B.C.'s housing sales cycle has gained traction, according to the latest Canadian Real Estate Association data.
Muliple Listing Service sales rose in all regions in July with provincial sales up nearly 14% from June to a seasonally adjusted 6,650 units. This was the first year-over-year gain (12.5%) since January 2018. While sales were the highest in more than a year, levels remain soft and 30% below those observed prior to the implementation of mortgage stress tests at the beginning of 2018.
Sharp declines in mortgage rates and lower prices have induced more buyers to enter the market. A tight labour market and population gains are also contributing to demand. Mortgage stress tests remain a constraint in the market, although buyers are adjusting via increased down payments and delayed purchases. Provincial housing tax measures remain a damper on activity.
Markets in the Lower Mainland-Southwest, which includes Metro Vancouver, the Fraser Valley and the Sea-to-Sky region, rose 20% to lead the way. Southern Interior sales rose 6%, with Vancouver Island up 7%. Northern B.C. sales inched higher by 3%.
Resale inventory also broadly declined in July, reflecting higher sales and fewer new listings flow. While conditions are generally trending in a buyer’s-to-balanced market in most areas, Vancouver Island conditions generally remain tight.
The average B.C. price rose 2.3% from June to $697,964 but remained below year-ago levels by 2%. Relatively stronger sales growth in the higher-priced Vancouver region added upward pressure to provincial price levels. Among board areas, the average price level fell in the Fraser Valley by about 1%, while Metro Vancouver edged higher. Victoria posted a 4% decline while prices rose in the Okanagan, although fluctuating patterns are the norm.
Benchmark home values adjust for compositional effects but are available only for select markets. Values continued to ease in the Lower Mainland with the benchmark price down 0.3% to $943,600, which was the lowest level since mid-2017. Year-over-year, the benchmark price slid 8.4%. Island prices remain firm, with Victoria’s value up 0.3% and 1.2% year-over-year, and the rest of the Island edging down 0.2% from June, but up 3.4% year-over-year.
New-vehicle sales continued to decline into June to trend at the lowest pace since mid-2015. Total sales in the B.C. and territories region of Canada fell 14% from a year ago to 19,818 vehicles to accelerate a downtrend. Year-to-date vehicle sales fell 7.4% although dollar volume declined only 3.5% owing to a higher average price paid per vehicle.•
Bryan Yu is deputy chief economist at Central 1 Credit Union.
