Hire A Top Class Real Estate Agent Who Will Invest In Your Future
How rising mortgage rates are impacting B.C. real estate
Rising mortgage rates are dampening home sales in British Columbia, a just-published real estate report suggests.
The trend of declining sales, noted in several of these monthly reports, continued into May in the province.
According to the B.C. Real Estate Association, there was a 35 per cent drop in sales last month compared to May 2021.
It's been a sellers' market in the province for some time, with a few short dips into what experts consider balanced, but sellers were faring better than ever in 2021. This year, the sales-to-active-listings ratio steeply plummeted when mortgage rates started to rise, though the BCREA still shows the ratio as more in favour of sellers, for now.
The association's chief economist said the average five-year fixed mortgage rate in Canada this month is the highest its been in over a decade. Many buyers who don't need to make a purchase aren't rushing into sales, and are instead waiting to see what happens.
The BCREA said Monday there were more active listings this year, but still below what's typical for a balanced market.
And what experts are seeing across B.C. varies greatly when looking at sales at a regional level. While unit sales are down provincially 35 per cent, some areas saw larger dips, and in one region – South Peace River – sales were actually up 40 per cent.
The region with the greatest decrease in sales in May was the Fraser Valley, where 54 per cent fewer units were sold in May 2022, compared to May 2021.
While sales are down and some listings are staying up longer, most buyers aren't finding real estate deals.
Across the province, buyers are still paying more than they were this time last year, based on the latest data.
The average home price is now at $1 million for the province, an increase of 9.3 per cent from the previous May, when buyers were paying $915,392.
In Vancouver, that average is at $1,279,785, up 8.5 per cent year-over-year. In South Peace River there's a similar increase, but the average is just $297,050.
It's not only people actively involved in the market being impacted by the Canadian mortgage rates, either.
A new debt survey from Manulife Bank of Canada showed nearly one in four homeowners who aren't looking to buy or sell said they'd be forced to put their homes back on the market if interest rates go up much further.
Nearly one-fifth of respondents said they already can't afford their homes, and most Canadians don't view homeownership as an affordable option in their communities.