The B.C. Real Estate association recorded a 29-per-cent increase in home sales across the province in August
The provincial average price for homes rose, up 8.6 per cent to $533,400 in August compared with $491,145 in August 2012.
Photograph by: Richard Buchan , THE CANADIAN PRESS
VANCOUVER — After staying out of the housing market for most of last year waiting for home prices to drop, homebuyers appear to be rushing back to lock in low mortgage rates, according to the British Columbia Real Estate Association.
The association recorded a 29-per-cent increase in home sales across the province in August, with 6,863 transactions cleared through the Multiple Listing Service compared with 5,337 in the same month a year ago.
The increase was driven by big gains in Metro Vancouver, where sales were up 53 per cent, and the Fraser Valley, where sales increased by 20 per cent. However, sales were also up 31 per cent on Vancouver Island, 20 per cent in Victoria and 15 per cent in the Okanagan Mainline area, which includes the city of Kelowna.
The provincial average price also rose, up 8.6 per cent to $533,400 in August compared with $491,145 in August 2012.
“Homebuyers were out in force during the summer months,” association chief economist Cameron Muir said in a news release. “Fear of a housing market hard landing has given way to a sense of urgency to lock in mortgages at a low interest rate.”
However, Muir said, the overall trend has seen sales improving since February and while sales are up, they are recovering from what he views as a cyclical low in 2012 and are not booming.
“We’re unlikely to see sales grow with the same kinds of percentage changes we’ve seen over the past few months,” Muir said. “And over the next year or so we’re likely to see some moderate increase in overall sales in line with the overall economy.”
On prices, Muir said after some “oscillations” in Metro Vancouver values, home prices have been increasing close to the rate of inflation.
The major banks recently hiked posted rates for many of their fixed-term mortgages in the range of 20 basis points, or 0.2 of a percentage point. In late August, RBC lifted its five-year rate to 3.89 per cent, while BMO and Scotiabank posted five-year rates of 3.79 per cent and CIBC 3.69 per cent.
In the news release, Muir said the association’s forecast is for that five-year rate to be about a half-a-percentage-point higher a year from now and he expects higher employment levels and better economic growth to offset the impact of higher rates.
Nationally, the Canadian Real Estate Association has reported that August sales were up 11 per cent compared with August 2012, when Ottawa tightened mortgage lending rules.
Sales improved more quickly than expected, the association said Monday, and the results have caused it to raise its forecast for home sales by the end of the year to 449,000, compared with the expectations it set in June for 443,000 sales. CREA reported 454,573 sales in 2012.
With files from The Canadian Press