Housing sales and prices rebounded from January’s sharp retrenchment in a sign of traction for B.C.’s beleaguered market, but it remains too early to call this a momentum shift given strained affordability, and economic and interest rate uncertainty.
B.C. MLS sales rose 6.9 per cent to 5,067 units in February, reversing January’s decline. Despite the increase, this remained within the weak range observed since November.
Levels were half of last year’s high and 20 per cent below the pre-pandemic trend. Lower prices and easing interest rate expectations may have contributed to the increase, alongside a bounce-back after severe weather patterns in late December.
Sales increased in most real estate board areas. Specifically, the Lower Mainland-Southwest, led by Chilliwack (up 11.5 per cent) and Greater Vancouver (up 15.2 per cent). The latter recorded its highest sales since October. Sales also rose in Victoria (up 16.7 per cent) and Kootenay (up 8.4 per cent). In contrast, sales in northern B.C. fell sharply, which could reflect the impact of announced sawmill closures.
Higher sales were not matched by supply. New listings fell 5.7 per cent after a stronger pickup in January, contributing to fewer month-end active listings. This was driven primarily by the Lower Mainland-Southwest.
Insufficient supply is maintaining balanced conditions in most markets, and sellers’ conditions in Victoria. Average home prices recovered 2.9 per cent to $898,777 – near December’s level, but still 15-per-cent lower than peak. Composition does play a role in monthly fluctuations.
Adjusted for seasonal effects, seasonally adjusted benchmark prices continued to decline in February. On an aggregate B.C. basis, the benchmark price fell 1.1 per cent, marking a twelfth consecutive monthly contraction, although the pace of contraction slowed. This is 12 per cent below peak, but 30 per cent higher than the pre-pandemic levels. Benchmark prices tend to lag turning points in the market and prices are likely stabilizing. That said, affordability remains a severe constraint to buyers, and economic growth is expected to slow.
Manufacturing sales in B.C. were slightly higher in January 2023 when compared to December 2022. On a seasonally adjusted basis, sales rose 1.4 per cent. Most of the sales increase was in the durable goods industries, which saw an increase in sales of 2.3 per cent. Non-durable goods industry sales were essentially flat, increasing by only 0.4 per cent. Unadjusted January sales rose 1.1 per cent year over year, with non-durable goods up 7.3 per cent and durable goods down 3.6 per cent.
Among durable goods sectors, nine out of the 10 saw an increase in sales. The overall sales increase was relatively spread out across them, with primary metal manufacturing (up 13.3 per cent), fabricated metal products manufacturing (up 7.4 per cent), non-metallic mineral products manufacturing (up 10.9 per cent), computer and electronic products manufacturing (up 14.5 per cent) and furniture and related products manufacturing (up 22.1 per cent) leading the way. The lone durable goods industry experiencing lower dollar volume sales was wood products manufacturing – the largest durable goods industry in B.C. in terms of sales. It saw sales decline 10.8 per cent over the previous month, marking two consecutive months of declines that reflect the broader challenges of lower prices and sawmill closures. In non-durable goods, food manufacturing experienced a 2.7-per-cent decline in sales.
Bryan Yu is chief economist at Central 1.
