New data from the B.C. Real Estate Association (BCREA) shows housing supply in the province is at a 20-year low, and the association says that lack of supply is making the ongoing affordability problem worse.
The BCREA, the provincial real estate professional association, says the supply of homes for sale is down 17 per cent from April 2016 and down 50 per cent since 2012 after adjusting for seasonal variance.
"We're really in almost uncharted territory where we see overall active listings in the market have been steadily declining for many years," said Cameron Muir, the BCREA's chief economist.
"That has certainly lead to upward pressure in prices in most markets in the southern half of the province right now."
A seller's market
Muir says the ratio of sales to active listings is a useful metric for determining overall market conditions.
A ratio of 20 per cent, for example, would mean that 20 per cent of the homes listed in a given month were sold. The higher the ratio is, the more active the market it is, and the more it tends to favour sellers over buyers.
Muir says there is regional variation, but generally, a sales to active listings ratio of greater than 20 per cent is considered to be a "seller's market."
The BCREA's data shows that number is above 20 per cent in every region of the province except the Northern and Kootenay regions.
In Greater Vancouver, that number is 42.9 per cent. In the Fraser Valley, it's 57.6 per cent.
"That's certainly indicative of seller's market conditions and rising home prices," Muir said.
The most seller-friendly region in the province is Victoria, where the ratio of sales to active listings is 70.9 per cent.
Sales slowing, but market still hot
The BCREA's data shows total home sales are down about 24 per cent in the province year over year, but Muir says this is actually further evidence of constrained supply — not a cooling market.
"Market conditions are pretty close to what they were a year ago, even with those fewer sales," Muir said.
Muir says demand for housing, bolstered by job growth and an influx of interprovincial migration, has continued to grow, even as fewer homes are being sold.
"That's all helped to underpin housing demand and lead to certainly a decline in the overall level of homes that are available for sale, and that's causing prices to rise in most markets as a result of that," Muir said.
With files from Natasha Frakes.