High Rates Will Hold Back Sales Over the Next Year

0
82

BCREA 2023 Fourth Quarter Housing Forecast

VANCOUVER, BC: The British Columbia Real Estate Association (BCREA) released its 2023 Fourth Quarter Housing Forecast.

Multiple Listing Service (MLS) residential sales in BC are forecast to decline 4.8 per cent to 76,700 units this year. In 2024, MLS® residential sales are forecast to post a modest rebound, rising 4.8 per cent to 80,375 units.

“Activity in the BC housing market has mirrored movements by the Bank of Canada over the past two years,“ said Brendon Ogmundson, Chief Economist. “As such, there is little reason to believe that sales will meaningfully detach from the anchor that is monetary policy over the next year. Thankfully, it appears that the Bank is at, or at least very near, the end of its tightening cycle and may begin lowering its policy rate late next year.”

After trending down for most of the year, new listings activity has normalized in the second half of 2023, which, combined with slowing sales, has led to a modest uptick in total inventory. Still, at just over 30,000 listings, the supply of homes for sale falls considerably short of the roughly 45,000 active listings that are historically consistent with a healthy, balanced market. Prices saw a significant increase in the first half of the year, but that surge in prices has since given way to a flattening trend as market conditions balance out, albeit at a low level of market activity. We expect a 1.9 per cent decrease in annual prices for 2023 compared to 2022, with a slight uptick expected in 2024, driven by a projected recovery in the latter half of the year.