British Columbians are waiting on lower interest rates before jumping into the housing market.
That’s the assessment of Brendon Ogmundson, chief economist with the British Columbia Real Estate Association, after his organization released new figures that show real estate sales in B.C. dropped by 9.5 per cent in March, 2024 compared to March, 2023.
“March capped off a slow start to the first quarter of 2024,” Ogmundson said in a statement. “Despite a steep decline in fixed mortgage rates, buyers appear to be waiting on the Bank of Canada to lower its policy rate before jumping back into the market.”
On April 10, the Bank of Canada held its overnight lending rate at five per cent, where it has remained since July 2023.
Bank of Canada Governor Tiff Macklem said at the time that the bank continues to look for evidence that the trend of declining inflation continues. While it has dropped in some areas, he specifically singled out housing as an area where it has remained high.
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“We don’t want to leave monetary policy this restrictive longer than we need to,” Macklem said. “But if we lower our policy interest rate too early or cut too fast, we could jeopardize the progress we’ve made bringing inflation down.”
The Bank of Canada is next scheduled to announce its new overnight lending rate on June 5.
Looking at specific regions, March sales dropped the most in the Okanagan. They were down 34.1 per cent in March 2024, compared to March 2023, followed by the South Peace (down almost 26 per cent) and Powell River (down more than 15 per cent). Elsewhere in the province, sales in March 2024 dropped by almost 11 per cent in the Fraser Valley and almost five per cent in Greater Vancouver compared to March 2023.
Sales on Vancouver Island (minus Greater Victoria) dropped by 9.3 per cent, while sales in Greater Victoria dropped by 1.1 per cent in March 2024 compared to March 2023.
B.C.’s Kootenay region was the only region with an uptick in sales with 8.3 per cent.
The average residential price in March 2024 was $1.01 million, up some 6.5 per cent in March 2023, when it was $958,051.
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