B.C.'s Housing Market Remains Strong Despite Cooling Signs

If you're a homeowner in British Columbia, you may have noticed some cooling signs in the housing market recently. But don't worry; the economy in B.C. remains resilient, and demand for housing is still strong across the province. In this blog post, we'll explore the state of B.C.'s housing market and the factors that may impact it in the near and long term.

B.C.'s housing market has seen some cooling signs recently, largely due to affordability pressures from rising interest rates. However, it's important to note that mortgage delinquencies remain near record lows of just 0.12% across the province. While the impact of rising rates and a softening labor market may push delinquencies higher to 0.7%, this is still within the long-term average of closer to 0.6% to 0.30% over the next year.

Despite rising interest rates the housing market remains strong

In the first quarter, B.C.'s labor market added 14,000 jobs. However, it stalled out in Q2, with employment staying effectively flat. Despite this, population growth is booming, so the unemployment rate is rising. In Q2, it went up 1.1%, which is outside of the COVID-19 downturn and the most significant increase in the unemployment rate since 2009.

Despite these temporary setbacks, the long-term demand story remains intact in B.C. Annual population growth surged to a record 165,000 in the second quarter, and this trend is expected to continue. However, single-family housing starts have slowed to 10-year lows. Conversely, multi-family construction activity, including condos and rentals, remains near record highs. Dwellings under construction have jumped 5.1% relative to the end of Q1, led by surging activity in the condo and rental segments.

While rising interest rates and a softening labor market may cause short-term challenges in B.C.'s housing market, these factors do not detract from the long-term demand story. With a booming population and a robust housing construction market, B.C.'s housing market remains a strong opportunity for homeowners and investors alike.

In conclusion, B.C.'s housing market remains strong despite recent cooling signs. While affordability pressures and rising interest rates may impact the market in the short term, the long-term demand story remains intact. With a booming population and strong housing construction market, B.C. homeowners can rest assured that their investments are secure.

You can reach me at 604-710-8934 by text or phone and by email at karen.canning@mortgagegroup.com to discuss solutions built for you.