CPABC: Kootenays’ strong population growth outpacing housing supply, pushing prices to record highs

CRANBROOK, British Columbia, June 16, 2021 (GLOBE NEWSWIRE) -- According to BC Check-Up: Live, an annual report by the Chartered Professional Accountants of British Columbia (CPABC) on demographic and affordability trends across the province, the Kootenays’ population growth of 1,200 residents in 2020 was approximately three-quarters of the gain 2019, bringing the total population to 163,123 residents.

“The region’s population growth has slowed from its peak in 2016, when the region welcomed over 2,400 new residents. As a result of the COVID-19 pandemic there were fewer international immigrants, particularly non-permanent residents such as temporary workers,” said Mike Calder, CPA, CA, partner at BDO Canada. “Despite the decline, the region has seen reasonably strong growth over the past five years.”

The Kootenays’ population increased by 3.8 per cent between 2016 and 2020, as a growing number of residents moved to the region from other parts of Canada. In 2020, the Kootenays saw a net increase of 1,277 residents from other provinces and over 400 from other regions across B.C., a majority of which were 39 years old and younger.

“It is a good sign that the Kootenays are attracting residents from both within BC and outside the province,” continued Calder. “With an aging population and declining birth rates, the region needs to continue to welcome residents from elsewhere.”

In fact, mortalities in the region exceed the number of births in the region, and the gap has continued to grow. In 2020, the number of mortalities exceeded births by 455, putting downward pressure on the region’s population growth. This trend is a result of an aging population and a large number of senior citizens.

The Kootenays’ average age in 2020 was 45.3 years, well above the provincial average of 42.6 and up from 44.7 in 2016. Those aged 65 and older made up 24.0 per cent of the population in 2020, the highest of any age group and up 2.5 percentage points from 2016.

“In order to attract more residents to the region, we need to ensure there is adequate housing supply. In the past five years, Cranbrook and Nelson only saw 727 new housing units built, which is not enough to supply housing for the growing number of new residents across the region,” noted Calder. “The significant increase in demand for a limited supply has been one reason why housing prices have been on the rise recently.”

The average house sold in the Kootenays in May 2021 cost $458,121, up by 24.4 per cent compared to May 2020. Rental rates have also been on the rise, with the average Cranbrook three-plus bedroom costing $1,152 a month in 2020, up by 18.5 per from 2019.

“One reason the region has been attractive to migrants has been the economic opportunities and relatively affordable housing prices compared to other regions,” concluded Calder. “That advantage has eroded recently as housing sales and prices soar to record highs. Going forward, it will be important to encourage greater housing construction so both current and future residents are able to afford housing.”

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The Chartered Professional Accountants of British Columbia (CPABC) is the training, governing, and regulatory body for over 37,000 CPA members and 5,500 CPA candidates and students. CPABC carries out its primary mission to protect the public by enforcing the highest professional and ethical standards and contributing to the advancement of public policy. CPAs are recognized internationally for bringing superior financial expertise, strategic thinking, business insight, and leadership to organizations.