B.C. real estate market in 2023 saw falling prices and lower volumes as interest rates rose – Vancouver Sun

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The B.C. Real Estate Association has released its 2023 year in review — and it’s not a rosy picture.

There were 73,109 home sales last year, a drop of 9.2 per cent over 2022. The average home price was $971,144, a drop of 2.6 per cent, and total sales volume fell by 11.5 per cent to $71 billion.

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BCREA chief economist Brendon Ogmundson said the slow sales and price drops were due to the highest mortgage rates in Canada in 15 years.

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The Bank of Canada began raising interest rates in March 2022 as a way to cool inflation brought on by COVID-19, but has kept the overnight rate at five per cent since last July.

Ogmundson said that because the BoC has not raised rates in the past several months, mortgage rates have fallen slightly.

“With mortgage rates falling to start the year and the potential for Bank of Canada rate cuts on the horizon, the outlook for 2024 appears much brighter,” he said, noting that sales and average prices for the month of December 2023 had both increased compared to December 2022.

The BoC will make its next announcement on interest rates on Jan. 24 and then on March 6.

Canada’s inflation rate has responded to the BoC interest rate hikes and has fallen from a peak of eight per cent in the last part of 2022 to 3.1 per cent in November 2023. The BoC wants inflation to be around two per cent.

The B.C. Assessment Authority released its July 1, 2023 valuations on Jan. 1, 2024, which showed, on average, no increase in values of residential properties in B.C. over the previous year.

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