Housing sales across the north got off to a hot start this year according to the BC Real Estate Association.
The average house price in the region spiked to just under $340,000 last month, a year-over-year increase of nearly 13% when compared to January of 2020.
Prince George experienced a slightly higher increase of 19% rounding out the average price to about 400-grand.
Chief Economist, Brendon Ogmundson spoke with Vista Radio.
“It’s the best January on record since 2008. We saw 269 unit sales, which is about 50% higher than last year and those are really strong numbers when we look at last month.”
Across the province, over 76-hundred unit sales were made in January, a spike of 63% when compared to the same month last year.
Ogmundson expects these lofty sales levels to become somewhat commonplace throughout 2021.
“The market has quite a tailwind so we do expect there to be high levels of sales all year this year and probably approaching a record in BC. We will see what happens in the second half of the year and I think once we have the vaccine program really up and running and it’s looking like this pandemic is going to be behind us – there will be a lot more optimism I think.”
However, Ogmundson added the current supply has been unable to keep up with demand as active listings have plunged by 31% over the past 12 months.
“It’s one of those things where on the demand side there is a lot of activity it just isn’t being met with nearly enough supply and I think a lot of that is potential sellers really holding off not looking to relocate during a pandemic.”
“Or, some people look where they are, especially in some places in the north where it’s a bit of a refuge from high-density places where the virus spreads a little more. We are seeing this in a lot of places.”
Last month, the BCREA projected a 12.3% spike in unit sales across the north after issuing its first-quarter forecast.
Ogmundson expects record-low interest rates to play a major role in driving up housing sales in BC.
“We saw in the second half of 2020 a huge response from record low mortgages rates, those rates are going to be around for a long time and so that leads to very strong sales in models and we get to see that play out.”
The Bank of Canada reaffirmed its plans to keep its overnight policy at 0.25 percent until it sees slack in the Canadian economy – this may not occur until 2023.