A company that supports hundreds of credit unions across Canada predicts British Columbia’s housing market will stay healthy until 2021 when the province comes out of the COVID-19 slump.
A report from Central 1, the organization that handles financial services, digital banking and other resources for more than 250 credit unions, said B.C. has seen a “spectacular” recovery in housing demand since the spring’s pandemic lows.
Affordability remains the focus, the report says, as median home prices are up 9% this year to 585,000 and are forecast to increase by 6% to 618,000 by 2021.
The number of homes sold in B.C. has jumped 20% this year, overcoming a pandemic downturn, and as many as 95,000 properties could change hands next year.
This increase is due to the “unique characteristics” of pandemic economics, such as low-interest rates and high-paying workers remain relatively unaffected by COVID-19 economic contractions.
The report also forecasts a firmer rental market through 2022 when economic conditions normalize, border restrictions abate and post-secondary institutions reopen.
However, the rental rate will not change much next year, due to the rent freeze imposed by the province.
Brian Yu, Central 1 deputy chief economist, authored the report and calls B.C.’s ongoing pandemic recovery a “mix of short-term challenges and future optimism.”
“Economic growth is forecast to pick up steam in the second quarter of 2021 onwards as the vaccine drives higher investment spending and consumer spending is unleashed when social and travel restrictions are eased,” Yu writes.
Some job loss will continue in B.C.’s “fragile sectors,” Yu says.
Even though employment remains 1.5 percent lower than it did in February, he says the province is outperforming most others and sectors such as retail spending, manufacturing, and exports are “largely recovered.”
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