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Rising rates put B.C. housing ‘on a path to normalizing’ as prices and sales slide in April

By Kemal Pasha

The average price of a residential home slid nearly 3% to $1.065 million last month

A condo building is seen under construction surrounded by houses as condo towers are seen in the distance in Vancouver, B.C., on Friday March 30, 2018. The local real estate board says the benchmark price of a detached home in Metro Vancouver fell nearly 10 per cent year over year as more sellers listed properties but house hunters continued to take their time. THE CANADIAN PRESS/Darryl Dyck
A condo building is seen under construction surrounded by houses as condo towers are seen in the distance in Vancouver, B.C., on Friday March 30, 2018. The local real estate board says the benchmark price of a detached home in Metro Vancouver fell nearly 10 per cent year over year as more sellers listed properties but house hunters continued to take their time. THE CANADIAN PRESS/Darryl Dyck Photo by THE CANADIAN PRESS/Darryl Dyck files

Rising interest rates are putting British Columbia’s housing market on ice as prices and sales cooled from their pandemic highs in April.

The average price of a residential home in the province slid nearly three per cent month-over-month to $1.065 million last month, according to data from the British Columbia Real Estate Association. While the prices mark a sequential decline, the association noted that prices are still roughly 13 per cent ahead of last April’s reading of $943,765.

Home sales fell approximately 35 per cent year over year to 8,939 unit sales in April and slid 22 per cent month-over-month. Sales dollar volumes also slumped 26.5 per cent to $9.5 billion since last year.

“Canadian mortgages have sharply increased, surpassing four per cent for the first time in a decade,” said BCREA chief economist Brendon Ogmundson in a release. “With interest rates rising, demand across B.C. is now on a path to normalizing. However, given existing levels of supply, market conditions remain tight.”

Active listings across the province were also about 7.5 per cent lower in the latest reading compared to last year.

B.C. joins other major markets seeing a slowdown in real estate as rising rates reduce demand. Toronto prices slid around three per cent month-over-month to $1.254 million as the exuberance was pulled out of the market, according to data from the Toronto Regional Real Estate Board.

It is a trend that Don Kottick, president and chief executive officer of Sotheby’s International Realty Canada, discussed during a May 5 interview with The Financial Post’s Larysa Harapyn.

“(If) you look at where we have been in the last little while, we’ve had a very frothy market,” Kottick said. “I think the best way to summarize (is) the froth is really coming out of the market. It’s taking a little bit longer to sell the property, the days on market are increasing. But relative to historic trends, it’s just really almost a return to a normalized market.”

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Kemal Pasha