Signs of real estate recovery shift to the Interior B.C. numbers skewed by Vancouver's higher than normal sales and rapidly rising prices in 2011
The real estate market in Vancouver may be slowing, but there are signs of strength in the Okanagan and in northern B.C., the British Columbia Real Estate Association's latest report shows.
B.C. residential sales fell nine per cent to 38,312 units during the first six months of 2012 and the average price was 8.9 per cent lower at $533,681, com-pared to the same period last year, the report shows.
But those numbers are heavily skewed by the 2011 tally for Vancouver, where the number of sales was higher than nor-mal and prices went up quickly, particularly for single-family-homes in expensive west-side neighbourhoods.
"If you have more homes selling of the most expensive type in the most expensive neighbourhoods, then that aver-age price is going to rise much more than market conditions would suggest," said Cameron Muir, BCREA chief economist.
In June, the average price in Vancouver was down 13.3 per cent from June 2011, and it was down 12 per cent for the province as a whole.
"But you've got to take that number with a grain of salt because of how the distribution of sales was last year," Muir said. "Even though we're seeing average price declines in Vancouver, that doesn't indicate that the price of the typical home is falling.
"In Vancouver the bench-mark price is pretty flat right now and that's a much better indication."
He pointed out that sales numbers are up in the Okanagan and the North, both areas where sales were just moderate up until this year.
"This is a real signal that economic recovery in the province is filtering out to the Interior and we're seeing increased confidence levels and the buying behaviour as a result of that," Muir said.
The downturn is likely to be temporary, Muir said, because mortgage rates are low, employment is showing improvement and population growth is positive in B.C.
Bryan Yu, economist at Central 1 Credit Union, said that although interest rates are low and employment is solid, buyers appear to be holding back.
"What I think is happening is that some of the people who might be thinking of buying may be spooked a bit by the global situation or feeling less confident," Yu said, adding that he expects the new mortgage insurance rules limiting the maximum mortgage amortization to 25 years will have a further dampening effect on the market in Vancouver, particularly for first-time buyers and the condo market.
The Sun reported last week that the number of residential property sales in Metro Vancouver hit a 10-year low in June, prompting the Real Estate Board of Greater Vancouver to declare a buyers' market.
June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484. But the benchmark price - the cost of a typical home - has remained relatively flat in Metro Vancouver year over year, with a 2.6-per-cent increase in the January to June six-month period to $621,000.
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