B.C.’s housing market slide deepened through September with lower sales and prices. Further rounds of interest rate tightening by the Bank of Canada and resurgent bond yields will continue to erode purchasing power.
Multiple Listing Service sales fell for an eight consecutive month in September to a seasonally- adjusted 5,068 units according to the latest Canadian Real Estate Association data. This was 4.3 per cent lower than August. Levels have declined a staggering 50 per cent from pandemic peaks and 20 per cent from pre-pandemic February 2020. Soaring interest rates, equity market losses and pessimistic sentiment have pushed buyers out of the market.
Lower home sales were observed broadly among real estate board areas and regions. Combined sales in the Lower Mainland-Southwest fell 3.9 per cent despite a positive bounce in Chilliwack, while Vancouver Island area sales fell 6.1 per cent. Okanagan area sales were down 7.1 per cent. Affordability erosion, rather than local economic factors, is the dominant theme influencing markets at this point.
The sales slump has triggered a buyers’ market reflected in a downward price trend, albeit, the average price held steady with a 0.3 per cent monthly gain to $957,157, marking the first increase since February. Greater Vancouver real estate board prices rose two per cent, while prices fell across the rest of province including a nine per cent decline in Chilliwack, about two per cent on the Island. Benchmark prices, which adjust for composition but typically lag behind average price trends, fell more broadly with a near two per cent decline in the Lower Mainland and pullbacks in Chilliwack (3.3 per cent), the Island (two per cent) and interior (1.2 per cent).
Negotiating power has shifted to buyers, but the evolution of supply has been surprising. While inventory is clearly on the rise, with active listings up about 50 per cent from the beginning of the year, the flow of new listings has eased. This suggests a lack of panic selling and delayed listing as a tight labour market and strong rental demand allow for seller patience.
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