Population growth paired with limited supply driving up Capital Region housing prices

Population growth paired with limited supply driving up Capital Region housing prices
Nicholas Pescod/CHEK News

Most of the nearly 6,000 people who moved to the Capital Region last year flocked from other parts of the country, according to the latest BC Check-Up: Live.

The annual report by the Charted Professional Accountants of British Columbia (CPABC) dives into demographic and affordability trends across B.C. and finds that 5,941 people moved to the Capital Region District (CRD) in 2021, bringing the total population to 432,062.

LL Brougham Inc. president Lindalee Brougham says while that’s “slightly below” levels set in pre-pandemic years, local population growth has “remained resilient” compared to the rest of B.C. 

“This has been primarily from the region’s ability to attract residents from other parts of the country,” said Brougham in a press release.

The report notes the CRD’s population grew by 6.2 per cent between 2017 and 2021, with around 5,286 people coming from out of province and another 1,712 from other parts of B.C.

Newcomers got settled as the region experienced a decline in international migrants arriving over the last two years, with mortalities exceeding births by 1,251 in 2021.

“With one of the lowest fertility rates in Canada, we need to attract immigrants to grow our population,” said Brougham, noting the local population is ageing as around a quarter of residents are 65 or older.

“As more residents retire, that will put additional pressure on businesses that are already facing significant shortages of labour. To continue to attract migrants, we need to ensure we have enough housing,” she said.

While the CRD added 31,500 people over the last five years and 16,842 new housing units were completed, the CPABC finds the number of new larger units stayed “relatively flat.”

“Across the region, there has been strong housing construction activity,” said Brougham. “However, developments have typically been smaller attached units replacing older stock, with limited mid-sized units.”

Pointing to Victoria Real Estate Board (VREB) data, Brougham says the strong demand for larger units is putting “significant pressure” on local housing prices for family homes. 

READ ALSO: Victoria real estate sales drop as prices continue to climb

According to the VREB, the MLS Home Price Index benchmark value for a single-family home in the Victoria Core hit $1,464,400 in June — a 23.6 per cent jump year over year when the benchmark value was $1,184,700.

Brougham says while recent interest rate increases may put downward pressure on the housing market, the lack of supply will continue to drive up housing prices over the longer term.

The Bank of Canada raised its key interest rate by an entire percentage point last Wednesday, marking the most significant single rate hike since August 1998.

“If we want to attract immigrants to grow our economy and support our aging community, we need all levels of government to actively advance policies to boost housing supply to improve affordability,” added Brougham.

READ ALSO: Interest rates hike already felt in Victoria

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