Home prices across all home types in Metro Vancouver rose again in July, as strong sales figures continue to push up against low levels of housing inventory.

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BCREA 2023 Third Quarter Housing Forecast

Vancouver, BC – August, 2023. The British Columbia Real Estate Association (BCREA) released its 2023 Third Quarter Housing Forecast Update today.

Multiple Listing Service^® (MLS^®) residential sales in BC are forecast to decline 2.8 per cent to 78,640 units this year. In 2024, MLS^® residential sales are forecast to post a modest rebound, rising 6.1 per cent to 83,425 units.   

 “The BC housing market has been more resilient than expected in 2023, with both home sales and prices holding up well in the face of sharply higher interest rates,” said BCREA Chief Economist Brendon Ogmundson. “However, we expect sales to cool as the result of renewed Bank of Canada tightening and a delay in expectations regarding the timing of future Bank of Canada rate cuts from early next year to perhaps the end of 2024 or even mid-2025.”

Because inventory remains very low, prices rose through much of 2023 despite below-average sales. The average price in BC has varied widely throughout this year, beginning the year below $900K before reaching just over $1 million in May as sales in more expensive markets surged amid dwindling supply. If the average price trends near its current level of $970K over the year's second half, it would mean an annual average price of $976K in 2023, or a 2 per cent decline compared to 2022. As home sales return to normal levels next year, we anticipate prices will rise 2.4 per cent to an annual average of just over $1 million, though there is risk to the upside on price growth given the state of housing supply.

For the complete news release, including detailed statistics, click here.

To view the BCREA Housing Forecast Update PDF, click here.

For more information, please contact: Gino Pezzani.

Canadian retail sales increased 0.1 per cent in June to $65.9 billion, led by sales by motor vehicles and parts dealers. Excluding volatile items, sales were down 0.9 per cent month-over-month. In volume terms, retail sales declined 0.2 per cent in June. Retail e-commerce trade rose by 1.1 per cent to $3.7 billion in June, amounting to 5.7 per cent of total retail sales. 

Sales in BC fell 4.8 per cent in June following a very strong May number. BC retail sales are down 1.7 per cent from the same time last year. In the CMA of Vancouver, retail sales were down 3.1 per cent from last month and 2.2 per cent from June of 2022. 

Link: https://mailchi.mp/bcrea/canadian-retail-sales-june-2023-august-23-2023

For more information, please contact: Gino Pezzani.

Canadian housing starts fell 10 per cent to 254,966 units in July at a seasonally adjusted annual rate (SAAR). Starts were down 8 per cent from the same month last year. Single-detached housing starts fell 4 per cent to 55,093 units, while multi-family and others fell 12 per cent to 199,873 (SAAR).

In British Columbia, starts fell by 23 per cent in July to 50,733 units SAAR in all areas of the province. In areas in the province with 10,000 or more residents, single-detached starts fell 25 per cent m/m to 4,760 units while multi-family starts fell 25 per cent to 42,970 units. Starts in the province were 5 per cent above the levels from July 2022. Starts declined by 10.8k in Vancouver, 0.6k in Victoria, 3.3k in Kelowna, and 0.4k in Abbotsford from the previous month. The 6-month moving average trend in BC remained essentially unchanged at 51,423

Link: https://mailchi.mp/bcrea/canadian-housing-starts-july-2023

For more information, please contact: Gino Pezzani.

Canadian prices, as measured by the Consumer Price Index (CPI), rose 3.3 per cent on a year-over-year basis in July, up from 2.8 per cent in June. Easing of gasoline base-year effects compared to last year was responsible much of the increase. Excluding gasoline, CPI rose from 4 per cent to 4.1 per cent in July. Shelter costs were up 5.1 per cent year over year, driven by much higher mortgage interest costs (up 30.6 per cent from last year) along with rents (up 5.5 per cent). The homeowner's replacement cost, which tracks home prices, was down 0.9 per cent year over year. Grocery prices were up 8.5 per cent year over year. Month over month, CPI rose 0.6 per cent. In BC, consumer prices rose 3 per cent year-over-year.

The annual change in CPI jumped back above 3 per cent in July, largely due to disappearing base-year effects for gasoline. Although food price inflation continued to gradually ease, shelter and rent inflation rates rose from June. Moreover, the Bank of Canada's measures of core inflation, which strip out volatile components, remained stubbornly high. With softening labour markets and a weak preliminary June GDP estimate, a September overnight rate hike had seemed unlikely. However, bond yields rose following the July CPI release, indicating the option is still on the table. Guiding inflation back down to 2 per cent was sure to be a bumpy ride and the Bank will be closely watching the retail sales and GDP releases scheduled prior to the September 6th rate decision. 

Link: https://mailchi.mp/bcrea/canadian-inflation-july-2023

For more information, please contact: Gino Pezzani.

For the complete news release, including detailed statistics, click here.

Vancouver, BC – August, 2023. The British Columbia Real Estate Association (BCREA) reports that a total of 7,103 residential unit sales were recorded in Multiple Listing Service^® (MLS^®) systems in July 2023, an increase of 25.9 per cent from July 2022. The average MLS^® residential price in BC was $967,948, up 5.6 per cent compared to July 2022. The total sales dollar volume was $6.9 billion, representing a 33 per cent increase from the same time last year.  

“Home sales are up significantly since this time last year,” said BCREA Chief Economist Brendon Ogmundson. “That said, there are signs that the most recent Bank of Canada rate increases are slowing activity as mortgage rates climb to their highest levels in over a decade.”

Active listings in the province were flat compared with July 2022, at just over 31,000 total listings and were up for the second consecutive month on a monthly, seasonally adjusted basis, as new listings return to more normal levels and sales moderate. 

Year-to-date BC residential sales dollar volume was down 20.9 per cent to $46.3 billion, compared with the same period in 2022. Residential unit sales were down 16.3 per cent to 47,508 units, while the average MLS^® residential price was down 5.4 per cent to $975,232.  

For more information, please contact: Gino Pezzani.

Canadian employment remained essentially unchanged at 20.17 million in July. The Canadian unemployment rate rose to 5.5 per cent from 5.4 per cent in June, rising for the third consecutive month. Total hours worked were up 2.1 per cent year over year, while average hourly wages were up 5 per cent from July of last year.

Employment in BC was also little changed in July holding steady at 2.79 million, while employment in Metro Vancouver rose 0.2 per cent to 1.57 million. The unemployment rate fell to 5.4 per cent in BC, down from 5.6 per cent in June, while rising to 6 per cent in Metro Vancouver. 

Link: https://mailchi.mp/bcrea/canadian-employment-july-2023-august-4th-2023

For more information, please contact: Gino Pezzani.