B.C. real estate market slows as mortgage, interest rates rise: BCREA

New numbers from the BC Real Estate Association (BCREA) confirm rising mortgage rates have slowed the housing market considerably.

Residential sales in the province were down 35.1 per cent in May compared to the same time last year.

The average five-year fixed mortgage rate is now 4.49 per cent — the highest it’s been since 2009, according to BCREA Chief Economist Brendon Ogmundson.

There’s also been more stock around B.C., with the latest figures showing active listings in the province were 4.4 per cent higher than the same time last year, marking the “first year-over-year increase in active listings since 2019.” Despite this, supply remains a major challenge, with levels continuing to be below what the BCREA says is “typical for a balanced market.”

Meanwhile, though sales were down last month year-over-year, prices remained high provincially.

The average price of a home was up almost 10 per cent in May 2022 compared to 2021, at $1 million. Last year, the average MLS® residential price in B.C. was $915,392.

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• Cooling-off period recommended to address B.C.’s hot real estate market

Rising interest rates and soaring inflation have hit many homeowners hard in recent months, with those who bought during the pandemic especially worried about the squeeze on household budgets.

The annualized inflation rate hit 6.8 per cent in April — a record 30-year high. Meanwhile, house prices nationally were up 24 per cent in April compared with a year earlier, and up 53 per cent relative to April 2020.

The Bank of Canada has recently raised its overnight interest rate to 1.5 per cent, after it held at 0.25 per cent for the vast majority of the last few years.