Canada's Housing Bubble

Jul 22, 2010 Derrick Penner timescolonist.com

B.C. figures down 22.5 per cent while active listings skyrocket

People looking to buy a home in B.C. are finding a buyer's market with rising inventories and declining sales putting home-hunters more in control.

Across B.C. in June, realtors recorded 7,722 sales through the realtor-controlled Multiple Listing Service which was down 22.5 per cent from the same month in 2009, the period when biggest markets were just heating back up.

Active listings in inventory, in the meantime, climbed almost 21 per cent to hit 59,232 units in June, which equalled a 9.3-month supply based on the pace of sales, Cameron Muir, the association's chief economist said.

Muir said the key influences in June were simply an extension of the ones that have dampened demand since they took hold in April: tougher qualifying rules for some mortgages, particularly for first-time buyers and those seeking secondary suites and a shift in long-term mortgage rates.

Plus, Muir added, the hot buying activity at the end of 2009 lured in many buyers who might have waited until now to purchase, which further reduces demand.

The experience, however, differs depending on which region homebuyers are looking in.

Victoria saw the biggest decline in June sales, falling almost 36 per cent from June 2009.

June's sales total of 625 dipped from 695 in May, and was below the 946 sales seen in June 2009, the Victoria Real Estate Board said.

The number of properties for sale has risen to 4,730, up by 25 per cent year-over-year, the board said.

Greater Victoria prices held fairly firm, however.

The average price for a single family house inched up to $649,280 up in June, from $646,483 in May, while the median, or midpoint, price moved down to $560,822.

As is common in the capital region, there were several high-value sales. The board reported 27 sales of more than $1 million, which included two on the Gulf Islands.

The overall average price for condominiums in June was $331,131, up from $324,005 in May. The median price for condominiums in June rose to $295,000.

Elsewhere, Metro Vancouver sales were down almost 30 per cent, and in the region around Kelowna and Vernon sales were down almost 27 per cent.

As for whether B.C.'s markets are simply shifting balance or heading into a deeper correction, Muir believes buying activity is likely to increase again in the fall, but not enough to put any dramatic pressure on prices.

The average B.C. home price, across all home types, hit $499,908 in June, up 8.2 per cent from the same month a year ago, but slightly off the average of $504,281 over the first six months of 2010.

Muir said home inventory levels sit at about 9.3 months of supply based on the current pace of sales, which is the highest they've been since March 2009, but he added that he believes they are "at or near the peak as to where they're going to go."