1 / 2 Home sales across B.C. expected to fall 34.4 per cent this year compared to 2021, but shortage of listings will keep prices
stable.| Western Investor
British Columbia’s housing market dynamics are set to experience a significant decline. The BC Real Estate Association predicts a 34.4% drop in home sales this year, following a record-setting 2021. They anticipate another 11.4% dip in 2023. These changes result from factors unwinding from the unprecedented sales and price increases of the past two years.
Changing Market Dynamics
Market dynamics are shifting. Low mortgage rates and a preference for more space boosted sales, but they now face challenges from six interest rate hikes aimed at curbing high inflation. Analysts expect this shift to continue through 2023.
Sales Projections
The BCREA’s projections for 2022’s Fourth Quarter Housing Forecast anticipate a decline in residential sales to 82,345 units in 2022 and a further drop to 72,960 in 2023. This represents a significant decrease from the 124,800 transactions in 2021 and nearly 100,000 in 2020. Economic challenges in 2023 are expected to contribute to below-normal market activity.
Price Trends and Adjustments
While the BC housing market expects the average home price to increase by 4.6% to $970,000 in 2022 compared to the previous year, prices have already seen a 12% decline from the peak in February 2022. Looking ahead, analysts project the average home price to decrease by 5.4% to $917,900 in 2023.
Regional Variations
In Greater Vancouver, the composite home price is expected to drop by 5.2% to just over $1.16 million. The Fraser Valley faces the most significant year-over-year decline, with a projected 7.8% drop, bringing the average home price to $959,200 in 2023, according to the BCREA’s forecast.
Conclusion: Navigating Challenges Ahead
In conclusion, British Columbia’s real estate market is undergoing a notable shift, marked by declining sales and price adjustments. The coming years pose challenges amid changing economic conditions and market dynamics.