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Data points: B.C. housing sales falter in February, retail sales start 2024 down

Relatively high interest rates continue to impact buyers on multiple fronts
B.C. housing sales fell from January to February 2024

B.C.’s housing market performance faltered in February as home sales fell, retracing most of the gains made in the prior month. Seasonally adjusted MLS home sales declined 7.2 per cent to 5,706 sales as buyer sentiment took a hit from more certainty on the timing of rate cuts. This followed a 7.4-per-cent gain in January as momentum in late 2023 flowed into the first month of the year. Home prices in the province pulled back one per cent in February, but prices remain elevated, making home ownership still out of reach for many.

MLS home sales decreased sharply in most of the province’s real estate board areas. Greater Vancouver region and the Fraser Valley saw sales decline by 7.3 per cent and 10.3 per cent, respectively, after two months of consecutive increases. In Chilliwack, home sales fell by 26.6 per cent while the Kootenays reported a 11.4-per-cent decrease. In addition to these declines, the Okanagan-Mainline and South Okanagan both recorded sales decreases of 14.9 per cent and 0.9 per cent, respectively. Home purchases in Kamloops declined for a third month, accelerating from a 0.5-per-cent decline in January to fall 3.7 per cent in February. In contrast, home sales on Vancouver Island rose by 3.1 per cent.

Overall home values in B.C. fell in February and now sit at an average of $959,435. Prices have fluctuated since mid-2023, but this average is down 10.1 per cent from a historical high in February 2022, and below the 2023 peak by 4.4 per cent. The drop was driven by price declines in Greater Vancouver, where home values decreased 0.7 per cent, eroding gains in January. In both the South Okanagan and Okanagan-Mainline, home prices fell by 6.6 per cent and 4.5 per cent, respectively. Meanwhile, average prices rose in the Fraser Valley (up 0.4 per cent), on Vancouver Island (up 4.6 per cent), in the Kootenays (up 0.5 per cent), in Kamloops (up seven per cent) and in Chilliwack (up 2.9 per cent).

On the retail sales front, B.C. seasonally adjusted sales fell to $8.9 billion in January, down 2.2 per cent from December 2023. Unadjusted sales in January 2024 were also down 1.9 per cent year over year. This is the lowest monthly figure since March 2023, when sales were also $8.9 billion. Six out of nine subsectors saw lower year-over-year unadjusted retail sales. Leading the decline were furniture and appliances retail stores, which saw sales fall 15.9 per cent from 2023 to 2024. This was followed by gasoline stations and fuel vendors (down 8.6 per cent) and motor vehicle and parts dealers (down 3.8 per cent). Balancing the sales declines in those sectors were higher sales among health and personal care retailers (up 10.9 per cent), building material and garden equipment retailers (up 11 per cent) and general merchandise retailers (up 3.8 per cent).

In the Metro Vancouver area, seasonally adjusted retail sales for January 2024 were down 1.6 per cent compared to December 2023. Year over year, monthly unadjusted retail sales were also down 0.5 per cent.

Bryan Yu is chief economist at Central 1.

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