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B.C. home sales are forecast to continue to slump, as high mortgage rates put pressure on the housing market through to next year, according to the B.C. Real Estate Association.
The BCREA predicts high mortgage rates will slow the housing market through 2023.
B.C. home sales are forecast to continue to slump, as high mortgage rates put pressure on the housing market through to next year, according to the B.C. Real Estate Association.
In its forecast released Thursday, the BCREA said residential sales in B.C. are forecast to decline 34.4 per cent from a record high in 2021 to 81,900 units this year.
In 2023, home sales are forecast to fall an additional five per cent to 77,790 units, according to the agency’s report.
The report also predicts the average price of a home in the province will drop down an anticipated 4.3 per cent to $969,400 this year and a further 3.1 per cent in 2023 to $939,500.
In Metro Vancouver, the average price of a home is expected to dip 3.1 per cent to $1,225,000 this year and 2.9 per cent to $1,190,000 next year. The numbers are similar for the Fraser Valley, where prices are expected to fall 1.6 per cent to $1,030,000 this year and by 3.9 per cent next year to under a million at $990,000.
Some of the steepest declines in home prices are forecast for the Kamloops region and on Vancouver Island, where average prices are expected to tumble by 15.4 per cent this year to $768,500 and another 2.4 per cent next year to $750,000, according to the report. In Kamloops, prices are anticipated to plunge 16.5 per cent this year to $652,000 but only slightly next year to $650,000 (0.3 per cent.)
Brendon Ogmundson, the BCREA’s chief economist, said mortgage rates have risen at a much faster rate and to a higher level than previously anticipated,.
“Faced with a dramatic shift in the cost of borrowing, housing market activity is likely to fall well below normal over the next year,” he said, in a statement Thursday.
Weaker sales and rising inventory mean that some regions, mainly in more expensive markets, have tipped into buyers’ market territory, added Ogmundson.
The BCREA report says aggressive monetary tightening in response to the highest inflation in decades “quickly sent demand to the sidelines as five-year mortgage rates more than doubled.”
The report notes both fixed and variable mortgage rates are expected to stay elevated over the next year, and as a result, home sales will finish 2022 much weaker than last year’s record-breaking totals.
However, while the real estate market struggles under the weight of higher interest rates, the report says the downturn is unlikely to be long-lived as B.C.’s strong population growth means there will be no shortage of demand for housing in the province.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
The Canadian Press. All rights reserved.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
The Canadian Press. All rights reserved.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
The Canadian Press. All rights reserved.
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