The average selling price of a BC home was $900,980 in May, up more than 25 percent, or $189,800, from the same month last year.
That is undoubtedly a huge annual increase, but this figure actually represents a decline from the previous month. According to commentary from Central 1 Credit Union, it’s buyers who are now “shying away” from the highest priced segment of the market driving the slight monthly dip in prices.
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The credit union’s Deputy Chief Economist Bryan Yu wrote that fewer high-priced homes sold in May likely because more buyers opted for lower-priced properties. This “compositional” effect led to the monthly decline in the average BC home price, which Yu said was the lowest average since February.
Homebuyer fatigue brought on by soaring prices and a dearth of homes on the market has led to monthly sales declines across the province since transactions peaked in March. Now, the average price is showing early signs of following suit, albeit at a very gradual rate.
Yu went on to note that optimism around declining COVID-19 cases and loosening restrictions is also contributing to a decline in pandemic-driven housing demand.
“Further moderation in sales and prices are forecast to flatten in the latter half of this year. Affordability erosion will continue to slow sales, while the continued recuperation from the pandemic will continue to temper pandemic driven demand,” Yu wrote.