Canada Mortgage and Housing Corporation reports that though housing starts across Canada are down, numbers for urban areas in B.C. remain stable.
Housing starts in urban areas were trending at 30,598 units in December compared to 30,840 units in November, according to the CMHC.
“The trend level of housing starts has hovered just over 30,000 units since mid-2015, a level consistent with an active resale housing market and underlying population and employment growth in the province,” said Carol Frketich, CMHC regional economist for B.C. “For the year as a whole, housing starts in B.C. increased compared to 2014 as more single-detached and multiple-family homes got underway. Most centres in the province recorded increased housing starts last year.”
That stability in the housing market is mirrored in the South Okanagan, where the South Okanagan Real Estate board is reporting a substantial increase in both sales and dollar value over the course of 2015.
The SOREB statistics show 2,322 residential and non-residential sales in 2015, for a total dollar value of over $795.9 million. That compares to 2,010 sales in 2014 for a total of about $642.1 million.
SOREB president Garry Gratton said the increase appears to be part of a historical cycle in the South Okanagan.
“You typically have anywhere from a six to eight-year down cycle, when both sales and prices are down, and that is always followed by approximately a five-year up cycle,” said Gratton.
Proof that the South Okanagan is at the very beginning of an up cycle, he said, is shown in the recent property assessments, which showed an increase of about eight to 12 per cent on average for a residential home in Penticton, and similar increases in most South Okanagan communities.
The down cycle started in 2008 with the global economic downturn. Gratton said losses were in the range of approximately 15 per cent of value applied to each residential home from 2008 to 2015
“When 2015 arrived, it took about six months for that up cycle to begin,” said Gratton. But when it did kick in, he continued, losses were rapidly recovered in the last half of 2015.
There are no guarantees, Gratton said, but the outlook is promising.
“If history repeats itself the way it has done for 40 or 50 years with these real estate cycles then we are definitely poised for a big upswing in the market, which means increased sales and higher values on residential properties,” he said.
Another factor is interest rates, which remain low.
“Even though there are some modest threats of real estate increases, it is still very modest and the interest rates are at a 50-year low,” said Gratton. “That is definitely a huge enticement for people to be jumping into the market.