"Strong recovery" expected for BC housing market in 2024
Based on current trajectories and trends, the housing market in British Columbia is expected to see a “strong rebound” in 2024, according to the BC Real Estate Association’s (BCREA) forecast update released today.
But before that rebound happens, the pronounced lull that began in 2022 will continue well into 2023, with the total number of home sales across the province expected to fall by 7.1% to 75,150 units this year. Such home sale volume levels would be higher than what was experienced in 2018 and 2019.
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The average home price will also fall by 7% to $925,500 in 2023 compared to 2022.
In 2022, the number of home sales reached 80,898 units and the average home price hovered at $996,694.
For 2024, BCREA currently expects the total number of home sales will reach 93,025 units, representing a 23.8% year-over-year increase. Average home prices will also see a relatively modest gain of 3.1%.
“We anticipate that home sales will remain slow in 2023 as the market continues to be constrained by high mortgage rates and absorbs the impact of a slowing economy,” reads the forecast.
“However, the housing market historically tends to lead the business cycle and the onset of recession generally coincides with the beginning of a recovery in the housing market and a substantial rise in activity the following year as the economy heals and the impact of falling mortgage rates unlocks demand.”
Within the Real Estate Board of Greater Vancouver’s jurisdiction, which includes the City of Vancouver, the total number of home sales will reach 28,000 units in 2023 and 35,000 units in 2024 — contrasted with 29,261 units in 2022. Average home prices will reach $1.22 million in 2024, which is higher than $1.18 million in 2023, but lower than $1.272 million in 2022.
The jurisdiction of the Fraser Valley Real Estate Board, including Surrey, will see more comparatively modest home price gains next year, following its skyrocketing ascent earlier in the pandemic. In 2024, average home prices are expected to go up by just 1% to $965,000, following a decline of 13% to $955,000 in 2023 and an increase of 8.4% to $1.1 million in 2022.
But the volume of home sales in the Fraser Valley will be particularly strong in 2024, with the forecast projecting 17,000 units — up from 13,000 in 2023, and 14,599 in 2022.
“A slowing economy and still elevated mortgage rates are expected to keep housing activity lower than normal through much of 2023,” said BCREA Chief Economist Brendon Ogmundson in a statement.
“However, we expect a strong recovery, boosted by an expected decline in mortgage rates and record high immigration that will carry significant momentum into 2024.”
The federal government’s heightened immigration targets through 2025 will provide a further boost to the housing market’s recovery.