Despite falling real estate prices in February, B.C. Interior homes holding value
Real estate news these days is all about prices falling dramatically but looking at the longer-term picture, B.C. Interior home prices are up 36.7% from three years ago and 40.9% from five years ago.
This comes despite a 9.5% decline from a year ago. The benchmark price for a typical home in the Interior was $646,600 in February, according to data released today, March 15, by the Canadian Real Estate Association.
Post COVID, a shortage of housing on the market combined with huge demand drove prices up to their highest levels ever, passing $1 million for single-family houses in Kelowna.
The market could not sustain that fevered pace, especially in light of dramatically increasing interest rates but the price of homes has still climbed significantly over the years.
READ MORE: Kelowna wants to create more affordable housing but will wait for more studies
The data is not broken down by areas of the Interior, although the Lower Mainland numbers are divided into four geographic area and Victoria is separate from the rest of Vancouver Island.
The Island, outside of Victoria, saw the greatest price increases in B.C. at 60.2% over the past five years. The Interior had the second-highest rate of growth in the province.
The Bancroft area of Manitoba had the biggest price increases at 120% from five years ago.
No real estate region in Canada saw a price drop over three or five years. The Greater Vancouver area saw the smallest rate of growth at 6.2% from five years ago.
READ MORE: Canadian home sales drop 40 per cent in February compared with year ago
Jill Oudil, chair of the real estate association, said February’s data suggests the potential of a more robust market to come.
"But to repeat the bottom line from last month, we won’t know what the 2023 market has in store until the spring," she said in a statement. “While we’re not seeing it in the sales or listings data just yet, I would expect homeowners are getting properties ready for the market and prospective buyers are getting mortgage pre-approvals."
Shaun Cathcart, the association's senior economist, said similarities between 2023 and 2019 continued to emerge in February, with sales up, the market tightening, and month-over-month price declines getting smaller.
“But the biggest similarity was a sharp drop in seasonally adjusted new listings," he said. "Future sellers, many of whom will also be buyers, are likely biding their time until the optimum time to list and buy something else.
"For most, that’s in the spring," Cathcart said. "Will buyers jump off the fence to snap homes up in 2023 once they finally start to hit the market? They did in 2019."
— With files from The Canadian Press
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