The residential property market in the province of BC continued its downwards momentum in August. Following fewer sales and rising inventory, there appears to be little sign of resurrecting a market bogged down by tighter lending conditions and a swath of government tax policies.
Home sales in the province dropped 26% year-over-year in the month of August. There were just 6748 sales in BC, a six year low for the month. The slowdown was rather daunting in the Fraser Valley where sales slid an eye watering 39.5% in August. Greater Vancouver sales fell 37%, Victoria by 21%, and the Okanagan-Mainline by 20%. Regardless of how you slice it, the trend was rather ominous.
Despite the rather gruesome numbers, BCREA’s chief economist Cameron Muir preferred to take the more optimistic approach. Suggesting, “The downturn in housing demand induced by the mortgage stress-test is now largely behind us. The BC housing market is evolving along the same path blazed by Ontario and Alberta, where the initial shock of the mortgage stress-test is already dissipating, leading to increasing home sales.”
Buyer sentiment disagrees. BC home buyers spent 27% less on residential real estate this August. Mortgage credit continues to contract, while simultaneously foreign buyers have lost their appetite for real estate, reducing their spending by 49% this summer.
With peak sales in the rearview, and inventory finally on the rise, up 19.6% from August 2017, it appears further headwinds are a certainty for BC’s housing market.