Reflecting similar situations in Toronto and Montreal, Vancouver saw its population drop last year as people increasingly left the city for surrounding areas in search of affordable housing.
According to estimates by Statistics Canada, after rising from 664,156 to 700,015 between 2016 and 2020, Vancouver’s population decreased for the first time in 45 years during 2021. It dipped 6,780 for a total of 693,325.
Nearly two years into the COVID-19 pandemic, the population shifts reflect changing priorities as Canadians turn away from major cities, seeking more space to work from home or start a family.
Increased demand for single-family homes and reduced affordability has sent buyers searching for properties in the Fraser Valley. This is away from Vancouver’s higher prices and limited supply.
Surrey led British Columbia in population growth last year. It added 13,004 new residents for a total population to 614,600. Langley welcomed 4,702 newcomers to reach 166,400.
Housing affordability played a key role in the population shift. The benchmark price for a single-family detached home in the Fraser Valley reached $1,500,000 by the end of 2021. That’s an increase of 39 per cent year-over-year. It is still well below Vancouver’s mark of $1,910,200.
Similarly, Fraser Valley townhouses and apartments reported benchmarks of $765,800 and $549,200. That’s significantly lower than $1,004,900 and $761,800 in Vancouver.
Home construction also reflects a push east across the Lower Mainland. The Canada Mortgage and Housing Corporation reports that 5,819 units began construction in Surrey during 2021, outpacing Vancouver (5,464) by six per cent.
Low housing inventory
However, the entire region continues to experience record low inventory. There’s an imbalance of supply and demand. New construction projects have experienced delays due to supply chain issues, labour shortages and red tape.
“Supply of housing in Metro Vancouver has fallen to record low levels and, due primarily to local governments, construction of new homes is not keeping pace with the current population,” said Kevin Skipworth, partner and chief economist at Dexter Realty.
Vancouver’s housing starts mix included 567 single-family houses, 370 townhouses, 103 rowhouses, and 4,410 apartments. Surrey reported 800 single-family houses, 22 townhouses, 1,097 rowhouses, and 3,900 apartments.
It remains to be seen if Vancouver’s population will decrease in 2022. The lack of housing supply is expected to keep upward pressure on prices. This will reduce affordability and force first-time buyers to look elsewhere if they hope to enter the market.
“A fundamental flaw in the Metro Vancouver and many other real estate markets that we are experiencing right now is a significant lack of homes,” Skipworth said. “Demand side measures clearly are not the long-term answer. At some point there needs to be real effort to increase supply and allow it to be increased in a meaningful way.”
