High interest rates continue to have a chilling effect on BC’s housing market as sales plummet, active listings level off and average prices fall.
The BC Real Estate Association October Report shows a 45.5% drop in the number of sales, a 47.2% drop in the sales volume and a 3.1% drop in the average price compared to the same period last year.
“It’s pretty much a continuation of the trends we’ve seen since rates started rising, and rising rapidly,” said Brendon Ogmundson, the association’s chief economist.
“We have tariffs at their highest level since 2007 and increasing at the fastest rate since the early 1990s. This is having a major impact on business activity.”
The current state of the market means buyers will have more time and more choices than they did amid the frenetic activity of 2021, when low inventory sparked bidding wars and rapid sales on many listings.
“Buyers probably have the upper hand a bit, but generally what we’re seeing is a market that sort of finds some balance,” Ogmundson said.
“As long as we have rates at these levels, we are going to see fairly slow activity. On the supply side, it looks like things are plateauing. We are just getting back to pre-pandemic levels of active listings in the month. last about.”
Sellers will have to adjust, he adds, to the reality that their listings will stay in the market longer and that process may need to be scaled back.
“Anytime you have a market that’s moving that quickly, the expectations of buyers and sellers — especially price — are quite far apart,” says Ogmundson, saying sellers are slower to adapt to changes.
A regional breakdown shows that price and activity declines are most pronounced in the Fraser Valley, which includes Surrey and Langley, and further east in Chilliwack. In the first, the average price is down 8.3% while sales are down 53.9%. In the latter, the price fell 11.9% while sales fell 60.9%.
Ogmundson says that’s largely due to a pullback in demand in those markets, where a desire for extra space and a shift to working from home drove up demand and prices in the early days of the pandemic. With people returning to in-person offices and high gas prices, commuters are generally focusing on properties closer to downtown.
In Greater Vancouver, year-over-year prices were up 0.7% from 2021, averaging $1,231,805. Ogmundson says the relatively modest fluctuation reflects the fact that demand in this area hasn’t seen the same kind of rapid increase as in other markets.