B.C.’s housing market is showing signs of slowing down as multiple rate hikes take hold, according to the British Columbia Real Estate Association (BCREA).
Data from the industry group released Wednesday (Sept. 13) reveals 6,608 residential units were sold in the province this past August. That’s down from the 7,103 residential unit sales in July and up 15.7 per cent compared with August 2022.
Average pricing remained about the same when compared to July 2023, while the average residential price for all property types decreased by just under one per cent to $958,424. This is an increase of 5.2 per cent compared with the same time last year.
Total sales dollar volume increased by 21.7 per cent to $6.3 billion between August 2022 and August 2023.
“Home sales are starting to settle back into a trend of below-normal activity following an unexpected surge in the spring,” BCREA chief economist Brendon Ogmundson said in a release.
This mirrors RBC’s (TSX:RY) Sept. 7 data analysis of the Vancouver area, which found “back-to-back rate hikes in June and July unsettled many prospective buyers.”
“The spring rally has run its course and a more cautious mood has taken the market over. Buyers have pulled back this summer, especially in August,” said the RBC report.
The Bank of Canada held its key interest rate steady at five per cent last week following two previous hikes in June and July. These rate hikes, combined with low supply, pushed Re/Max Canada to predict in a Sept. 6 forecast that a soft housing market is in store for the fall.
This prediction means a better balance between supply and demand for Metro Vancouver and Kelowna, with an expected softening in sales of five per cent and a decline in prices of two to three per cent, according to Re/Max.
Meanwhile, active listings in B.C. increased 3.5 per cent to 31,000 total listings, according to the BCREA latest report.
On the other hand, residential sales dollar volume decreased by 17.4 per cent to $52.7 billion from August 2022 to August 2023.