BRITISH COLUMBIA – The British Columbia Real Estate Association (BCREA) has published a report quantifying the imbalance between supply and demand in the BC housing market during the COVID-19 pandemic.
BCREA’s recent Market Intelligence report, Way Out of Balance: Housing Supply and Demand During the Pandemic, estimates at the peak of market activity in March 2021, 67,000 buyers were searching for homes across BC while only 24,000 listings were available. Put another way, prospective buyers outnumbered sellers three-to-one and the ratio was more pronounced in regions of the province that experienced significant relocation demand.
“The conditions we saw at the peak of market activity earlier this year were unprecedented,” says the report’s primary author, BCREA Chief Economist Brendon Ogmundson. “Record-low mortgage rates and the work-from-home environment driving buyers into rural areas were both factors that fueled demand disproportionately as it relates to supply. With sellers looking to stay put in an environment where space at home was at a premium, it made for quite the imbalance.”
In the Fraser Valley, buyers outnumbered sellers by as much as seven-to-one at the height of the market in the spring. This resulted in prices rising nearly 30 per cent, double what was seen in the Greater Vancouver area during the same period. Markets in the interior as well as Vancouver Island saw similar trends, with Victoria earning the title of most undersupplied with a nine-to-one ratio of buyers to sellers.
To be able to reach these conclusions, Ogmundson used a model framework recently developed by researchers at the US Federal Reserve.
“This type of data shows how hard it is for supply to keep up with rapidly changing demand,” Ogmundson adds. “The issue of supply is not a new one in BC, but seeing just how much worse it can get during these types of events highlights the need for a coordinated strategy to significantly increase supply.”
