Housing sales in BC took a slight dip in July

Tuesday, August 31st, 2004

Sales for the first seven months of this year still ahead of 2003

Bruce Constantineau

Real estate markets throughout B.C. took a breather last month, with the number of house sales falling 15 per cent below the levels achieved in July 2003, the Canadian Real Estate Association reported Monday.

CREA said the number of Multiple Listing Service sales in the province fell to 8,433 in July from 9,927 a year earlier. The total dollar volume of those sales fell by more than six per cent to $2.376 billion.

But the year-to-date figures for the first seven months of 2004 are still far ahead of last year’s activity. Total MLS home sales throughout B.C. rose by nearly 12 per cent to 61,505, while total dollar volume increased by 27 per cent to $17.59 billion.

“The market has gone from red hot to merely hot,” said ReMax Real Estate Services owner David Andrews. “There are more listings than there was a year ago, but it’s still towards the tight end of the market, with a little upward pressure on prices.”

Vancouver realtor Bob Rennie said the dip in summer sales activity is normal, and noted that strong summer sales in recent years were unusual for the Vancouver market.

“I think people are confusing the summer slowdown with some kind of bubble bursting,” he said. “I think the market is fine. We can’t have lineups [with people snapping up new condo units] all the time.

“It’s really healthy now. People can go look at it, go home and then come back later and buy.”

Rennie noted his company sold about 60 condos this past weekend at the upscale Shangri-La project at Georgia and Thurlow, where prices range from $400,000 to $4.4 million.

“These are real buyers looking for a great place to live, they’re not looking to flip,” he said.

Real Estate Board of Greater Vancouver president Andrew Peck said an increasing number of listings that come onto the market in late spring caused buyers to take more time and look at more properties.

“The higher number of listings allowed people an opportunity to take a breather and take more time for their buying decisions,” he said.

Peck said the fundamentals driving the B.C. housing market include a relatively strong economy, strong investor confidence and low interest rates.

“If any of those things were to change drastically, then you would see a real altering of the real estate market,” he said.

On the national scene, the Canadian housing market also cooled somewhat this summer from the steamy levels seen in spring with both home sales and prices easing in July for the second straight month.

But CREA said the market remains strong and should remain so through the rest of this year thanks to relatively low interest rates and strong job growth earlier this year.

The number of existing homes that changed hands in July fell to 38,337 from 39,527, once adjusted for seasonal fluctuations, while the average selling price, at $224,117, remained below its peak of $230,418 set in May, the industry association reported Monday.

Compared with a year earlier, the average selling price was up 7.7 per cent, the first time this year that the increase has been below 10 per cent.

Still, average selling prices in all provinces were at an all-time high for the month of July and the total dollar volume of sales at $8.4 billion, while down from the peak of $9.1 billion set in March, was the fifth highest monthly level on record, the association noted.

“Yes, we’re coming off record levels but the market remains strong,” association economist Gregory Klump said in an interview. “I expect sales will remain at their current levels over the rest of the year and we do expect further price increases.”

Klump predicted year-to-year house price increases to move up to the high single-digit level for the rest of this year but not back to the double-digit increases seen earlier this year.

“Many renters who could afford to buy have gone into the housing market so some of the pent-up demand has been released,” Klump said.

“Sales continue to trend higher in Quebec and remain relatively stable in Saskatchewan, Manitoba, New Brunswick, Prince Edward Island and Newfoundland,” the industry association said. “Meanwhile, activity continues to trend lower from its peak reached earlier this year in British Columbia, Alberta, Ontario, and Nova Scotia.”

The number of new listings, adjusted for seasonal variations, also eased in July to 60,934 from 62,799, offering further evidence that the market is cooling off but keeping the balance between sales and listings steady.

Provincially, the average selling price of a home was highest in British Columbia at $281,750, up 10.4 per cent from a year earlier. The only other province to see a double-digit increase in prices was Nova Scotia where prices on average were 12.2 per cent higher than in July 2003 at $130,320.

© The Vancouver Sun 2004

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