According to a bulletin released today by the British Columbia Real Estate Association (BCREA), it appears that the residential real estate market in BC is finally beginning to normalize after a heated period fueled by pent-up demand from the pandemic and record low rates.
Based on BCREA’s compilation of data from property managers across the province, there were a total of 8,939 home sales in April 2022 – a 35% drop from the same month in 2021.
Total sales volume was worth $9.5 billion, down 26.5% from April 2021. Also, total sales volume declined 10.7% in the first four months of 2022 to $38.4 billion, compared to the same period in 2021.
In addition, within the Lower Mainland, unit sales decreased 34.5% in the jurisdiction of the Real Estate Board of Greater Vancouver (REBGV) from 5,010 units in April 2021 to 3,281 units in April 2022, falling 44.8% in the Fraser Valley Real Estate Board (FVREB) jurisdiction from 2,869 units in April 2021 to 1,583 units in April 2022.
Sales volume decreased from $6.07 billion in April 2021 to $4.4 billion in REBGV, while volume also decreased from $2.99 billion in April 2021 to $1.82 billion in April 2022 in FVREB. This equates to year-on-year declines of 27.5% and 39% respectively.
And this activity is being driven by the Bank of Canada’s interventionist rate hikes, with more hikes likely in the remainder of this year.
“Canadian mortgages are up sharply, exceeding 4% for the first time in a decade,” BCREA chief economist Brendon Ogmundson said in a statement.
“With interest rates rising, demand across BC is now heading for normalization. However, given existing supply, market conditions remain tight.”
But, of course, home prices are still rising, with a countywide average price of $1,065 million in April 2022 — up 13% from $944,000 in April 2021. Up 7% year-over-year to $1.34 billion, while average home prices in FVREB are up 10% year-over-year to $1.147 billion.
However, the number of active homes in the province was 7.5% lower in April 2022 than in April 2021, although supply is starting to pile up in some markets and demand is slowing. BCREA expects it to take a year or more for listings to return to balanced market levels.