Skip to content
Join our Newsletter

B.C. real estate sales advance strongly

After staying out of the housing market for most of last year waiting for home prices to drop, homebuyers appear to be rushing back to lock in low mortgage rates, according to the British Columbia Real Estate Association.
djs618115579_high.jpg
The British Columbia Real Estate Association recorded a 29-per-cent increase in home sales across the province in August.

After staying out of the housing market for most of last year waiting for home prices to drop, homebuyers appear to be rushing back to lock in low mortgage rates, according to the British Columbia Real Estate Association.

The association recorded a 29-per-cent increase in home sales across the province in August with 6,863 transactions cleared through the Multiple Listing Service compared with 5,337 in the same month a year ago.

The increase was driven by the big gains in Metro Vancouver, where sales were up 53 per cent and the Fraser Valley, where sales increased by 20 per cent. However, sales were also up 31 per cent on Vancouver Island, 20 per cent in Victoria and 15 per cent in the Okanagan Mainline real estate board, which includes the city of Kelowna.

The provincial average price was also up 8.6 per cent to $533,400 in August compared with $491,145 in August 2012.

“Homebuyers were out in force during the summer months,” association chief economist Cameron Muir said in a news release. “Fear of a housing market hard landing has given way to a sense of urgency to lock in mortgages at low a low interest rate.”

The major banks have recently hiked posted rates for many of their fixed-term mortgages in the range of 20 basis points, or .2 of a percentage point. In late August, RBC lifted its five-year rate to 3.89 per cent, BMO and Scotiabank posted five-year rates of 3.79 per cent and CIBC 3.69 per cent.

Those moves reflect the banks’ higher costs for raising mortgage funds on international bond markets, which put a squeeze on new buyers in the market, but Muir isn’t expecting more dramatic changes over the next year.

In the news release, he said the association’s forecast is for that five-year rate to be about a half-a-percentage-point higher a year from now and expects that higher employment levels and better economic growth to offset the impact of higher rates.

B.C.’s sales numbers are in keeping with the national picture. The Canadian Real Estate Association has reported that August sales were up 11 per cent compared with August 2012 when Ottawa tightened mortgage lending rules.

Sales improved more quickly than expected, the association said Monday, and the results have caused it to raise its forecast for home sales by the end of the year to 449,000 compared with the expectations it set in June for 443,000 sales. CREA reported 454,573 sales in 2012.

The association says this is likely due to the transient influence of buyers with pre-approved financing making purchases before their lower pre-approved rates expire.