Photo: Kris Arnold/Flickr
With stricter mortgage regulations in effect, BC home sales plummeted last month, and are likely to continue declining for the rest of the year.
In March, a total of 7,409 homes changed hands across the province, down roughly 25 per cent from the same month in 2017, according to the latest data from the British Columbia Real Estate Association (BCREA), published Thursday.
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In Greater Vancouver, home sales dropped nearly 30 per cent to 2,551 units in March compared to 3,632 homes a year ago.
“With the effect of the B-20 mortgage regulations and the effect of higher interest rates, we’re going to see lower levels of sales year-over-year. [And] that will continue for most of this year,” BCREA Economist Brendon Ogmundson tells BuzzBuzzNews.
Home sales across the province have been in a downward spiral since the rules were introduced on January 1.
“When the rules were implemented, we’ve seen down months in every board for about three straight months, which is kind of what we expected. But we also expect it to start bottoming out pretty soon and recovering,” says the economist.
However, as demand has taken a hit, supply conditions across the province have not improved.
In March, active listings across BC remained relatively unchanged compared to a year ago, and are at or near a12-year low. A total of 25,186 listings were recorded last month. As a result, prices are expected to continue rising.
“We’re still seeing markets that are under-supplied at two or three months of supply, which is extremely low. It’s not surprising that we’re seeing average prices climbing in the double-digit realm,” says Ogmundson.
The average price of a home in BC was $726,930 last month, up 5.3 per cent from March 2017.
In Greater Vancouver, prices hit $1,022,523 — a three per cent uptick from $991,690 a year ago.
BC remained in sellers’ territory last month with a sales-to-active listings ratio of 39.3 per cent compared to 29.4 per cent a year ago.
Going forward, Ogmundson says BC prices are likely to increase, as it will take time to achieve a sustained drop in demand and a significant build-up in listings.