British Columbia was one of the first major provinces in Canada to flatten the coronavirus curve. After hitting a peak of 2,760 confirmed cases in early May, infections started to plummet. The province was quick to act, implementing partial lockdown measures province-wide in March. The dining service inside restaurants was banned, and the public was encouraged to stay inside as much as possible. Within as little as two months, BC began to restart their local economy, making it the envy of Canada.
A lot of businesses were affected, but the real estate industry was declared an essential service. As a result, the market meltdown was not that pronounced in British Columbia, in comparison with the rest of the country. Much of this was a testament to the tireless agents who quickly embraced digital tools, practiced social distancing, and worked hard to ensure the safety of buyers and sellers through this turbulent time.
The result? The BC real estate market is enjoying a robust recovery. One of the areas of the province to experience record growth: the Fraser Valley, comprised of Surrey, North Delta, White Rock, Langley, Abbotsford, and Mission. The Fraser Valley housing market was so heated that the month of August saw record-breaking activity. How can this happen amid the worst global pandemic in a century? The strong Canadian real estate market proves once again that it can defy all odds.
BC Real Estate Trends: A Robust Recovery in Fraser Valley Market
Fraser Valley joined the broader Canadian real estate market in August as sales and prices increased at their best levels on record.
According to Fraser Valley Real Estate Board (FVREB), residential sales surged 67.2 per cent in August from the same time a year ago, with 947 transactions. They were also 39 per cent above the ten-year average for August.
The price of a single-family detached home jumped 1.1 per cent month over month to $1,118,300. Townhomes edged up 0.1 per cent to $563,900 from July, while condominium prices were unchanged at $437,300.
Chris Shields, president of the FVREB, attributed the stimulated activity to “increased choice and diversified housing opportunities.”
“We are seeing better sales volumes increase month over month because buyers are recognizing that the Fraser Valley offers increased choice and diversified housing opportunities, while offering more value as well,” he said in a news release. “In an unusual situation given the pandemic, we remain cautiously optimistic and are encouraged by the numbers we are seeing.”
Baldev Gill, the CEO of FVREB, added that real estate agents are playing an integral role in this market, which is evident in the multiple offers and shorter days on the market for a wide variety of properties.
Will the BC Real Estate Recovery Continue?
Because many real estate markets across the country have recovered so quickly, homebuyers might be wondering if they missed out on the COVID-19 discount from earlier this year. Although the Canada Mortgage and Housing Corporation (CMHC) forecast that prices would trend lower until 2022, industry observers think that it missed the mark. Many favourable factors will inevitably help the housing market in Fraser Valley and elsewhere.
The most notable factor contributing to the housing market recovery are the ultra-low borrowing costs. Earlier this year, the Bank of Canada (BoC) slashed interest rates 150 basis points to 0.5 per cent, and Governor Tiff Macklem recently signaled that the central bank is unlikely to pull the trigger on a rate hike for another couple of years. Moreover, the BoC reduced its benchmark five-year mortgage rate to 4.79 per cent. The three-year rate fell to 3.75 per cent, and the one-year rate was unchanged at 3.09 per cent.
The COVID-19 public health crisis might still linger in the background, particularly after the province has seen an uptick in confirmed infections. So far, British Columbia has refrained from imposing another series of lockdown measures, but officials are recommending residents to continue to practice physical distancing and public safety protocols, especially as the country braces for the cold and flu season.
This also means that real estate agents will still employ the necessary COVID-19 measures. Over the last six months, the sector has utilised a diverse array of digital tools, from virtual tours to online documents. This is in addition to agents wearing face masks and gloves, and urging social distancing among buyers and sellers. The industry has done an incredible job of maintaining these efforts, despite the virus outbreak feeling like it is in the rear-view mirror.
Overall, the Fraser Valley housing market is poised to continue its upward trajectory for the next several months, with rising demand and climbing housing inventories. The resiliency of this local market over the past six months has proven that real estate activity will likely remain positive.
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