B.C. real estate: Higher interest rates lead to drop in demand, BCREA says

Rising interest rates that are pushing the cost of mortgages up are putting a damper on the housing market, according to the BC Real Estate Association (BCREA).

It says this has all led to a drop in demand.

“Canadian mortgages have sharply increased, surpassing four per cent for the first time in a decade,” said BCREA Chief Economist Brendon Ogmundson.

“With interest rates rising, demand across B.C. is now on a path to normalizing. However, given existing levels of supply, markets conditions remain tight.”

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The number of homes sold fell 34.9 per cent this April compared to a year earlier. Meanwhile, the average price of an MLS residential listing was 12.9 per cent higher this year compared to April 2021.

The number of properties listed for sale in April 2022 were 7.5 per cent lower than they were the same time last year, though the BCREA says that number is starting to “accumulate” in some areas as demand slows.

The BCREA also says it will likely take at least a year for supply to return to balanced levels.

According to figures released in early May by the Real Estate Board of Greater Vancouver (REBGV), home sales dropped by almost 35 per cent in April 2022 compared to the same month in 2021.

Home sales were still above the 10-year average, by 1.5 per cent.