Even with the Covid-19 pandemic, 2020 was a record year for new home purchases in Canada. However, the number of new properties coming onto the market is the lowest for three decades. In the Northwest, the number of MLS listings in Terrace and Prince Rupert in December was down compared to last year.
Across Canada, Canadian Real Estate Association (CREA) data shows home sales rose 7.2 per cent in December. A month traditionally quieter in real estate. In particular, home resales swept high above their ten-year average. December made the sixth consecutive month where home sales activity was up compared to the same period in 2019. In fact compared to 2019, 2020 saw home sales activity boom by over 47 per cent.
Lowest number of home listings for three decades
Dominion Lending Centres Chief Economist, Dr Sherry Cooper, says this boom happened despite supply being “insufficient to meet demand.” She quotes Shaun Cathcart, CREA’s Senior Economist:
“We already have record-setting sales, but we know demand is much stronger than those numbers suggest because we can see it impacting prices. On New Year’s Day, there were fewer than 100,000 residential listings on all Canadian MLS® Systems, the lowest ever based on records going back three decades.”
Cathcart points to the potential of a “major supply problem in 2021,” with record-high demand and a record-low supply of new properties as we begin the new year.
Home prices in Canada rise 13% in 2020, as per MLS
As per the Aggregate Composite MLS® Home Price Index (MLS® HPI), home prices rose in Canada by 1.5 per cent in December 2020, up from November.
Comparing December 2020 to December 2019, home prices as per MLS listings were up 13 per cent year-on-year across Canada. This is the largest gain since June 2017. For B.C specifically, year-on-year price gains were between 5-10 per cent. Cooper says:
“Home price activity largely reflected the desire of home purchasers to move away from city centres to a greener, less-expensive suburbs and exurbs now that telecommuting appears to be a sustainable option, at least part-time.”
Cooper adds that housing market strength is due to “record-low” mortgage interest rates and strong demand. In fact, we’re seeing the lowest mortgage interest rates for a decade. The economist expects interest rates to “creep-up moderately,” in 2021, as the rate of vaccinations begins to mitigate the effects of the pandemic and we “return to a new normal.”
New home purchases in Terrace, Prince Rupert, and Kitimat increase
The latest statistics shared by the BC Northern Real Estate Board (BCNREB) shows the number of new home purchases in Terrace, Prince Rupert, and Kitimat, rose in 2020 compared to 2019.
- Terrace saw 318 properties sold in 2020, these were worth a combined $114.1 million. In 2019, 282 properties sold, worth $95.4 million.
- In Prince Rupert 229 properties worth $72.9 million sold in 2020, compared to 201 properties worth $59 million in 2019.
- For Kitimat, there were 166 property sales worth a total of $52.6 million in 2020, compared to 144 home sales in 2019 worth $63.7 million.
Property availability for the Northwest falls
At the end of December 2020, the number of properties available for sale in these three major cities of the Northwest fell, as per MLS.
- In Terrace there were 154 properties for sale, down from 192 in December 2019.
- For Prince Rupert there were 80 properties listed at the end of December 2020, compared to 108 a year ago.
- In Kitimat the number of active listings in December 2020 and 2019 was the same, at 106 properties.
The latest property value data from BC Assessment puts BC property values up on average by 4.2 per cent. In Terrace, BC Assessment puts values as rising between 1-14 per cent, and in Prince Rupert property values as rising 7 per cent.
Read our full summary of the latest BC Assessment data for property values in the Northwest.
If you have found your dream home and need a mortgage for your new home purchase call Adam Coultish, expert Mortgage Advisor, Dominion Lending Centres Northwest, today on 250 638 3302.
Or, would you like to know exactly how much you can afford to spend in BC’s difficult property market? We can give you a fast, free, mortgage pre-approval. Call us today or apply online and we’ll call you.