Demand remains strong at a provincial level with BC home sales continuing to trend above the 10-year average in June.
But robust demand has been met with limited supply, causing the province’s average home price to rise 4.4 per cent year-over-year last month to $725,778, according to the British Columbia Real Estate Association’s June 2017 data release published on Thursday.
“The one real challenge, really all around the province is supply, where listings just aren’t keeping up with sales so that means pretty tight market conditions and upward pressure on prices,” BCREA Economist Brendon Ogmundson tells BuzzBuzzNews.
Last month, total active listings totaled 29,651, down 6.2 per cent from June 2016. Sales-to-active listings also dropped in June to 39.4 per cent, compared to 40.8 per cent in June 2016.
After experiencing record home sales in early 2016, activity in Greater Vancouver cooled after the provincial government implemented a 15 per cent foreign-buyer tax for the region.
However, the effects of the tax were short-lived as this year the market showed signs of rebounding.
In June, sales in Greater Vancouver dropped 12.2 per cent year-over-year to 3,953, but Ogmundson says the region’s transactions are still above average levels.
Last month, areas in Northern BC and the Kootenays saw a noticeable gain in year-over-year sales at a 10.5 and 28.5 per cent increase, respectively.
But with limited supply these areas are struggling to keep up with the demand.
“When you get a chip in demand like that, like a real jump up in demand fairly suddenly, it’s very difficult for supply to keep up. So demand and supply can be really out of whack in the short term because it takes a long time obviously to build up the housing stock and meet that demand,” says Ogmundson.
Even though BC’s total property sales are trending above the long-run average, fewer transactions occurred in June compared to a year ago. A total of 11,671 homes sold across the province last month, a 9.6 per cent drop from June 2016.
Meantime, total sales dollar volume decreased 5.6 per cent to $8.47 billion compared to a year ago.
Year-to-date, a total of 54,830 homes sold across the province in BC, down 18.6 per cent from a year ago. The average year-to-date price of a home was $712,993, a 3.8 per cent drop compared to the same time last year.