‘B.C. home sales will fall 20 per cent in 2022’
May 17, 2021
British Columbia housing sales will see another “record-smashing” performance this year before sales plunge more than 20 per cent in 2022 as price increases fall to single-digit levels, according to the B.C. Real Estate Association (BCREA).
The forecast envisions a roller-coaster ride over the next 18 months.
This year, provincewide sales will soar 33.6 per cent from 2020 to an all-time high of 125,600 units and prices will jump 13.1 per cent to an average of $893,600, the forecast states.
But the ride will change in 2022.
BCREA chief economist Brendan Ogmundson said “we are coming off a record-smashing pace” where sales could reach 130,000 units or more in 2021 following 94,013 sales in 2020—compared to a traditional level of about 80,000 transactions annually.
The B.C. housing market will remain strong in 2022, Ogmundson said, but it will see a sharp decline when compared to this year.
“In 2022, MLS residential sales are forecast to pull back 20.3 per cent to 100,150 units,” Ogmundson stated in BCREA’s forecast, released May 5.
This would equal the sales level of 2016—the former high-water mark for provincial housing sales.
”There are early signs that markets are calming from the frenetic pace of recent months and could balance out over the second half of this year,” he added.
According to BCREA, Greater Vancouver housing sales, which surged 342 per cent in April 2021 compared to the same month a year earlier, will rise 40.8 per cent in 2021 compared to 2020. This increase translates to 44,000 sales. The average composite home price is forecast increase 10.1 per cent to $1.17 million.
In 2022, however, Greater Vancouver sales will drop 19.1 per cent to 36,000 transactions and prices will increase just 2.1 per cent, compared to this year.
Ogmundson said 2022 sales will be cooled by interest rates and a tougher mortgage stress test, but the real change will come from buyer fatigue.
“No one would be forecasting that we would go from beating former sales records by tens of thousands of sales to even higher sales,” he said. “There is a natural governor on the pace of housing sales.”
BCREA’s outlook expects an average provincewide home price of $921,800 in 2022, compared to $893,000 this year and $781,765 in 2020.