According to a bulletin today by the British Columbia Real Estate Association (BCREA), it appears BC’s residential real estate market is finally beginning to normalize, following a heated period spurred by the pandemic’s pent-up demand and record low rates.
Based on BCREA’s compilation of data from real estate boards across the province, there were a total of 8,939 home sales in April 2022 — representing a decrease of 35% from the same month in 2021.
The total sales volume was worth $9.5 billion, which is a 26.5% drop from April 2021. As well, over the first four months of 2022, the total sales volume was down 10.7% to $38.4 billion, compared to the same period in 2021.
Moreover within the Lower Mainland, the number of units sold dropped by 34.5% in the Real Estate Board of Greater Vancouver’s (REBGV) jurisdiction from 5,010 units in April 2021 to 3,281 units in April 2022, and fell by 44.8% in the Fraser Valley Real Estate Board’s (FVREB) jurisdiction from 2,869 units in April 2021 to 1,583 units in April 2022.
The sales volume dropped from $6.07 billion in April 2021 to $4.4 billion in REBGV, while the volume also dropped from $2.99 billion in April 2021 to $1.82 billion in April 2022 in FVREB. This represents year-over-year drops of 27.5% and 39%, respectively.
And this activity is driven by the Bank of Canada’s interventionist rate hikes, with more hikes likely through the remainder of this year.
“Canadian mortgages have sharply increased, surpassing 4% for the first time in a decade,” said BCREA chief economist Brendon Ogmundson in a statement.
“With interest rates rising, demand across BC is now on a path to normalizing. However, given existing levels of supply, markets conditions remain tight.”
But home prices, of course, are still on the rise, with the average province-wide price reaching $1.065 million in April 2022 — up by 13% from $944,000 in April 2021. Average home prices in REBGV are up by 10.7% year-over-year to $1.34 billion, while average home prices in FVREB are up by 10% year-over-year to $1.147 billion.
However, provincial active home listings were 7.5% lower in April 2022 than in April 2021, although listings are beginning to accumulate in some markets with demand slowing in pace. BCREA expects it will take a year or more for the supply of listings to return to balanced market levels.