Why home listings may have hit a 20-year low in BC

VANCOUVER (NEWS 1130) – It appears the local housing market continues its cooling trend. The BC Real Estate Association (BCREA) says a total of 9,865 residential unit sales were sold last month, down 23.9 per cent from the same period last year.

The agency says total sales volume was $7.19 billion, which is also down 25.4 per cent from April 2016. The average MLS residential price in the province was $728,955, a two per cent decrease from the same period last year.

“BC home sales are on an upward trend this spring, led by a sharp increase in consumer demand in the Lower Mainland,” explains BCREA Chief Economist Cameron Muir. He adds the seasonally adjusted annual rate of home sales was over 106,000 units in April, which is way above the five-year SAAR for April of 89,000 units.

UBC Economist Tom Davidoff says it’s hard to find people who are motivated to sell their home because of capital gains on their principal residence. “It seems like idiosyncratic reasons for the move are more common. But we’ve had such extreme movements here in Vancouver that it may be a lot of mobility has been driven by changes in prices, the so-called halfers — [who] sell their home, taking half the equity and putting the other half into real estate on Vancouver Island.”

The BCREA says the supply of homes for sale declined 17 per cent from April 2016. “On a seasonally adjusted basis, active residential listings have declined 50 per cent since 2012 and are now at their lowest level in over 20 years. The imbalance between supply and demand is continuing to drive home prices higher in most regions, further eroding affordability,” adds Muir.

Given these statistics, some may continue to speculate that the region is inching closer to a market crash. “The puzzling thing is at the high-end to me, especially if you look at single-family homes, the rent you pay in and around Vancouver versus the price you pay — you’ve got to be really optimistic that this market is going to do well for a very long time. It’s very hard to spend $6,000 or $7,000 a month on a home, but it’s very, very easy to pay considerably north of that in mortgage payments,” explains Davidoff.

Year-to-date, BC home sales dropped 31.8 per cent to $21.3 billion, when compared with the same period in 2016. Residential unit sales declined 25.0 per cent to 30,757 units, while the average residential price was down 9.2 per cent to $692,220.

National home sales drop in April 2017

• National home sales fell 1.7 per cent from March to April.
• Actual (not seasonally adjusted) activity in April was down 7.5 per cent from a year earlier.
•  The number of newly listed homes jumped 10 per cent from March to April.
• The MLS home price index was up 19.8 per cent year-over-year in April 2017
•  The national average sale price rose 10.4 per cent year-over-year in April.

 

(Source: Canadian Real Estate Association)