PROPERTY I September sales topped $3 billion in total for seventh straight month
Derrick Penner
Sun
Provincewide real estate sales topped $3 billion in total value for the seventh month in a row in September, the B.C. Real Estate Association reported Friday, putting B.C. on track for an annual record for property transactions for the second year in a row.
British Columbians bought and sold 84,410 homes worth some $27.6 billion, the association said in a news release, which is just shy of the $27.8 billion in transactions completed in all of 2004.
In September, the association added, 9,148 homes changed hands, which was 15.4 per cent more than the same month a year ago, and the value of those transactions hit $3.2 billion, 40 per cent higher than September 2004.
“It’s a confidence bill in the economy,” association president Dave Barclay said in an interview. “The economy just seems to be rolling right along. We’re seeing lots of immigration and lots of migration.”
And mortgage rates, Barclay added, have remained low, although they are beginning to creep up.
Barclay added that buyers can still obtain longer-term mortgages at below five per cent interest, and “consumers don’t seem to be concerned at all.”
Barclay said September sales were strong throughout the province with 11 of the 12 regional real estate boards the association represents reporting double-digit percentage increases in prices.
Even in Smithers, where Barclay is a realtor, activity has been brisk with the high-quality properties selling within 60 days, on average, compared to about 200 days in previous years.
Barclay said the region’s economic recovery has lagged that of the province, but “the [local] ski hill, [Hudson‘s Bay Mountain] just changed hands, and there are lots of positive economic things in the whole of northern B.C.”
Carol Frketich, regional economist for the Canada Mortgage and Housing Corporation, said the B.C. Real Estate Association’s numbers are consistent with what CMHC is seeing in the market “and what we would expect given low interest rates and strong demand fundamentals.
Frketich said that B.C.’s real estate resales in 2005 are running higher than she had predicted in 2004, but mortgage rates are still lower than she had anticipated they would be.
She added that the fall 2005 numbers also appear strong compared with 2004 because sales tapered off toward the end of last year as interest rates began to rise, which Frketich expects will happen in 2006.
Frketich said the Bank of Canada raised its key overnight lending rate Tuesday by a quarter of a percentage point to three per cent, and signs are that it will make further hikes into the new year.
She added that in its latest monetary policy, the central bank said the Canadian economy is running at capacity and “the monetary stimulus has to come out.”
“I’m forecasting a decline in resale activity in 2006, but still at very high levels,” Frketich said.
However, she believes the Bank of Canada will remain cautious about how quickly it raises interest rates because the economy is still dealing with the higher exchange rate on the Canadian dollar and “oil shock” over higher energy prices.
“The rise is going to be gradual, and I don’t anticipate it will have any dramatic effect,” she said.