REAL ESTATE – The number of homes sold through the MLS System of the BC Northern Real Estate Board totaled 392 units in April 2018. This was an increase of 12.6 per cent from April 2017.
On a year-to-date basis, home sales totalled 1,156 units over the first four months of the year. This stood 1.1 per cent (13 sales) above the same period in 2017.
“Home sales perked up a bit in April, coming in well above last April and noticeably above the 10-year April average as well,” said Court Smith, President of the BC Northern Real Estate Board. “At the same time, the shortage of new supply this year has seen the overall number of listings on the market start to fall fairly sharply, resulting in some of the tightest demand supply conditions the market has seen in more than a decade.”
The average price of homes sold in April 2018 was $291,106, edging up 2.4 per cent from April 2017.
The more comprehensive year-to-date average price was $282,717, up 3.5 per cent from the first four months of 2017.
The Board cautions that the average residential price is a useful figure only for establishing trends and comparisons over a period of time. It does not indicate an actual price for a home due to the wide selection of housing available over a vast geographic area (the Board serves an area covering over 600,000 square kilometers or 72 per cent of the province).
The dollar value of all home sales in April 2018 was $114.1 million, rising 15.4 per cent from the same month in 2017. This was a new record for the month.
There were 613 new residential listings in April 2018. This was a decrease of 15.1 per cent on a year-over-year basis. This was the lowest number of new listings in the month of April since 2002.
Active residential listings numbered 1,906 units at the end of April. This was a decrease of 18.8 per cent from the end of April 2017 and was the lowest level for the month since 2007.
Months of inventory numbered 4.9 at the end of April 2018, down from the 6.7 months recorded at the end of April 2017 and below the long-run average of 7.2 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
Sales of all property types numbered 463 units in April 2018. This was up 4.3 per cent from April 2017. The total value of all properties sold was $124.2 million, up 4.9 per cent from April 2017.
The British Columbia Real Estate Association (BCREA) stats released for the 2018 Second Quarter Housing Forecast show sales are forecasted to decline 9 per cent to 94,000 units this year, after posting 103,700 unit sales in 2017. BC MLS residential sales are forecast to remain relatively unchanged in 2019, albeit down 0.2 per cent to 94,000 units. Housing demand is expected to remain above the 10-year average of 84,800 units into 2020.
“The housing market continues to be supported by a strong economy,” said Cameron Muir, BCREA Chief Economist. “However, slower economic growth is expected over the next two years as the economy is nearing full employment and consumers have stepped back from their 2017 spending spree.”
“Demographics will play a key role in the housing market over the next few years,” added Muir, “as growth in the adult-aged population is bolstered by immigration and the massive millennial generation enters its household forming years.”
Muir notes there are, however, significant headwinds in the housing market. “Rising mortgage interest rates will further erode affordability and purchasing power, with the effect being exacerbated by an already high price level. The legacy of tougher mortgage qualifications for conventional mortgagors will be a reduction of their purchasing power by up to 20 per cent, and the provincial government’s expansion of the foreign buyer tax and several other policies aimed at taxing wealth is sending a negative signal to the market and likely diverting investment elsewhere.”
The combination of slowing housing demand and rising new home completions is expected to trend most BC markets toward balanced conditions this year, and lead to less upward pressure on home prices.
