It is no secret that the Fraser Valley housing market has been one of British Columbia’s hottest for the last couple of years. But did this area, which consists of Abbotsford and Chilliwack, really break a century-old record? The pandemic housing boom in this western province and across the entire country highlights how hot the Canadian real estate market has become.
But it might not be exactly shocking. Considering how desirable British Columbia real estate has been, it was only a matter of time. And it is not only Vancouver that people are clamouring over now.
Whether it’s the Lower Mainland or the North Coast, BC has been experiencing sizzling sales activity and meteoric price growth. Many factors support this bullish real estate market, from low supply to low borrowing costs. Can it slow down any time soon? This is the debate happening among experts from coast to coast. For now, Fraser Valley real estate is celebrating a monumental milestone that may not happen again for another 100 years.
Let’s find out more!
The Fraser Valley Housing Market Breaks a 100-Year Record
According to the Fraser Valley Real Estate Board (FVREB), residential sales soared 39 per cent in 2021, totalling 27,692 unit sales. This level of transactions broke the previous annual record established in 2016, when nearly 24,000 sales were completed. Put simply, sales activity of this size has not been witnessed in its 100-year history.
In December, demand was strong for every property type. Sales of detached homes advanced by 31.8 per cent year-over-year, townhomes enjoyed a 33.7-per-cent spike in transactions, and apartment sales generated a 68.9-per-cent gain.
While sales dominated headlines, price growth was also notable in the Fraser Valley real estate market. FVREB data show that the benchmark price for single-family detached homes surged at an annualized pace of 39 per cent to $1.5 million. Townhomes swelled 32.9 per cent to $765,800, while condominium apartments increased 25.3 per cent to $549,200.
Last year, new residential listings gained 12.4 per cent to 35,629 units, the second-highest level on record. But industry observers are also pointing to new housing construction data, highlighting that additional supply could be the relief prospective homeowners in Fraser Valley need to get into the market.
According to Canada Mortgage and Housing Corporation (CMHC), housing starts in Chilliwack skyrocketed 63.5 per cent year-over-year in 2021, totalling 1,362 units. Abbotsford’s housing starts have remained steady, topping more than 1,000 units for the second consecutive year.
Will this be enough supply to satisfy demand? This might be challenging to answer, especially since few could have anticipated the region’s enormous growth since the early days of the COVID-19 public health crisis.
“No one could have predicted how the pandemic would impact the real estate market. Our region’s relative affordability, combined with a newfound ability to work from home and the value for housing dollar in the Fraser Valley, attracted buyers in numbers like we’ve never seen,” said Larry Anderson, President of the Board, in a news release. “Whether helping sellers list or helping buyers complete a sale, our Board averaged over 5,200 transactions every month. And even though our volume of new listings was also high, it just couldn’t keep up with the demand.”
Indeed, the practices homebuyers have become accustomed to in the major urban centres, such as bidding wars, have become more common in markets like Fraser Valley.
So, are more record-setting gains on the horizon, or is relief on the way?
Many British Columbia housing markets are likely to record notable growth in 2022, the RE/MAX 2022 Canadian Housing Market Outlook found. For example, Nanaimo real estate prices are forecast to grow eight per cent to nearly $608,000. The Kelowna housing market expects to see a nine-per-cent jump in prices this year, potentially topping $830,000.
“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” said Elton Ash, Executive Vice President, RE/MAX Canada, in the report. “Despite this, it’s encouraging to see that many are feeling confident in the housing market in 2022 and view Canadian real estate as a solid investment.”
Record low inventory volumes, rising prices, historically low borrowing costs and strong demand will likely be substantial contributing factors across the Fraser Valley housing market. But while these trends are prevalent in the Lower Mainland, they can be found all across the western province, whether Vancouver or Surrey.
Can the Bank of Canada (BoC) ease prices with a 25-basis-point rate hike? This will be on the minds of market analysts throughout the country for the coming months.