Home Sales In BC Take 35 Percent Plunge As Interest Rates Shoot Up

The housing market is beginning to see a real slowdown brought on by high interest rates which led to a plunge of more than 35 percent in home sales across BC, cooling the hot lower mainland housing market that had seen house prices shoot up significantly. Home prices are also on the way down. While the province’s average home price climbed more than nine per cent year-over-year to just over $1 million according to data from the British Columbia Real Estate Association, it was down six per cent from the $1.065 million recorded in April.

By DESIBUZZCanada Staff

VANCOUVER – The housing market is beginning to see a real slowdown brought on by high interest rates which led to a plunge of more than 35 percent in home sales across BC, cooling the hot lower mainland housing market that had seen house prices shoot up significantly.

Home prices are also on the way down. While the province’s average home price climbed more than nine per cent year-over-year to just over $1 million according to data from the British Columbia Real Estate Association, it was down six per cent from the $1.065 million recorded in April.

The association noted that sales slid as well, with 8,214 residential homes exchanging hands last month, down approximately 35 per cent from last May and eight per cent from April, reported Postmedia.

 “Canadian mortgage rates continue to climb,” said BCREA chief economist Brendon Ogmundson in a press release accompanying the data. “The average five-year fixed mortgage rate reached 4.49 per cent in June. That is the highest mortgage rates have been since 2009.”

B.C. is not alone in seeing a slowing housing market. Other provinces have seen activity cool as well, led by major cities such as Toronto (which saw home prices drop for the third straight month in May), Montreal and Calgary.

Vancouver home sales slipped nearly 10 percent from April to 2,918 units in May, also hitting a 32 per cent drop year-over-year in sales, according to data from the Real Estate Board of Greater Vancouver. The price of a home in B.C.’s most populous city remained relatively flat in May at $1.26 million.

The Bank of Canada’s hiking path has so far taken the overnight rate up to 1.5 per cent and signals that the Bank may have to get even tougher on inflation could put upward pressure on mortgage rates. Higher rates are keeping more would-be buyers on the sidelines.