Kamloops home prices rose by $10K each month since early pandemic: study

Two Thompson Rivers University researchers published a recent study showing the rise in housing prices in Kamloops is more drastic than they initially uncovered.

Jabed Tomal and Hafiz Rahman have found that the cost of owning a home in the Kamloops area rose by nearly $10,000 each month from April 2020 to October 2021, in a data set that included single-family homes, townhouses and condos alike.

This sharp increase is extreme when compared to pre-2015 real estate data.

From January 2010 to August 2015, they found the average cost of a home rose by $333 each month. This jumped to $1,953 each month from August 2015 to April 2020, coinciding with the adoption of the foreign buyers tax.

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After the COVID-19 pandemic struck, the increase in home prices shot up to an average of $9,463 more each month, in a market that included multiple offer scenarios and bidding wars.

"This is probably due to multiple causes such as COVID-19 issues, buyers’ migration from larger to smaller cities, low mortgage interest rates and investors’ speculation purchases," the researchers stated.

The foreign buyers tax in the Lower Mainland put pressure on housing prices in other communities, like Kamloops, according to Rahman, associate professor of economics, and Tomal, assistant professor in the statistics and mathematics department.

They first published those findings in October, which examined housing statistics in Chilliwack and Kamloops from January 2011 to July 2020.

In their initial published study, they found the adoption of the foreign buyers tax in Chilliwack stabilized that market, and they compared it to Kamloops which is not subject to the same tax.

They have now published a new paper just weeks later with expanded Kamloops real estate statistics. In a study published Nov. 14, they examined data from January 2010 to October 2021.

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The expanded data set, which is derived from the Canadian Real Estate Association, shows a sharp increase in home prices in late 2015, coinciding with the foreign buyers tax implemented in Vancouver and area.

In October, the average cost of a home reached $619,265 — over $150,000 above the average price just one year earlier.

The Kamloops and District Real Estate Association places much of the blame on a lack of inventory to keep up with demand.

"In the simplest terms, high consumer demand continues to drive sales, but it’s the supply that’s holding the entire market back. This leads to constant upward pressure on average prices and may begin directing buyers away to more affordable areas in the province," association president, Chelsea Mann said in a press release.

However, they have seen a downturn of houses listed for sale as potential sellers are likely hesitant about the prospect of buying another home in the current housing market.

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Go here to read the newly published study.

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