Bubble? What Bubble?
Alberta homebuyers eyeing B.C. again
British Columbians love talking about their real estate.
And nowhere is that topic hotter than in the Lower Mainland and Vancouver, where average housing prices upward of $700,000 are not uncommon.
Yet in the wake of recent news reports about a housing market swoon on the West Coast due to price plunge headlines, the talk of a housing bubble has popped up yet again.
The average residential price in the Lower Mainland dropped 10.9 per cent in April compared to a year ago to $532,855, but B.C. Real Estate Association Cameron Muir says that decline was offset by a 14 per cent increase in the rest of the province.
He says Kamloops, the Okanagan and the North all posted double-digit increases in home sales compared to levels one year ago.
In Kamloops, the Canadian Home Builders’ Association of the Central Interior executive officer Patsy Bourassa says she has noticed a definite pick-up in the market compared to the same time a year ago.
“With this spring, things have started moving again,” she says.
Bourassa credits a few things for spurring the current increase, which she describes as slow but steady, such as the First Time Homebuyers’ tax credit and HST transition measures announced by the provincial government earlier this year, as well as a generally robust resource economy – she notes there are five mines in the Central Interior – and homebuyers from Alberta.
UBC Sauder School of Business real estate economist Tsur Somerville also notes the Interior and the North are doing better than the Lower Mainland lately.
“A lot of that is being driven by the second home purchase market in Alberta,” he says.
Those areas are popular for Albertans who purchase vacation properties and with that province’s economy recovering, more consumers are thinking about buying in B.C., Somerville said.
He points out the B.C. market now is very different form one or two years ago, as high-end market sales and the foreign source of wealth market have both slowed down.
Somerville doesn’t think British Columbians needs to worry about a housing market bubble.
“I never thought there was a bubble to begin with,” he says.
While there’s a lot of inventory in the new-home market, there are locations with a lot of starts happening, he notes.
Despite a lot of inventory – depending on where you live in the province – Somerville doesn’t go so far as to say B.C. is experiencing a buyer’s market.
“When average prices are in excess of $700,000, I don’t think you can really say it’s a buyer’s market,” he says.
He advises potential homebuyers not to base big decisions on what the market may or may not be doing.
“If you’re buying real estate for yourself to live in, I think you need to do that based on your life cycle and not try to time it with the market.”
When you get listings to sales ratios rising, consumers don’t have to approach the market with as much anxiety and can take their time to choose a product they really love, he says.
In the Central Interior, “Everybody’s cautiously optimistic” the housing market will continue to move, Bourassa said.