BC Housing And The Expected Market Change In 2023
According to the most recent data from the BCREA (British Columbia Real Estate Association), MLS residential sales in BC are forecast to decline 34.4 percent from a record high in 2021 to 82,345 units this year. In 2023, they are forecast to fall an additional 11.4 percent to 72,960. With sky high interest rates, the highest we’ve seen since 2007, we can expect market activity to fall down to a low level. We can also expect levels to be down 5 percent in our pricey province, compared to our peak earlier this year.
Will There Be Specific Areas To Decline More Than Others?
Let’s take a look at some of the areas around British Columbia that we could see take the biggest declines in residential property:
- Fraser Valley with an expected 7.8% decline
- Chilliwack is expected to decline by 6.2%
- Greater Vancouver is expecting a decline of around 5.2%
- Okanagan expected to decline by 4.9%
- Victoria could see prices decline by 4.3%
- Kootenay could also see prices decline by 4.3%
What Were The Factors Influencing The Housing Market Over The Past Two Years?
According to Chief Economist Brendon Ogmundson, major factors that helped the housing market activity over the past two years were greatly influenced by COVID-19. We had seen insanely low mortgage rates, giving many of us an opportunity to invest in the residential housing market. We also had the opportunity to work from home, therefore many individuals were looking for places with more space and functionality which was not the usual situation prior to the pandemic. With many factors that influenced those initial wants and needs coming to an end we are expecting a significant change in the housing market – which we may see continue through 2023. The ability and desire to work remotely is not desirable as many individuals are wanting to get back into the workplace to socialize, especially when employers are expecting in-office attendance multiple times per week again. The mentioned previous desire for space and functionality to live at home which made an increase in smaller markets outside of Vancouver are now seeing a major pull-back this year with things returning to normal. Higher mortgage rates have gotten rid of the pandemic driven shift in buyer preferences toward larger and more expensive housing that were much more in demand during the pandemic.
How Could This Possibly Benefit Us?
When the housing price incline is over, we will enter a housing recovery cycle. This will lead us to the best time to buy below-market value properties. For now, invest where suitable. At the end of the day – there is no better time to invest in the housing market than now, because increasing value in the market is the same as spending time in the market.