The housing correction has begun.
Home sales in the province were down in May.
The photo was taken by Postmedia.
British Columbia's housing market continued to be weighed down by higher borrowing costs as sales and home values fell in May.
According to data from the British Columbia Real Estate Association, the average home price in the province was just over $1 million, down six percent from the previous month.
The association noted that the number of residential homes sold last month was down 35 per cent from last May and 8 per cent from April.
The BCREA chief economist said that Canadian mortgage rates continue to climb. In June, the average five-year fixed mortgage rate was over 4%. The highest mortgage rates have been in the last few years.
B.C. is not the only place that sees a slowing housing market. Major cities such as Toronto and Montreal have seen home prices fall for the third month in a row.
Data from the Real Estate Board of Greater Vancouver shows that the number of homes sold in the city fell from April to May by 10 per cent. The price of a home in B.C.'s most populous city was roughly the same in May as it was in April.
Mortgage rates could go up as a result of the Bank of Canada raising the overnight rate to 1.5 per cent and signalling that it may have to get even tougher on inflation. People are not buying because of higher rates.
In a May 24 interview with Larysa Harapyn, Steve Saretsky said that the housing correction has begun.
"I don't think it's as pronounced as what I'm hearing from Ontario, but I definitely think we're going through the start of a housing correction here" The markets that went through the most froth were the ones in the suburbs that were driven by people moving to the area. Sales are slowing down in those markets. We are seeing a decline in home prices there as the inventory builds.
The correction of the housing bull market and higher mortgage rates are some of the factors behind the decline.
The email address is shughes@postmedia.
The Financial Post is part of Postmedia Network Inc. There was an issue with signing you up. Try again.
All Rights Reserved © 2024
