Month over month, activity dipped slightly from May, which saw 630 sales. In the upper range of the market, I am seeing a much higher supply of inventory as many home sellers take advantage of the first increase in prices over the past years, which is something I am watching closely. With inventory increasing, any given months supply can dramatically change strategy. Closely consulting with my clients, I can give a much more accurate picture for where the market is heading.
Inventory of single-family homes declined by 20 per cent from June 2016, with 1,297 active listings available last month compared to 1,620 one year ago. Active listings of single-family homes have steadily increased each month since VIREB hit its historic low of 859 in December 2016, but demand continues to exceed supply, with well-priced properties quickly selling once they hit the market.
“Real estate is cyclical, and consumers need to take advantage of these market conditions because they won’t last forever,” says Stromar.
Economist Brendon Ogmundson of the British Columbia Real Estate Association affirms that strong economic fundamentals continue to fuel housing demand in the province. “A healthy provincial job market, low interest rates, and consumer confidence are all contributing to robust housing demand throughout most of British Columbia,” says Ogmundson. “BCREA expects the provincial economy to grow by 3.3 per cent this year, which will likely be the highest in Canada.”
A single increase in the overnight rate from 0.5 per cent to 0.75 per cent is not going to radically change household finances. Canadians have become accustomed to cheap money and mortgage rates which have been falling since the 1980’s, but we will see a reversal of that trend going forward.
“We’re clearly at a tipping point, not just in the Canadian economy, but in the global economy, where we need to acknowledge that rates will steadily climb over the next several years,” says Frances Donald, senior economist with Manulife Asset Management.
