Not many Chilliwack residents commute to as far away as Vancouver, but that doesn’t mean the skyrocketing home prices in the Lower Mainland’s biggest city don’t have an effect out here.
The so-called “spill-over” effect means home prices fluctuations in the City of Vancouver have an effect on neighbouring municipalities, but even in communities that do not include many commuters to Vancouver.
That’s according to a Canada Mortgage and Housing Corporation (CMHC) report issued last week that addressed the spill-over effect, something also affecting the largest housing market in the country in Toronto.
“When home prices in the City of Vancouver fluctuate, there is a measurable effect on home prices of other municipalities,” according to the CMHC. “Within commuting distance of Vancouver, the length of the commute and the size of the spill-over effect are related. House prices in municipalities that are outside of the commuting range are still affected by price changes in Vancouver.”
None of this should be surprising to those who have witnessed the out-migration from Vancouver to the suburbs, and that includes to the most affordable real estate board area in the Lower Mainland, namely Chilliwack. But prices are rising.
Over the first four months of 2017, the average sale price of a home in the Chilliwack and District Real Estate Board (CADREB) was $439,600, up 16.3 per cent from the $378,089 over the same period in 2016.
That price jump was the highest of the 12 real estate boards in the province. In the Lower Mainland, that compares to a 6.5 decrease in prices to $657,015 in the Fraser Valley Real Estate Board (Abbotsford to Surrey) and an 8.8 per cent in the Great Vancouver Real Estate Board, by far the largest market in the province.
Increasing demand along with a 20-year record low in the residential supply of housing is what’s fueling the high prices.
In Chilliwack there were just 909 residential listings at the end of April 2017, down even from the low of 992 in April 2016. Rarely do listing drop below 1,000 in the CADREB area.
Provincewide listings were down 17 per cent, and the B.C. Real Estate Association (BCREA) says active residential listings have declined 50 per cent since 2012 and are at the lowest level in 20 years.
“The imbalance between supply and demand is continuing to drive home prices higher in most regions, further eroding affordability,” the BCREA said in a May 15 press release.
The average MLS residential sale price in B.C. in April 2017 was $728,955.