Home sales in B.C. are starting to slow down, but that doesn’t mean housing prices are going to fall any time soon.
The British Columbia Real Estate Association released their first-quarter housing forecast update on Wednesday (Feb. 2). The update said residential sales in B.C. are forecast to decline 17 per cent from 2021’s record high — dropping to 103,250 units this year. The decline is expected to continue into 2023, sales are forecast to fall an additional 12 per cent to 90,200 units.
“We expected home sales in 2022 to moderate from the frenetic pace of 2021,” said BCREA chief economist Brendon Ogmundson. “However, sales activity will remain high by historical standards.”
B.C. is entering 2022 with the lowest level of active listings on record but demand remains high. Ogmundson wrote that this will lead to persistent strong sales through the first months of the year while supply remains “severely limited”.
“As a result, continued upward pressure on home prices is expected in all markets.”
The Association predicts home prices will rise by 8.5 per cent in 2022. There is some relief on the horizon for would-be home buyers — the Association predicts sales activity will normalize in 2023 and price growth will slow to 2.7 per cent.
“Slower sales activity will allow the inventory of resale listings to rebuild, but given how low listings currently are, it will take considerable time before markets can return to a healthy balance,” Ogmundson wrote. “In fact, active listings in most markets need to more than double to bring markets back into balance.”
The Association forecasts some of B.C.’s hottest housing markets will be Victoria, Greater Vancouver and the Fraser Valley where they expect average sale prices to exceed $1 million.