What's in store for the BC housing market this year?

BCREA lays out possibilities and challenges for the market in 2024

What's in store for the BC housing market this year?

The British Columbia housing market is poised for a 2024 rebound amid an expected shift in the interest rate environment, according to the province’s foremost housing industry group.

In its latest housing forecast update covering the first quarter of 2024, the British Columbia Real Estate Association (BCREA) said that it is anticipating the province’s residential sales to spike by 7.8% for a total of 78,775 units this year.

“In 2023, the housing market faced headwinds due to elevated mortgage rates, but the recent decline in fixed mortgage rates and potential Bank of Canada rate cuts present an optimistic outlook for 2024,” said Brendon Ogmundson, chief economist at BCREA.

“As we navigate through 2024, we expect a delicate balance between rising sales and normalizing inventories, which should lead to a relatively quiet year for prices.”

Activity is expected to surge further in 2025, with projected full-year residential sales of 86,475 units.

BCREA said that with inflation veering closer to the central bank’s 2% target and with economic growth softening, there is less need for a stringent monetary policy.

“We anticipate the Bank of Canada will begin to lower its policy rate this year, leading to higher provincial home sales,” BCREA said.

“The ultimate impact on prices hinges entirely on how inventory evolves this year. While risks to the economy remain, our view is that new listings normalize following a lull in activity last year. That normalization of new listing activity should result in a more balanced market this year with relatively stable pricing.”