Demand for homes in B.C. climbs

Published: Saturday, July 07, 2007

B.C.'s housing market continues to stay hot with both sales and prices on the rise, reports the British Columbia Real Estate Association (BCREA).

Residential sales volume on the Multiple Listing Service (MLS) in B.C. rose 17.5% to $5.32-billion in May, compared to the same month last year. Residential sales increased 3% to 11,683 units during the same period. The average MLS price hit $454,945, up 14 % from May, 2006.

"The increase in MLS unit sales in May belies the fact that housing affordability is eroding," says Cameron Muir, BCREA chief economist. "The monthly carrying cost of an average home in the province has increased by $500 since the beginning of the year. A household now needs to earn $114,000, or $21,150 more than in January, to afford a home priced at the B.C. average."

"Rising wages, low unemployment and encouraging migration figures continue to support housing demand in the province," adds Mr. Muir. "However, recent mortgage rate increases combined with record-high home prices will moderate housing demand over the second half of the year."

Year-to-date, residential sales volume was up 11% to $18.7-billion, compared to the first five months 2006. Home sales dipped 1% to 43,559 units, while the average residential price climbed 12% to $429,888.

Demand and prices in major cities such as Vancouver and Victoria remain robust but the strongest growth was in the community of Powell River. The town saw the price of an average home rise by 51.3% in the past year. Communities in the Okanagan and the Kootenays also saw house prices rise by 37.7% and 26.4%, respectively.

© National Post 2007