The BC Real Estate Association is predicting a sharp decline in home sales

Breadcrumb Trail links

1. News
2. Local news

BCREA predicts that high mortgage rates will slow the housing market through 2023.

Publication date:

Sep 09, 2022 • 1 hour ago • 2 minutes read • 28 comments File photo of a real estate sign in Vancouver, British Columbia Photo by JONATHAN HAYWARD/THE CANADIAN PRESS

Article content

Home sales in British Columbia are forecast to continue to decline as high mortgage rates put pressure on the housing market into next year, according to the British Columbia Real Estate Association.

Advertisement 2

This ad has not yet loaded, but your article continues below.

Article content

In its forecast released Thursday, BCREA said home sales in British Columbia are expected to decline 34.4% from a record high in 2021 to 81,900 units this year.

Start your day with a roundup of BC-focused news and opinion delivered straight to your inbox at 7am, Monday to Friday.

By clicking the signup button, you agree to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Thanks for signing up!

A welcome email is on its way. If you don’t see it, please check your spam folder.

The next issue of Sunrise, presented by the Vancouver Sun, will be in your inbox soon.

We encountered a problem registering you. Please, try again

Article content

In 2023, home sales are expected to decline an additional five percent to 77,790 units, according to the agency’s report.

The report also predicts that while the median home price in the province will increase an expected 4.3 per cent this year to $969,400, it will fall 3.1 per cent in 2023 to $939,500.

In Metro Vancouver, the median home price is expected to rise 3.1% to $1,225,000 this year and fall 2.9% to $1,190,000 next year. The numbers are similar for the Fraser Valley, where prices are expected to rise 1.6% to $1,030,000 this year and fall 3.9% next year to $990,000.

Advertising 3

This ad has not yet loaded, but your article continues below.

Article content

On Vancouver Island, median prices are expected to rise 15.4 per cent this year to $768,500, but fall 2.4 per cent next year to $750,000, according to the report. And in the Kamloops area, prices are expected to rise 16.5 per cent this year to $652,000 and then fall slightly to $650,000 in 2023.

Brendan Ogmundson, BCREA’s chief economist, said mortgage rates had risen much faster and to a higher level than previously expected.

“Faced with a dramatic shift in the cost of borrowing, housing market activity is likely to fall well below normal next year,” he said in a statement on Thursday.

Weaker sales and rising inventories mean some regions, mainly in more expensive markets, have moved into buyer’s market territory, Ogmundson added.

Advertising 4

This ad has not yet loaded, but your article continues below.

Article content

The BCREA report said aggressive monetary tightening in response to the highest inflation in decades “quickly sent demand sideways as five-year mortgage rates more than doubled.”

The report notes that both fixed and variable mortgage rates are expected to remain high next year, and as a result, home sales will end 2022 much weaker than last year’s record totals.

However, while the real estate market struggles under the weight of higher interest rates, the report says the downturn is unlikely to last long, as B.C.’s strong population growth means there will be no shortage of search for housing in the countryside.

CORRECTION: An earlier version of this report contained errors. Home prices are expected to rise in most markets this year, not fall, with moderate declines forecast next year.

ticrawford@postmedia.com

1. Horgan is giving $600 million in tax breaks to help curb inflationary pressures

2. Dan Fumano: Ending Vancouver’s ‘Condo Ban’, Progress or ‘Disaster’?

Share this article on your social network

Advertisement 1

This ad has not yet loaded, but your article continues below.

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before they appear on the site. Please keep your comments relevant and respectful. We’ve enabled email notifications – you’ll now receive an email if you get a reply to your comment, there’s an update to a comment thread you follow, or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.