British Columbia's housing market is showing signs of a significant shift, with declining sales and an increase in available properties pointing towards a buyer's market. Despite a slight month-over-month uptick in sales in August, the overall activity remains subdued, falling below historical averages and pre-pandemic trends. Factors such as economic uncertainty, federal migration caps, and persistent affordability challenges are contributing to this cooling market, impacting home values and buyer sentiment across the province.
August saw a modest 2.4% rise in seasonally adjusted MLS sales across British Columbia, reaching 6,044 units. However, on an unadjusted basis, this figure represents one of the lowest August sales volumes in two decades and is 19% below the 15-year average. While regions like Greater Vancouver, Okanagan, and Chilliwack experienced sales increases, Victoria saw a 4.5% decrease. The underlying trend in the Lower Mainland-Southwest region has been deteriorating, largely due to affordability concerns and economic uncertainty.
The sales-to-new listing ratio stood at 44% in August, a level typically associated with a buyer's market. Provincial new listings saw an increase across most areas, and active listings are now 10% higher than they were a year ago. This growing inventory is putting downward pressure on prices. The average price in B.C. dipped by 0.4% to $955,900, a 1.5% decrease year-over-year, with the most significant declines observed in the Lower Mainland, particularly the Fraser Valley. Benchmark composite prices, a more reliable indicator of market trends, also declined by 0.2% month-over-month and 3.1% year-over-year.
Challenging economic conditions and federal migration caps are expected to sustain the tempered market conditions. The Lower Mainland, in particular, faces an excess of resale inventory and unsold new condominium units. While this situation is improving affordability, potential buyers remain hesitant to enter a declining market. A soft rental market further incentivizes some to delay home purchases. On the inflation front, B.C. consumer prices rose slightly to 1.8% year-over-year in August, with energy prices falling and food price inflation decelerating but remaining elevated.