The COVID pandemic has had an interesting affect on the real estate market in British Columbia over the past couple of years. And while real estate sales peaked in many areas of the province in 2021/2022, most areas are now seeing the flip side of this trend with prices dropping and inventory staying on the market for longer periods.
According to the British Columbia Real Estate Association (BCREA), residents of the province can expect 2023 to bring lower prices across the board, but the dip is expected to be relatively short-lived, with the market rebounding somewhat in 2024. The main reasons for the price dip in 2023 are due largely to the slowing economy and increasing mortgage rates.
Greater Vancouver will experience the lowest decline in the number of homes being sold and BCREA anticipates a reduction of approximately 4.3%. Prices are expected to drop by about 7.2% with the average home price falling to around $1.18 million.
According to Robert Hogue, assistant chief economist at RBC, activity in the Lower Mainland and Victoria appears to be levelling off.
“Recent declines have slowed quite considerably, and we’re probably not that far off from the bottom. But that being said, the level of activity, even in B.C., is historically low right now. Things are quiet,” he said.
Over the course of the next several months, home prices are expected to drop further. Affordability, however, also remains an issue which will hold the level of activity down and restrict gains for sellers.
As the tide turns and the number of sales starts to increase, the recovery is expected to be subdued. Huge jumps in prices are not expected and we won’t see the frenzy that was experienced in 2021/2022. Higher interest rates, after years of historical lows, will also keep activity in check.
While 2023 may not be a banner year for sales across the Province, BCREA anticipates 2024 will bring a healthier economy and with it, lower mortgage rates. Combined with the expected high level of immigration, all of these factors should assist in the recovery of the market and stimulate home sales once again.
If you’re considering buying or selling your home, contact the team at One Flat Fee to see how we can assist. We’re happy to offer guidance and expertise at the right time to conduct your real estate transaction. Reach out today!