September’s total home sales across the province started to see the same slowdown that has been happening in the Lower Mainland since early summer, with transactions dropping 11.9 per cent year over year to 7,591 units, according to British Columbia Real Estate Association figures released October 14.
“Housing demand in the province continued to trend lower in September,” said Cameron Muir, BCREA chief economist. “While Vancouver, Fraser Valley and the North experienced year-over-year declines, the rest of the province posted an increase in the number of residential transactions.”
In September, the Interior boards took over as the fastest-growing markets, with the highest year-over-year rises in sales seen in the South Okanagan (+35.8 per cent), Kootenay (+26.1 per cent) and Okanagan Mainline (+25.4 per cent) regions. Growth slowed somewhat in Vancouver Island and Victoria compared with recent months, but both boards still posted annual sales increases, at 18.6 and 10.5 per cent respectively.
But unlike in August, those increases were not enough to offset declines seen in the larger markets of Greater Vancouver and the Fraser Valley, which saw annual drops in home sales of 32.7 and 23.2 per cent respectively.
The average sale price of a home in BC fell a relatively modest 3.2 per cent year over year to $585,844, resulting in the total dollar volume of home sales in September dropping 14.1 per cent compared with a year earlier, to $4.45 billion.
However, the average MLS® sale price in September was 2.9 per cent higher than August 2016’s $569,393 – a figure that was pulled down by a hiatus in the number of higher-end detached homes exchanging hands, immediately following the introduction of the overseas buyer tax August 2.
“The average residential price in the province continued to reflect a change in the composition and location of homes sold,” added Muir. “However, the effect was less pronounced in September than in August, when detached home sales fell to just 28 per cent of total demand in Vancouver.”
Despite the declines, because of the scorching sales and prices seen in the spring and summer, year-to-date BC residential sales dollar volume totalled $66 billion, which is an increase of 33.5 per cent compared with January-September 2015. Total residential unit sales in 2016 so far have increased 18.5 per cent over 2015’s January-September sales, to 93,797 units, keeping the province on track to fulfill predictions of more than 100,000 sales this year.
Across the whole of Canada, it was a different story for September’s sales figures, with residential transaction rising slightly compares with one year ago, according to the Canadian Real Estate Association’s (CREA) statistics, also released October 14.
National home sales totalled 44,096 in September, a 4.2 per cent rise compared with one year previously and a 0.8 increase over August’s transactions.
The national MLS® Home Price index was up 14.4 per cent year-over-year in September to $576,100.
The CREA report said, “Continuing recent trends, sales climbed further in and around the Greater Toronto Area (GTA) and fell further in and around the Lower Mainland of British Columbia.
“As previously reported, Greater Vancouver and Fraser Valley home sales had retreated sharply for five months straight before the new foreign buyers’ tax in Metro Vancouver was announced in August. Activity has returned to more normal levels after having peaked at the start of this year. Indeed, most of the decline since the April peak in national sales reflects the rapid drop in activity in and around BC’s Lower Mainland.”
CREA President Cliff Iverson took the opportunity to comment on the new mortgage qualification rules introduced recently by federal finance minister Bill Morneau.
“The Finance Minister’s recent changes to regulations affecting mortgage lending has added to housing market uncertainty among buyers and sellers,” said Iverson. “For first-time home buyers, the stress test for those who need mortgage default insurance will cause them to rethink how much home they can afford to buy.”
Gregory Klump, CREA’s chief economist, added, “First-time home buyers, particularly in housing markets with a lack of affordable inventory of single-family homes, may be priced out of the market by the new regulations that take effect on October 17. First-time buyers support a cascade of other homes changing hands, making them the linchpin of the housing market.”
To read the full BCREA report, click here.
To read the full CREA report, click here.