BC Real Estate: Rising interest rates slow sales

Some of the most dramatic sales declines occurred in Chilliwack, which saw a 54% drop in sales in June from a year earlier.

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High mortgage rates are dampening real estate markets across the province as interest rates continue to climb from historic lows, the BC Real Estate Association said.

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In June, 7,136 residential sales were recorded on the Multiple Listing Service (MLS), down 35.7% from last June and down 13% from the previous month.

Total sales volume last month was $6.8 billion, down nearly 33% from June 2021.

In its latest report released on Tuesday, the association said some markets and housing types have shifted to balanced or even buyers’ markets as high interest rates keep potential buyers away.

“While a still-growing economy and robust population growth indicate strong demand, it is increasingly difficult to meet that demand at current interest rates,” said BCREA Chief Economist Brendon. Ogmundson, in a statement. “As a result, sales activity across the province, but especially in more expensive markets, continues to slow. »

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Some of the most dramatic sales declines occurred in Chilliwack, which saw a 54% drop in sales in June from a year earlier.

Powell River (46.3%), Fraser Valley (43.8%), Okanagan (38%) and Metro Vancouver (35.5%) are also seeing fewer buyers closing the deal.

The only region to see an increase in sales is South Peace River. It recorded 59 sales in June, a 9% increase from the same month in 2021.

Sales are slowing despite an increase in the number of active listings: In June, the number of active listings in the province increased by 16.4% compared to June 2021, BCREA said.

Prices, on the other hand, have not budged. Compared to June 2021, residential prices across the region have increased, except in the South Peace River.

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The average home price in British Columbia was pegged at $951,105, up 4.6% from the $909,657 recorded last June.

In Greater Vancouver, the average home price is nearly $1.8 million, an increase of 10.8% from June 2021, while the Fraser Valley average price sits at $994,491. $, an increase of 18%.

Vancouver Island, which saw a nearly 26% year-over-year price increase, has an average home price of $635,430.

In a housing forecast released last May, the BCREA said Canadian interest rates largely dictated the direction of the housing market.

While the first quarter of 2022 was not too different from the record pace set in 2021 during the pandemic when interest rates fell to historic lows, the market is now adjusting to rising interest rates. interest.

Home sales are expected to fall to “historically normal levels” for the remainder of 2022 before falling to “slightly below average levels of activity” in 2023.

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