Top Stories 2017: Skyrocketing real estate market in the news

Prices rising, listings dropping and sales continue to be grabbed up

Other than the weather, few topics created more chatter in 2017 than real estate.

The subject is top of mind for both those in the market and those out of the market across the Lower Mainland.

Across the region prices continue to rise, but nowhere faster than in the Chilliwack region that saw a 12.9 per cent rise in prices for the most recent month of sales.

• RELATED: Chilliwack real estate sales and prices remain hot

Just two years ago, in November 2015, the average home sold in the Chilliwack and District Real Estate Board (CADREB) region went for $359,227. In November 2016 that was $429,276, and last month it hit $484,753.

That’s a 35 per cent increase in home prices in just two years, and it points to the trickle down effect of home prices across the region.

CADREB, which includes Chilliwack, Agassiz, Hope and all points in between, is by far the smallest real estate board in the Lower Mainland.

The average price of a home sold last month in the Fraser Valley Real Estate Board — which includes from White Rock to Abbotsford and Mission — was $705,565. The benchmark price for a home in the Greater Vancouver Real Estate Board is right about $1 million.

• RELATED: Highest ever October real estate sales in Chilliwack

It’s pretty clear from price comparisons – along with anecdotes from Realtors and new arrivals – that 2017 proved Chilliwack to be the last bastion of affordability in the Lower Mainland.

“A ripple effect is being felt well into the Fraser Valley, with median sale prices … up 32 per cent in Delta, 30 per cent in Langley (township), 24 per cent in Abbotsford and 14 per cent in Chilliwack,” according to a report on housing affordability by Vancity on 30 municipalities, including some on Vancouver Island.

For detached homes, Chilliwack ranked second out of 30 on the affordability measure in that report. For townhouses, Chilliwack ranked fourth, and for apartments, Chilliwack was the most affordable with a median price of just $174,500 over the period studied.

Of course, already that has changed as the average sale price of an apartment last month locally was $235,508 up 21 per cent year-over-year.

As home prices skyrocketed in 2017, more and more people moved to Chilliwack and there was also increased pressure on the rental market, long in crisis mode already.

The most recent vacancy rate is just 1.5 per cent in the Chilliwack area, which is quite low but actually compares to 1.4 per cent a year ago, and to the provincial average of 1.3 per cent.

And for those who do have a place to rent, affordability is an issue here. Of the 30,430 households in Chilliwack, 25 per cent are renters and of that number, 51 per cent report spending more than 30 per cent of pre-tax income on rent, and 22 per cent reported paying more than 50 per cent.

What seems a bleak picture regarding housing in Chilliwack in 2017 is of course a somewhat positive one for those already owning real estate.

For those saving to get into the market, there is good news and bad news for 2018. The good news is that the B.C. Real Estate Association forecasts just a small increase in CADREB for 2018. The bad news is that those looking for a first mortgage face a new stress test as of Jan. 1 meaning it will be even tougher to get into the market.

“Not only will potential homeowners need to qualify based on today’s mortgage rates and be within a certain percentage of income going to housing, they will need to pass a stress test, based on their ability to withstand a hike in rates,” CADREB president Greg Nord-Leth said recently.

Demand is high, listings are low, and prices continue to move in a challenging direction for first-time homebuyers.


@PeeJayAitch
paul.henderson@theprogress.com

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