As the second largest, and fastest growing city in British Columbia, Surrey, is considered the Number One city for Real Estate Investing. Located in Metro Vancouver with convenient access to Vancouver, the Fraser Valley, the Trans-Canada Highway, Vancouver International Airport, Port of Vancouver, and the U.S., Surrey sits strategically within close proximity to many major transportation routes. Surrey's enviable Pacific Rim location for international trade to Asian and the United States, combined with a diverse economy, deliver substantial business opportunities. Sectors such as clean energy, finance, insurance, real estate, technology, advance manufacturing, education, health, agriculture and the arts help safeguard Surrey's economy and make it one of the more resilient cities when it comes to economic booms and busts.
With more than 16,800 active businesses across a wide array of industries and a 6% growth in business in 2016 over 2015, Surrey is a city to watch for economic development and growth.
With employment opportunities expanding and a municipal government dedicated to creating a vibrant business network that catalyzes the expansion of innovation, investment, entrepreneurship and jobs within the city, Surrey attracts business. They aim to be North America’s next Metropolitan Centre. The city has a robust economic strategy outlining how it will become a regional nexus for commerce. Surrey plans to attract investment, grow innovation, build distinct and competitive business communities and create jobs.
In 2015, the median total income of households in Surrey was $77,494, an increase of 8.9 per cent from $71,177 in 2005.
With a population of more than 500,000 that is forecast to grow and surpass Vancouver by 2041 to become B.C.’s largest city, it’s no wonder Surrey claims, “The future lives here.” Over the period of 2011 to 2016, the population growth rate of Surrey was 10.6 per cent, nearly double the national and provincial averages. Surrey welcomes roughly 1,000 new residents each month.
Relative to other Canadian cities, this population growth is among the leaders. One of the most youthful cities in B.C., with a median age of 38.7 and one-third of its population under the age of 19, Surrey’s population is at an optimal level. This encourages both economic and infrastructure development, which further attracts a younger demographic.
HOUSING - REAL ESTATE VALUES
Over the longer term, the average selling price for residential listings continues in an upward trend, as expected in its position in the real estate cycle. However, while increasing, Surrey’s real estate remains more affordable than many of Metro Vancouver’s communities, ranking 16 of 19.
While recent statistics show the average home price decreasing, this is not a reason for alarm as there has been a shift in the mix of homes sold from a majority of higher-priced homes to a majority of lower-priced. In other words, drawing on the affordability concerns that affect the Metro Vancouver real estate market, more budget-friendly condos and townhomes, rather than expensive single-family homes, are selling, affecting the average price. The benchmark price of a detached home crossed over one million dollars in September 2017.
HOUSING - INVENTORY AND SALES
In September 2017, year-over-year sales increased and active listings decreased. However, demand remains strong. According to the Fraser Valley Real Estate Board (FVREB), growing demand for condos and townhomes led to the second strongest August historically in terms of sales. Additionally, the FVREB recently announced this was the fifth highest sales total for a September in the Board’s history. The demand continues to be there despite the longer-term average price-increase trend.
RENTAL TREND AND VACANCY RATES
The impact of a growing population is also evident in the very low vacancy rate and the upward rental cost trend. Recently, the average single-bedroom rent rate was $901. However, according to PadMapper in October 2017, the median rent for a one-bedroom apartment increased by 38.74 per cent to $1,275. The two-bedroom rental rate increased 74 per cent over the previous month to $2400. This may be a statistical anomaly (given there were a high number of highvalue rentals in that month,) or more likely the sign of a trend driven by demographics.
This trend upward of “family oriented” properties will continue to push rents up at a pace faster than the provincial average. Vacancy rates continue to drop due to the lack of availability, recently reaching as low as 1.2 per cent.
These rental increases and vacancy decreases, over the long- and short-term are consistent with the recovery to early boom phases of the real estate cycle.
The main conclusion for strategic investors from these key drivers is that Surrey is a unique combination of a youthful, growing city with a diverse economy that is relatively affordable compared to the rest of the Metro Vancouver region.