Spike in B.C. home sales attributed to remote work, increased savings
As 2021 home sales surpass industry expectations, new survey suggests millennials preparing to take the plunge
Growing up in Tsawwassen, B.C., Ashley Bell and Brock Ranata had both heard of Southlands — a 530 acre development with homes, farmland and open fields near Boundary Bay Regional Park — but never seriously considered living there. That is, until a global pandemic dramatically changed their day-to-day lives.
"We were living in our one-bedroom apartment in Vancouver and working literally a foot beside each other for eight hours a day," said Bell, 36. "Not going to confirm or deny that that maybe had something to do with us getting more space."
The couple says before COVID-19, they were looking to buy a condo in downtown Vancouver. Working from home, however, inspired them to expand their search criteria.
In November, they said goodbye to their rental in the city's Fairview neighbourhood and purchased a townhouse in the Southlands development with help from their parents.
"COVID made things in our lifestyle a lot better to then put us in this position to be out here and make it work," said Hill, who acknowledges that not everybody has been so fortunate in the past year. "It was a catalyst for completely changing our lifestyle."
And it seems they are not the only ones.
Though the pandemic initially caused home sales to slump, economists and real estate insiders say 2021's numbers have already surpassed expectations, as many British Columbians look to capitalize on low mortgage rates and increased savings in order to purchase property — in some cases for the very first time. The spike appears to reflect a national rebound, thought by the Bank of Canada to show "early signs" of an overheated housing market.
Still, for many the purchase appears to be a bet on the province's post-pandemic future, with some wagering that work from home protocols will remain in place.
"Some people believe that we [will] work at home forever. But it may not be the case." said Brian Yu, Central 1 Credit Union deputy chief economist.
"I think that some businesses will want their staff back in the office once the pandemic ends," Yu said.
Millennials buying or looking to buy: survey
In particular, data suggests millennials are among those driving sales.
In a survey of 2000 Canadians aged 25 - 35 conducted between December 29 and January 8, Royal LePage found 240 had purchased a home during the pandemic. The survey showed another 600 planned on buying a home within 2 years.
The data does not include a breakdown of how many people were interviewed in each region. However, 65% of those surveyed in British Columbia said they intend to buy within the next five years.
"This is a local market, this is a domestic, principal-residence driven market," said Adil Dinani, sales representative at Royal LePage West Real Estate Services in Greater Vancouver. "People are buying to live, not buying to profit, or not buying to speculate."
But while more than half of B.C. respondents to the survey said they would choose to live in a city, even more (63%) said they felt it was important that their employer allow them to work remotely.
The company also found that, despite surging job losses, B.C. respondents had a relatively rosy outlook on their finances with more than 70% saying they were confident in their short and long term personal financial outlooks.
Bank of Canada watching home sales 'carefully'
Bank of Canada governor Tiff Macklem, however, is approaching the situation more cautiously, saying the central bank is seeing early signs that people may be purchasing homes solely on the assumption that prices may go up.
"In that low-for-long world, there are risks that housing could get carried away, so that is something we will be looking at very carefully," said Macklem, speaking with the combined Calgary and Edmonton chambers of commerce.
"It's definitely nicer to see mortgage rates at what we got it at," said Ranta.
"They're almost giving you the money," he said.
With files from Tina Lovgreen and The Canadian Press