British Columbia home sales will fall 34.4 per cent this year from the record-setting pace of 2021 and stumble down a further 11.4 per cent in 2023, according to the most recent forecast from the BC Real Estate Association (BCREA).
The factors that led to unprecedented sale and price increases since the pandemic began two years ago are “unwinding” said BCREA Chief Economist Brendon Ogmundson.
Record low mortgage rates and a buyer preference for extra space, which helped drive sales higher across the province, have collided with six interest rates hikes so far this year as the government tries to tame high inflation.
“As a result, there has been a significant shift in the housing market, which we anticipate will continue through 2023,” Ogmundson added.
The BCREA released its 2022 Fourth Quarter Housing Forecast November 8. Multiple Listing Service residential sales in the province are forecast to decline to 82,345 units this year and fall to 72,960 next year. This is down from 124,800 transactions in 2021 and nearly 100,000 in 2020.
“With continued high-interest rates and what looks like a difficult 2023 ahead for the Canadian economy, we anticipate that market activity is going to fall below normal levels next year. On the supply side, slow sales activity has led to an increase in inventory, but from record lows,” the BCREA forecast noted.
The average price of a home in B.C. will increase 4.6 per cent this year to $970,000 compared to a year earlier, but prices are already down about 12 per cent from the peak in February of 2022.
The average B.C. home price will decline a further 5.4 per cent to $917,900 in 2023.
In Greater Vancouver, the composite home price will drop 5.2 per cent to just over $1.16 million, while the Fraser Valley will see the biggest year-over-year decline, at 7.8 per cent, to an average home price of $959,200 in 2023, according to the BCREA.