February 21, 2019 BC’s Continued Population Increases Pressurizes Local Housing Market
Population Growth Steady in BC
The 2019 MLA Intel Report forecasts the population in BC is going to continue to grow steadily with almost 50,000 new residents arriving in our province this year and calling it home. In addition, a large number of international students will continue to attend universities in BC. Canada experienced a 45 percent increase in student permits issued from 2015 to 2017 and many will stay following completion of their degrees. With job opportunities remaining high compared to other provinces, interprovincial migration will likely remain constant over the next three years as well.
Despite the real estate market slowing down over the past months, Vancouver’s population growth clearly hasn’t. What impact will our community growth have on our housing options over the coming years? With steady population increases, it is critical to mention that housing starts are expected to decline in Metro Vancouver over the next two years. Increasing approval timelines add pressure to the housing market. Increased government regulation and taxation, elongated development timelines, and municipal bureaucracy make housing challenging to produce in our cities.
Supply vs. Affordability
Even with the stricter federal mortgage qualifications, rising interest rates, and government interventions to slow the housing market, BC’s forecasted GDP growth continues to lead all other provinces and territories.
Supply and affordability issues are at the forefront of the housing conversation in British Columbia. This means both buyers, sellers and their agents must be creative. As some investors take the sidelines to observe market changes, new residents require somewhere to live and we’re seeing end users once again, the main demographic of home buyers. While 2019 will remain competitive, we expect over the coming months that purchasers will benefit from an overall balanced market with nominal price escalation. Choice, selection and value will be on their side.
We expect BC’s fundamentals to remain stronger than elsewhere in the country. This ensures pressures on our housing market will continue. We must be progressive in our solutions to provide housing – the long-term viability of our cities depend on it.
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