by Ontario, which experienced a decrease of -2.4%.


The current strength of the real estate market has surprised many analysts and a couple of explanations have been offered. First, many buyers simply delayed their decision from the spring to the summer of this year. Second, the market is in a longer term recovery phase, coming off a two-year slump and is driven by pent-up demand and record low mortgage rates. (For example, with a little searching, one can obtain a five-year fixed mortgage rate below 2.0%).