A Million New Residents (And Nowhere To Live) with Andrew Ramlo & Clayton Olson

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BC needs to build more homes in the next 20 years than it has in the last 40 years combined just to house its growing population.

Rennie VP of Advisory Services Andrew Ramlo and Real Estate Institute of BC President Clayton Olson sit down with Adam & Matt this week to unpack their groundbreaking “Demography and Demand” report – the first of its kind in nearly 20 years. From the urgent need for 685,000 new homes in Metro Vancouver to the ongoing exodus of talent from the real estate sector, this data-rich conversation reveals both challenges and opportunities in BC’s evolving real estate market.

Will the province be able to meet unprecedented housing demands? Which real estate careers offer the brightest future in different regions of BC? And with housing demand for owner-occupied properties outpacing rental growth, what product types should investors be eyeing for 2041? Essential listening for anyone interested in the future of BC real estate!

BC Real Estate Forecast 2041: Housing Demand, Career Opportunities, and Market Evolution

BC Housing Demand Forecast 2041

The Lower Mainland is projected to grow by 1.14 million people by 2041, requiring an estimated 627,000 new housing units. This growth exceeds the region’s previous 17-year period, which saw an addition of 924,000 people. Even with recent changes to federal immigration targets, the region is set to grow more in the coming 17 years than in the past. A significant demographic shift is occurring – the Lower Mainland’s fertility rate sits at just 1.24 children per woman, well below the replacement rate of 2.1. Within two decades, all net population growth will come from migration, both international and interprovincial, as deaths will exceed births due to the low fertility rate.

BC Real Estate Market Trends

Housing Demand Shifts The research indicates demand for owner-occupied housing is growing faster than rental demand, with owner-occupied demand projected to increase by 58% compared to 49% for rental properties. This trend is driven by strong growth in the 35-44 age group (move-up buyers) and the 65-plus segment, who are staying in their homes longer than previous generations.

Townhouse Market Opportunities

Townhouses emerge as a notably underserved market segment. While Vancouver’s west side detached homes remain highly desirable, townhouses could provide a practical solution for both growing families and downsizing seniors seeking accessibility without sacrificing outdoor space. The experts express surprise at the relatively low volume of townhouse construction given the demand, noting that land costs and construction expenses have been limiting factors.

Best Places to Invest in BC Real Estate

Several regions show significant potential for growth and investment:

• Victoria: Benefits from stable public sector employment, providing market stability through economic cycles
• Kelowna and Nanaimo: Recording substantial population growth
• North Coast: Shows unexpectedly high projected housing demand
• Northeast BC: Requires substantial workforce growth, needing to add one-third to their development workforce annually

The Lower Mainland is experiencing negative intra-provincial migration, with more people moving to other parts of BC than coming in. This trend is driven by both older residents cashing out and younger people seeking more affordable housing options in other regions.

Real Estate Career Opportunities in BC

A striking contrast exists in workforce demographics between development and conveyancing sectors. The development sector (construction and trades) maintains a relatively young workforce, with the largest age group being 25-34, representing about a quarter of the workforce. This younger demographic reflects years of focused effort to promote trades as desirable occupations, with colleges particularly emphasizing construction and development career paths.

In contrast, the conveyancing sector (realtors, mortgage brokers, notaries, and appraisers) faces potential staffing challenges, with its largest age group being 45-54, also representing about a quarter of the workforce. This older demographic is approaching early retirement age, with many set to reach traditional retirement age within the next decade. The disparity is particularly pronounced in some regions where the average age in the conveyancing sector exceeds 50.

This aging trend in conveyancing has received far less attention than the trades shortage did in 2007. Career fairs and networking events continue to see strong interest in development roles, while conveyancing careers like mortgage brokering receive less attention from young professionals. The research suggests this creates significant opportunities for new entrants, particularly in smaller communities where services like notaries are increasingly difficult to find.

The Northeast region of BC presents particularly compelling opportunities, needing to add one-third to their development workforce annually just to maintain current demand. Meanwhile, regions like the North Coast have seen dramatic growth in development sector employment, expanding from just 60 people in 2011 to 400 by 2021.

Current BC Real Estate Market Conditions

While long-term fundamentals remain strong, current market conditions present several challenges. High lending rates are affecting both homebuyers and developers, creating a multi-faceted impact on the market. On the development side, many developers are hesitating to launch pre-sale projects due to uncertain absorption rates. This hesitation is particularly significant given the Real Estate Marketing and Development Act’s requirement that projects must be marketed within a 12-month window, making it difficult for developers to meet their targets in the current environment.

The market faces additional complexity from recent policy changes, including the flipping tax and short-term rental regulations. These policies, while well-intentioned, have created unintended consequences in various markets. In Kelowna, for example, while converting 1,100-1,200 short-term rentals to long-term rentals might seem positive for housing availability, it represents about 20% of the city’s total tourist accommodation when compared to Kelowna’s 4,400-4,500 hotel rooms. This significant reduction in tourist accommodation could impact Kelowna’s tourism sector, illustrating how housing policies can have broad economic consequences beyond their intended effects on the housing market.

The combination of high financing costs and policy uncertainty has led many market participants to take a wait-and-see approach. Buyers are waiting for mortgage rates to decrease, while developers are watching the resale market closely before launching new projects. This pattern is evident across the country, with BC experiencing similar trends to other provinces, except for Alberta, which remains something of an anomaly in the current market. However, there are signs of market stabilization, with sales volumes beginning to increase in many regions throughout BC and prices starting to stabilize or climb in some jurisdictions. Experts suggest that within six to eight months, the pre-sale market may begin to show renewed vitality.

BC Real Estate Market Outlook 2041

Despite current challenges, BC’s real estate market fundamentals remain robust. The combination of continued population growth, aging demographics, and migration patterns suggests sustained demand for housing and real estate services through 2041. While affordability challenges are likely to persist, opportunities exist across various regions and market segments.

The research indicates that BC communities will need to build more housing units in the next 20 years than were constructed in the previous 40 years combined just to meet projected demand. This unprecedented construction requirement, combined with demographic shifts and regional growth patterns, suggests significant opportunities for both industry professionals and investors across various BC markets.