CPABC: HOUSING AFFORDABILITY A MAJOR CHALLENGE TO BUSINESS SUCCESS IN B.C.

BRITISH COLUMBIA – According to BC Check-Up: Live, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on demographic and affordability trends across the province, B.C. added more than 162,000 new residents between July 1, 2022, and July 1, 2023, marking a new record high.

“Population growth kept accelerating in 2023, thanks to record immigration levels,” said Lori Mathison, FCPA, FCGA, LLB, president and CEO of CPABC. “That growth was heavily concentrated in the province’s largest cities, even more so than last year.”

B.C. welcomed 175,024 (net) residents arriving from other countries in 2023, a 64.8 per cent increase from the number who arrived in 2022. International migration accounted for all population growth province-wide, while other components of population change detracted from the total. Natural growth (births minus mortalities) was negative for the second year ever, and people leaving B.C. for other provinces outnumbered people coming in for the first time in a decade; net interprovincial migration reduced the population by 8,228 residents in 2023.

“One of the most concerning trends over the last year was the exodus of B.C. residents relocating to other parts of Canada,” continued Mathison. “We’ve historically been able to attract more than we lose. High housing costs are a major reason for that reversal. Younger people in particular are looking elsewhere to build a future.”

When the Bank of Canada started raising interest rates in March 2022, housing prices initially fell. However, housing prices have now stabilized. In May 2024, the benchmark price for the average B.C. home was $965,100, up 1.2 per cent compared to May 2023. That represents an 8.2 per cent pullback from the March 2022 high, but a staggering 43.3 per cent increase compared to May 2019. The average rental cost for a 3+ bedroom apartment in B.C. was $2,146 a month and $1,558 for a 1 bedroom, up 3.8 per cent and 8.8 per cent respectively from 2022.

Compounding the issue, new housing supply did not keep up with new housing demand, particularly in the province’s large urban centres. In B.C.’s seven Census Metropolitan Areas, there were 30,621 housing units completed in 2023, a meagre 1.0 per cent increase from 2022. That translated to just 0.21 new housing units completed per new resident.

“Immigration isn’t causing the housing crisis, as we have had long-standing housing shortages in the province,” noted Mathison. “The strain placed on households is evident, as is the impact the housing crisis is having on businesses and their talent pool.”

According to the BC Check-Up: LIVE member survey conducted in April 2024, CPAs identified poor housing affordability as the biggest obstacle to business success in the province, with 86 per cent of respondents calling it a major challenge. Respondents also shared a pessimistic outlook when asked if they expected any improvement within the next year. Nearly two-thirds (61 per cent) expected housing affordability to worsen in their region in 2024.

“Our members have consistently identified poor housing affordability as a major obstacle to business success,” concluded Mathison. “To improve affordability, we need to support policies that significantly boost the housing supply, encourage investment, and increase real incomes of B.C. residents.”

Learn more about the BC Check-Up: Live report.