The housing market faltered heading into the fall season as the latest round of interest rate hikes and higher fixed rates priced more buyers out of the market, added financial stress to existing homeowners and further curbed sentiment.
This was a steeper decline than the average four-per-cent decline reported between August and September. Year-over-year sales growth narrowed from 25 per cent to 16 per cent, with these gains reflecting the base year impacts of the weakness observed in 2022. Sales remain 20 per cent below the September average recorded between 2010 and 2019 and further weakness is likely ahead.
Still, the average home value remained firm. At $1.2 million, this was 5.5 per cent ahead of a year ago and up 1.3 per cent from August. Seasonally adjusted prices were flat and benchmark home values showed a mild decline of 0.6 per cent. Home values follow market conditions and steady average prices could reflect entry-level buyers being crowded out by high rates. Benchmark price declines from August were driven by apartment prices as houses and townhomes held up better.
B.C.’s labour market recorded another solid gain in September, adding to August’s increase. Employment rose 0.9 per cent or by 25,700 people in September, pushing year-over-year growth to 1.7 per cent. Relative to pre-pandemic, February 2020 levels, B.C. employment was still up by 5.5 per cent. A slight increase in the provincial unemployment rate to 5.4 per cent does suggest a slight softening of conditions as the labour market is not fully absorbing the surge in immigration.