As we approach the end of 2024, British Columbia's real estate market continues to show promising signs of recovery. After a prolonged slump, we're seeing renewed optimism and increased activity that signals a potential turnaround in the market.
Provincial home sales are up 25.7% compared to the same time last year. While still about 12% below the 10-year average for November, this represents a substantial improvement from the subdued activity throughout most of 2024. The surge in sales this fall is setting the stage for a much stronger start to 2025.
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Active listings were up slightly, but with the increase in recent sales and the seasonal reduction in new listings, inventory accumulation has slowed. The total inventory now sits close to the level considered necessary for long-term market balance.
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Over the past two months, the market has settled back into balanced territory. This balance is creating a more equitable environment for both buyers and sellers and helping to keep price growth contained.
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Average home prices have remained remarkably stable and are sitting just 1% higher than the same time last year. However, an increase in sales with a more active market could potentially lead to price growth in the coming months.
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The Bank of Canada continues to take decisive action to stimulate the economy. In its December 11th announcement, the Bank lowered its overnight policy rate by 50 basis points to 3.25%, marking the second consecutive “jumbo” rate reduction. This move aims to support economic recovery and manage inflation. The overnight rate is now sitting at the high end of what the bank considers neutral for the economy and the bank states that moving forward, they will consider additional rate cuts one decision at a time. Given the trajectory of the economy and uncertainty about punitive tariffs, many experts predict there will be further cuts to come.
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New federal mortgage rules are now in place that increase the maximum home price eligible for an insured mortgage from $1 Million to $1.5 Million. This means buyers can now put as little as 5% down on properties up to $1.5 million, significantly expanding home ownership opportunities.
The combination of lower interest rates, balanced market conditions, and more accessible mortgage rules creates a promising outlook for our real estate market. Early indicators suggest increasing buyer confidence and potential for more dynamic market activity in 2025
To gain a more comprehensive understanding of how the current market dynamics may impact your particular real estate goals, don't hesitate to reach out to me.
Gina Jacobsen, PhD
REALTOR®
(250)539-0828
gina@ginajacobsen.com
Sources:
British Columbia Real Estate Association Economics
Victoria Real Estate Board MLS® STATISTICS
Canadian Real Estate Association
Bank of Canada
Bloomberg
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