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B.C. Economic Briefing

For Central 1

Housing demand continues to wilt in March

Poor housing market conditions in B.C. extended through to the end of the fi rst quarter as home sales declined for a fi fth straight month in March. MLS® residential sales fell 0.6 per cent from February to a seasonally-adjusted 5,266 units and the lowest level since February 2013. Year-over-year, sales declined nearly 23 per cent in March. B.C. and the Lower Main-land specifi cally has been ground zero for Canada’s housing slump since early 2018, with provincial sales down 27 per cent during the fi rst quarter. Excluding B.C., national sales rose 1.1 per cent.

Regionally, sales were mixed in March. Lower Main-land home sales continued to erode with seasonally-adjusted sales down 2.7 per cent from February
and a sixth straight monthly decline. Levels are the lowest since 2008/09. Other markets contributing to the monthly decline included the Kelowna-anchored Okanagan Mainline Real Estate Board area (down 1.5 per cent) and the Kootenay (down 5.2 per cent). Sales improvements were seen on Vancouver Island and northern B.C. However, steep year-over-year declines have been concentrated in the south coast markets and parts of the southern interior.

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Weak sales have contributed to rising inventories, with active listings up about 50 per cent year-over-year in the Lower Mainland and 30 per cent in the Okanagan. Sales-to-active listings ratios in these areas point to a buyers’ market. While sales are down on Vancouver Island, inventory remains in relative short supply. The average price of homes sold in B.C. improved slightly by 2.6 per cent to $668,922, marking the

fi rst gain since November 2018. That said, average values are impacted by sales composition, particularly given deeper sales declines in higher priced markets. The average price remains fi ve to seven per cent off the level observed during the summer months of 2018. MLS® Housing Price Indices (HPI), which are available only for select markets, were steady. Lower Mainland HPI levels were fl at from February albeit lifted by Fraser Valley strength, while Island prices edged up. However, adjustment for normal seasonal strength suggests erosion in all markets. The Lower Mainland HPI is down seven per cent from peak, with a mild decline to fl at conditions on the Island.

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