13.5-per-cent drop hits market, B.C. Real Estate Association reports
Bruce Constantineau
Sun
B.C. housing sales lost ground during the first three months of this year — dipping 13.5 per cent below last year’s pace for a total of 18,635 Multiple Listing Service transactions, the B.C. Real Estate Association reported Friday.
The total value of those sales fell 1.8 per cent to $8.9 billion, although the average residential selling price rose by 13.5 per cent to $478,423.
BCREA chief economist Cameron Muir said eroding affordability has squeezed some buyers out of the market, while a 25-per-cent increase in the number of B.C. homes for sale — to around 40,000 — has reduced the chances of competing bids on the same property.
“The signs [of falling sales] have been around for months, but even though sales are off, they’re still relatively high by historical standards,” Muir said in an interview.
He said economic fundamentals in B.C. remain strong and continue to fuel housing demand, despite weakness in the forest sector.
Muir said the strong Canadian dollar has created problems for the B.C. softwood lumber and tourism sectors, but other parts of the provincial economy remain strong — including pulp, retail sales, construction and mining.
He does not expect a “significant” market correction this year, which would mean even sharper sales drops and falling prices.
“Significant corrections like that happen when you have a big increase in mortgage rates and a poorly performing economy. Neither is likely to happen,” Muir said.
“Prices should still climb by single digits this year and a little bit less next year, compared with recent double-digit price gains. A lot of those price gains have already taken place this year.”
BCREA said monthly MLS sales across B.C. fell by 22 per cent in March to 7,128 units, while the average residential price rose by 12.3 per cent to $488,796. The value of March housing sales declined 12.4 per cent to $3.48 billion.