August 2021 – Fraser Valley Real Estate Market Snapshot
To date 2021 has been a hot seller’s market overall and surprisingly the month of August was one of the busiest on record. August is typically a slower month for real estate sales all around and sales are usually comparative to December, this is due to people being away on vacation (or staycation given our circumstances with COVID-19). Looking at the month of August for this year in the Fraser Valley, it has seen some of the highest year-to-date price increases in line with some of the lowest available inventory on the market.
To help battle affordability and price increases from not only supply and demand but also the escalating cost of construction and development permitting across the valley, developers and architects are creating more and more efficient homes. It is now common to see two-bedroom condos under 700 sq.ft. Ensuring there is no wasted space in a home helps to increase the efficiency of the home and keep at a size that can be priced more affordably than larger units with wasted space (hallways are a great example of wasted unusable space being eliminated as much as possible).
In June of this year, the government increased the mortgage stress test, further reducing the buying power for entry-level first-time home buyers. Hopefully, this is eliminated or reduced after the election this September, as instead of helping people own their own home, it hinders them and even pushes some people out of the homeownership market altogether while ensuring those already in or with deep pockets maintain their real estate wealth. It would be great to see a government that introduces some municipal accountability that would help increase supply to the market, thus helping slow price escalation, in addition to trade policies that will help maintain or reduce costs of construction. These are the only two policies that will truly help with this low supply and high demand issue we are currently experiencing today.
These policies will take years to implement if they are even contemplated and instated at all. Real Estate always has its ups and downs but does go up in the long run, especially in British Columbia and the Fraser Valley as a sought-after place to live with only so much developable land to offer. Being bordered by mountains to the East and North, the ocean to the west and the border to the USA to the South, there is not much room left over to ‘sprawl’ as they say, however, we can go up. This is already happening at the existing and upcoming high-rise towers seen in Surrey City Centre and the announcement of Langley’s first tower is currently in the planning process. Anytime one can get in the market they should and with interest rates still at an all-time low, there are still great opportunities to purchase what is affordable to you now so that you can gain equity over 5 to 10 years and then purchase the dream home desired. Some even buy a condo and rent it out while renting themselves to gain enough equity over a 5-to-10-year period to purchase a townhome or single-family for themselves later. This is due to living circumstances and not being able to afford the space they need for their family today but can afford something smaller that they are able to rent and gain equity on to go towards the purchase of the space they need later when the equity gained gives them the down payment required on a much higher price.
A great place to start the search are with new low-rise condo developments in Surrey and Langley. Buying them when they are first released means there are no mortgage payments to make until completion, allowing plenty of time to find a renter for the space or make the decision to move in yourself. Equity will most likely have been gained before completion helping expedite this process.
For anyone looking for a pre-sale condominium offering opportunity like this, check out Prosper coming to the Guildford area of Surrey this fall.