With supply at historical lows across the lower mainland, how does this impact the future of Real Estate?
We have seen over the past year and a half a historically strong Real Estate Market across BC and the rest of Canada. It’s been one of the hardest real estate markets to predict given our very unpredictable global economy. I have had the opportunity to sit in on a couple panel discussions across the top Realtors in the major areas within BC last week and the message was consistent across all outside markets – including Whistler, Kelowna, Fraser Valley, Kootenay’s and Vancouver Island. We are going to see continued low inventory with pent up demand from buyers.
With 1 in 5 immigrants choosing Vancouver as their ultimate destination, it is continuing to drive the Vancouver market sales upwards and pushing the locals to outside markets. It is an opportunity for these sellers to sell at top dollar and buy homes in rural markets at a quarter or half of the price. In addition, the flexibility of working from home has provided those living in Vancouver the opportunity to move to more rural properties with more space. Currently there are no signs that this will slow down. We have seen some slight buyer fatigue, but the market continues to see over asking and multiple offers on desirable properties throughout most markets.
As a realtor we frequently get asked about the future of Real Estate and what our predications are. I base my predictions off facts, as well as gut feelings from my experience in investing in this market over the past 10 years. Here is the fact – Canada has one of the most aggressive immigration plans. Canada aims to bring over 400,000 new permanent residents in the next 3 years. Over 70,000 of these new residents will reside in the lower mainland. The big question has become, where are all these people to live? With supply as low as it is, it will take years for us to recover this inventory. We will need a significant increase in new construction. Unfortunately, based on many unforeseen obstacles, we continue to see building delays.
To give you some background; In 2018/2019 we saw a slower Real Estate market, which caused developers to slow down on their new construction projects because of the very few presales over those two years. Fast forward to the middle of 2020 where sales started to increase. Developers started launching their new presales which drove much of the sales in the lower mainland. Many of the presale launches sell out within a couple days which leaves many buyers struggling to get into the market. On top of that, the building permits are taking anywhere from 1-3 years to acquire from the local municipalities. This often delays new construction and keeps people in their rentals or others them from selling their current homes. As the demand for new construction grows there has been a struggle to hire enough employees to build and this too has put increased pressure on our already challenging supply network.
Overall, my prediction is that we will continue to see inventory levels low. With the demand increasing from global entry, Canadians moving from Ontario to the Westcoast for a better lifestyle