B.C.’s housing market is projected to remain resilient throughout the rest of 2023 despite the impact of previous and potential interest rate hikes.
Residential sales are expected to decrease by 2.8 per cent to 78,640 units by the end of the year, according to an Aug. 29 housing forecast from the B.C. Real Estate Association (BCREA).
“The B.C. housing market has been more resilient than expected in 2023, with both home sales and prices holding up well in the face of sharply higher interest rates,” Brendon Ogmundson, the industry association’s chief economist, said in the forecast.
Residential sales in 2024 are anticipated to rise 6.1 per cent to 83,425 units across the province, according to the BCREA.
Meanwhile, the Conference Board of Canada said B.C. should expect a protracted economic slowdown in the coming year owing to higher mortgage lending rates and high consumer debt.
The think tank projects B.C.’s economy will grow this year by an anemic 1.1 per cent, followed by 1.5 per cent in 2024 and 2.8 per cent in 2025.
The Bank of Canada has hiked interest rates 10 times since March 2022 in a bid to tamp down on inflation.
“The average price [across all housing types] in B.C. has varied widely throughout this year, beginning the year below $900,000 before reaching just over $1 million in May as sales in more expensive markets surged amid dwindling supply,” said the BCREA forecast.
The BCREA predicts that the average price of homes in B.C. will be $976,000 in 2023 – or a two per cent decline compared with 2022 – if prices remain around $970,000 throughout the second half of this year.
Average prices are expected to rise by 2.4 per cent to just over $1 million in 2024 as sales return to normal levels, according to the forecast. The BCREA notes that there is “risk to the upside on price growth given the state of housing supply.”
“We expect sales to cool as the result of renewed Bank of Canada tightening and a delay in expectations regarding the timing of future Bank of Canada rate cuts from early next year to perhaps the end of 2024 or even mid-2025,” said Ogmundson.
Unit sales in Metro Vancouver are projected to decline 4.3 per cent to 28,000 by the end of 2023 and then rise by 7.1 per cent to 30,000 in 2024. The BCREA predicts home prices will rise 0.2 per cent to $1,275,000 before going up another 1.2 per cent to $1,290,000 in 2024.
–With files from Nelson Bennett
