BC home sales have dropped 31.7 per cent year over year, with the rest of the province feeling a ripple effect from Lower Mainland market declines, according to statistics from the BC Real Estate Association (BCREA) published March 15.
There were 6,580 MLS® transactions across the province in February, said the BCREA, with nine of BC's 12 real estate boards posting year-over-year declines. The biggest drops by far were seen in Greater Vancouver and the Fraser Valley, followed by Chilliwack, Vancouver Island and Victoria.
“Consumer demand has returned to a more typical level over the first two months of the year,” stated Cameron Muir, BCREA’s chief economist. “While the home sales have declined nearly 32 per cent from the extraordinary performance of a year ago, last month’s activity reflected the average for the month February since the year 2000.”
The average BC home sale price was down nearly 11.7 per cent from the record $779,419 in February 2016, standing at $688,117. The BCREA added, “However, this change is largely the result of a decline in the proportion of provincial sales originating from the [relatively more expensive] Vancouver region. [In February], 37 per cent of BC home sales occurred in the Real Estate Board of Greater Vancouver’s area, compared with 44 per cent in February 2016.”
Indeed, although nine boards cited year-over-year sales declines, only three regions (Greater Vancouver, the Fraser Valley and Northern Lights) posted a drop in average home sale prices. Of those, Greater Vancouver and the Fraser Valley’s average sale price has dropped due to a decline in high-priced home sales – the benchmark price of a typical home in those areas remains elevated over one year ago.
Nationwide Picture
The BCREA released its figures the same day that the Canadian Real Estate Association (CREA) published nationwide housing market statistics for February.
Across the country, home sales fell by 2.6 per cent since February 2016, but increased by 5.2 per cent month-over-month to reach their highest level since April 2016.
The CREA cited the high demand and lack of new inventory in the Greater Toronto Area and environs as leading the monthly sales growth.
“In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings,” said Gregory Klump, CREA’s chief economist, who has been outspoken in his opposition to the government’s new mortgage stress test. “As a result, they aren’t putting their current home on the market. It’s something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up home buyers alike. By contrast, housing markets in urban markets elsewhere in Canada are either balanced or are amply supplied. Because housing market conditions vary by region, further tightening of mortgage regulations aimed at cooling the housing market in one region may destabilize it elsewhere.”
The CREA acknowledge that despite British Columbia leading the country’s year-over-year sales decline, the region is still in a strong seller’s market, along with Toronto and south-west Ontario.
The aggregate composite benchmark price for a home in Canada stood at $564,500 in February, which is nearly 16 per cent higher than one year ago.
This compares with the national average sale price in February of $519,521, up 3.5 per cent from where it stood one year earlier.
The CREA noted that the benchmark price “provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next.”
The report added, “The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.”
