British Columbia’s housing market kept its cool last month, with a decrease in residential unit sales of 45.8 per cent from the same time last year.
According to the B.C. Real Estate Association (BCREA), there were 4,977 sales recorded by the Multiple Listing Service in September. At $4.6 billion, however, the total sales dollar volume decreased 44.9 per cent from September 2021.
“We’re in a very different market now than we were even at the beginning of this year,” Brendon Ogmundson, chief economist for the BCREA, told Global News.
“Of course we’re in that market because interest rates have more than doubled since the start of the year.”
Last month, the BCREA predicted B.C. real estate sales would slump by a total of more than 34 per cent by the end of the year, with more decline on the horizon for 2023.
In the numbers released Wednesday, it was noted that residential unit sales have already decreased 31.8 per cent year-to-date.
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In the Fraser Valley, the average residential price has recently dropped by 5.3 per cent, from more than $1 million in September 2021 to $952,076 last month. Active listings, however, increased from 3,084 to 4,992 — change of 61.9 per cent.
In Chilliwack, active listings the percentage change was 142.1 — from 515 in September 2021 to 1,247 last month.
In addition to increased rates, Ogmundson said the “trends” that drove urbanites out of big cities during the peak of the pandemic — including a desire for more square footage — are winding down.
“During the pandemic, a home had to be a school, an office, a rec centre — a lot of people could find that much more affordability in Abbotsford, Chilliwack or Langley,” he explained. “That affordability just isn’t there anymore.
“The other big one is, are we sure that working from home is going to be as permanent a thing as we maybe thought during the pandemic?”
Soaring gas prices as a contributing factor, he added, noting a commute to Vancouver is much less appealing now than it was early in the pandemic.
In Greater Vancouver, the average residential price for September increased from nearly $1.17 million in 2021 to $1.23 million. The number of active listings went up 7.2 per cent as well, from 9,728 to 10,427.
“Vancouver didn’t have those same drivers due to the pandemic,” said Ogmundson.
“That demand (in sales) is still there. There’s still a lot of potential buyers, it’s just really hard to turn that demand into sales activity at current prices and rates.”
According to Royal Bank of Canada economists Nathan Janzen and Claire Fan, the central bank is expected to pause its rate hike cycle in late 2022 if inflation continues to show signs of “meaningfully” easing. If not, further increases are warranted.
— with files from Kamil Karamali
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