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The Real Estate Market Rise in migration to B.C. setting up scenario for housing price boost

The benchmark price for a detached home in Vancouver’s west side last month was $2,305,700.

DARRYL DYCK/The Globe and Mail

British Columbia is starting to become a magnet again for people from other provinces, a trend that bodes well for Vancouver housing prices.

In the first half of this year, B.C. had a net gain of 3,270 people from other provinces. It marks a reversal of fortune for B.C., which saw a net loss in interprovincial migration of 4,596 residents for the full 12 months of 2012 and another net loss of 832 people last year.

"We're seeing fewer people moving to Alberta," said Carol Frketich, Canada Mortgage and Housing Corp.'s B.C. regional economist.

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Both population and employment growth are fuelling housing demand, with most international migrants settling in the Vancouver region, Ms. Frketich said at CMHC's annual housing outlook conference Tuesday in Vancouver.

Industry observers say full-time job growth and robust interprovincial and international migration have bolstered this year's sales and prices in Greater Vancouver. In the first half of this year, B.C. enjoyed a net gain of 18,282 people from other countries.

Population growth is a key indicator of economic health, though B.C. was a laggard in attracting new arrivals from other parts of Canada from 2011 to 2013, especially with thousands moving next door to energy-rich Alberta.

BC Stats, the province's central statistics agency, said there has been a see-saw battle in provincial popularity over the decades, with many Albertans flocking to British Columbia in the late 1970s and Alberta shining from 1997 to 2006.

Alberta had the upper hand again over B.C. from 2011 to 2013, and in this year's second quarter, there were 662 more people who left B.C. for Alberta than arrived in British Columbia. "In the long term, it is anticipated that British Columbia unemployment will fall and the unemployment rate gap between the two provinces will stabilize. This will mean that British Columbia will return to net inflows from Alberta in the long term," BC Stats said earlier this year.

On Tuesday, the Real Estate Board of Greater Vancouver reported that existing housing sales in the region reached 3,057 units in October, up 14.9 per cent from the same month in 2013 and 16.6 per cent above October's 10-year sales average. The benchmark home price index for detached homes, condos and townhouses climbed 6 per cent to a record-high $637,000.

The price index, which strips out the most expensive properties, climbed 10.5 per cent year-over-year to a record $2,305,700 last month for a detached home on Vancouver's west side. The benchmark price for detached houses on the city's west side has jumped 48.3 per cent over the past five years, compared with an 11.7-per-cent price gain to $500,500 for condos over the same period.

"This is largely a function of supply and demand as the supply of condominium and townhome properties are more abundant than detached homes in our region," board president Ray Harris said in a statement.

On Vancouver's east side, detached prices have jumped 12.2 per cent to $954,200 over the past year.

Homes are more affordable in the B.C. Fraser Valley, which includes the sprawling suburb of Surrey. The price index for a Fraser Valley detached home hit $573,500 in October, up 4 per cent from the same month in 2013. By contrast, Fraser Valley condo prices have dipped 3.5 per cent to $192,600 over the past 12 months.

Fraser Valley real estate agents say home buyers who complain about Vancouver's high prices should turn their attention to communities such as Abbotsford. The benchmark price for a detached home in Abbotsford advanced to $443,100 in October, up 2 per cent from a year earlier.

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