B.C. Saw Slow Sales in 2023, but Metro Vancouver Shows Resiliency

2024 is shaping up to be on a much different trajectory for sales on Canada’s west coast.

By Brett Surbey | 4 minute read

Between high interest rates and slow sales, BC’s housing market closed out the year barely in a balanced market territory.

British Columbia’s housing market was slow and steady, but definitely not winning the sales race, according to a British Columbia Real Estate (BCREA) report published in January. The province’s Multiple Listing Service (MLS) showed a steep drop in residential sales across the province, with 73,109 residential sales recorded last year — a decline of 9.2% compared to 2022’s unit sales of 80,506. 

The total sale dollar volume in 2023 amounted to $71 billion — a decrease of 11.5% from 2022. 

BCREA’s Chief Economist, Brendon Ogmundson, attributes the decrease in sales to high mortgage rates.  “The highest mortgage rates in over 15 years led to the slowest sales in a decade for B.C.” he says in the report.

B.C. real estate boards that reported the biggest drop in sales from year to year included BC Northern (-14.5%), South Peace (-24.5%), Okanagan (-15.8%), Kamloops (-8.2%), Powell River (-20.5%), and Greater Vancouver (-9.90%). Every jurisdiction saw a drop in sales except Chilliwack, which had a very modest 0.9% increase from 2022.

Metro Vancouver Shows Resilience  

Metro Vancouver closed out 2023 in a solid balanced market, but due to a strong hit to its residential sales. The Real Estate Board of Greater Vancouver (REBGV) reported that total residential sales amounted to 26,249 in 2023 — a 10.3% slip from 2022 and a whopping 41.5% drop from 2021. Last year’s sales in total were also 23.4% percent below the 10-year annual sales average of 34, 272.

But amid the declining sales, the area did not see the price declines other forecasters were calling for. Instead, Metro Vancouver saw their MLS Home Price Index composite benchmark price, which looks at a neighbourhood’s home price levels and trends, crawl up 5% from 2022 to $1,165,700.

“You could miss it by just looking at the year-end totals, but 2023 was a strong year for the Metro Vancouver housing market considering that mortgage rates were the highest they’ve been in over a decade,” says Andrew Lis, REBGV’s Director of Economics and Data Analytics, in the report. Lis points to the rise in benchmark prices as an indicator that Metro Van hasn’t lost its appeal to homebuyers — even in a high rate environment. 

“The fact that we ended the year with five-per-cent-plus gains in home prices across all market segments demonstrates that Metro Vancouver remains an attractive and desirable destination, and elevated borrowing costs alone aren’t enough to dissuade buyers determined to get into this market,” he adds.

2024 Off to a Strong Start

Though 2023 ended in a balanced market for B.C., the housing market is peeling out of the gates for 2024 — potentially in favour of buyers. A statistics release from BCREA observed a  29.4% increase in home sales in January 2024 from January 2023. Even more impressive was the total sales dollar volume, up by over 40% compared to last January. 

Ogmundson views this hot start as the proverbial other side of the interest rate environment coin. “A sharp decline in fixed mortgage rates and expectations for future Bank of Canada rate cuts is driving sentiment in the market and bringing pent-up demand off the sidelines,” he states in the release.

Vancouver is seeing the same surge in home sales according to a recent Greater Vancouver Realtors’ report, albeit at an even higher rate. Compared to home sales in January 2023, January 2024 saw a 38.5% jump. Though this number is still 20.2% below the historical average, the REBGV views the trend as a positive sign that change is coming. “It’s hard to believe that January sales figures came in so strong after such a quiet December, which saw many buyers and sellers delaying major decisions,” notes Lis.

The increase in sales is a welcome sign to be sure, but if inventory levels aren’t steady, B.C.’s balanced market could quickly slip into seller’s territory. “If sellers don’t step off the sidelines soon, the competition among buyers could tilt the market back into sellers’ territory, as the available inventory struggles to keep pace with demand,” explains Lis. 

Ogmundson holds the same view for the entire province: “A steady pace of new inventory will be crucial in keeping markets balanced as sales accelerate.”