February 26, 2016
Local and global economic factors at play in pushing region’s new home sales to a five-year high, according to Urban Development Institute’s quarterly report
A low loonie and interprovincial migration are two key factors propping up the city’s hot real estate market, according to the Urban Development Institute’s latest State of the Market report for 2015’s fourth quarter.
The report, compiled by Urban Analytics and issued February 19, said that “Metro Vancouver’s new home market experienced an exceptional quarter in Q4-2015. A combined total of 5,274 new multi-family home sales were recorded in Q4-2015, which is up 45 per cent from the same quarter last year and represents a five-year high. Current levels of standing inventory for all new home product sectors are also at five-year lows.”
Metro Vancouver’s net population change was up 10,000 compared with the previous quarter and was up nine per cent compared with the same quarter last year, said the report, with interprovincial migration at a 10-year high.
“Continued weakness in Alberta’s economy is assumed to be a primary reason that can explain the recent high levels of interprovincial migration to BC,” added the report.
The UDI added that the current ratio of 2.3 new residents per housing start is down from the 2.6 recorded in Q3-2015 but is still deemed to be in a healthy range for the overall housing market.
The report also looked at the effect of the Canadian dollar being at a 10-year low against the US dollar.
“The short-term impact of this has been twofold; an increase in global demand for Canadian real estate due to an increase in purchasing power for international buyers, and an increase in construction costs for new home developments.”
To read the full report, which is sponsored by REW.ca and its parent company Glacier Media Group, click here.