B.C. housing prices to drop roughly 5% in 2023, real estate association predicts

British Columbia real-estate market It’s unlikely to bounce back anytime soon to the record days of 2021, according to the latest forecast from the BC Real Estate Association.

the BREATH forecasts a 34.4% drop in residential sales on the Multiple Listing Service from last year through the end of this year and a further 11.4% drop in 2023.

The association, which represents more than 25,000 estate agents in the province, also forecasts a decline in the provincial median house price of around five percent next year.

“I think 2023 is going to be a challenging year for the housing market,” BCREA Chief Economist Brendon Ogmundson told CKNW’s Jill Bennett Show.

“Interest rates are the highest we’ve seen since 2007 and we’ll probably see the economy slow down, so those factors mean continued slow activity in the housing market.”

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The Fraser Valley is forecast to see the largest average price drop on the Multiple Listing Service in 2023, around 7.8 percent, according to the fourth-quarter update released Tuesday. Chilliwack and surrounding communities follow with an expected decline of 6.2 percent.

Greater Vancouver could see an average price drop of 5.2 percent, BCREA said, while Victoria could see a 4.3 percent drop. The Kootenay region is also expected to see a 4.3 percent drop, while average prices in the Okanagan could decline by 4.9 percent.

“Depending on where you look in the province, home prices peaked in February 2022. They fell for about four or five months and are really leveling off right now,” Ogmundson said.

“I think where we are now pricing is more or less what our forecast is for 2023.”

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Across the province, sales have continued their predicted decline and there are currently around 30,000 listings on the market, the economist added. He said the province would need to have around 45,000 listings or more to be considered “in balance” in the long term.

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“We’re just not seeing inventory gains like we’ve seen in previous downturns…that’s why we’re seeing prices leveling off.”

By the end of the year, the largest declines are forecast in Chilliwack and District, Fraser Valley, Greater Vancouver, Okanagan, and Victoria, at 47.9%, 41.6%, 33.2%, 33.1%, and 31.7 %. , respectively.

“Things are very slow and I think we’re going to carry that into next year, hopefully things will pick up in the second half of next year, but overall we’re going to have very slow market activity for the next 12 months. Ogmundson said.

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The forecast of the BCREA echoes that of the Canada Housing and Mortgage Corporation, which is also calling for a steeper drop in the Canadian real-estate market in the middle of more than expected inflation Y interest rate increases so far this year.

Last month, the Crown corporation said in an updated housing outlook that it believes the national median home price in Canada will fall 14.3 per cent by the second quarter of 2023, compared to a record high of $770,812. seen in the first quarter of this year.

Statistics Canada’s latest inflation reading showed prices rising at a 7.0 percent annual pace in August, with “core” metrics remaining high. The Bank of Canada has since made it clear that its benchmark rate will need to be raised further before the end of the year to control inflation.

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CMHC expects the central bank’s policy rate to hit 4.0 percent by the end of the year, up from 0.25 percent in early 2022.

— with Craig Lord files

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