Average home prices in Metro Vancouver will grow by under 1% in 2023

The Woodward's Building in downtown Vancouver in the foreground; the ever expanding Metrotown skyline in Burnaby in the background; Mount Baker (Washington State) in the distance. (globetrekimages/Flickr)

Residents in central, urban areas flocked to the suburbs during the height of the pandemic, prompting suburban areas to see the highest housing demand over the last two years.

But that trend is now receding, with British Columbia Real Estate Association’s (BCREA) new forecast suggesting home sales in the Fraser Valley Real Estate Board’s (FVREB) jurisdiction will fall by 30% to 18,500 units sold in 2022 and by a further 8% to 17,000 units in 2023 — down from 26,500 units sold in 2021.

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The Lower Mainland’s suburban trend

FVREB’s jurisdiction includes much of Metro Vancouver, including Surrey, Delta, North Delta, White Rock, and Langley, as well as Abbotsford and Mission in the Fraser Valley.

The year-over-year drop in home sales within FVREB will be the greatest among 12 real estate boards across the province.

The neighbouring Chilliwack and District Real Estate Board (CDREB) will see a similar suburban pattern drop, falling by 27% to 3,500 units in 2022 and a further drop of 17% to 2,900 units in 2023 — down from 4,800 units in 2021.

Both FVREB and CDREB saw year-over-year sales volume spikes of 41% and 37%, respectively, in 2021.

After seeing year-over-year average price hikes of about 25% in 2021, both FVREB and CDREB will see their price growth moderate and stabilize over the next two years. FVREB’s growth rate will comparatively slow to 12.8%, reaching $1.28 million, while CDREB’s growth rate will slow to 16.4%, reaching $848,000.

And in 2023, home prices will stabilize with a growth of only 0.5% to $1.163 million in FVREB and a growth of 0.8% to $855,000 in CDREB.

The rest of Metro Vancouver, including Vancouver

This general downward trend in home sales volumes and average price increases will be seen across the province, including the rest of Metro Vancouver within the Real Estate Board of Greater Vancouver’s (REBGV) jurisdiction.

REBGV, which covers the rest of Metro Vancouver, including the city of Vancouver, is forecast to see its home sale volumes fall by 22% to 35,000 units in 2022 and a further 14% to 30,000 units in 2023 — down from 44,900 units in 2021, which represented a single-year increase of 42%.

Average home price growth in REBGV will also moderate to an increase of 7.7% to $1.28 million in 2022 before stabilizing to an increase of just 0.4% to $1.285 million in 2023. This follows the increase of 11.5% to $1.189 million in 2021.

Across the province, the total number of home sales is expected to fall by 22% to 97,200 units in 2022 and a further 12.4% to 85,200 units in 2023. This follows the increase of 36% to 124,900 units in 2021.

The average home price in BC will hover at $1.034 million in 2022 after experiencing an 11.5% year-over-year increase, before almost flatlining with a 0.8% growth to $1.043 million in 2023. In 2021, average home prices in the province went up by 18.7% to $928,000.

BCREA chief economist Brendon Ogmundson puts this slowdown trend squarely on the expectation that mortgage rates will grow to over 4% for the first time in over a decade.

“The housing market over the next two years may have very little resemblance to the housing market of the past year,” said Ogmundson.

However, he notes that because inventories reached such low levels over the past year, it may take up to a year or more in some areas to return to normal inventory volumes.

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