Interest rate hikes starting to slow housing market
Prices kept climbing, but home sales were down by about one-third across the Okanagan in April as the impacts of rising interest rates began to take hold.
Data released this week by the Association of Interior Realtors showed there were 577 units sold last month in the Central Okanagan, down 34% on a year-over-year basis.
In the South Okanagan, 201 sales marked a 33% drop, while 220 deals in the North Okanagan represented a 32% decline.
“It is important to remember that this is not the same market we had a year ago. For almost the entire year in 2021 we had record highs each month, so to say sales are down does not mean they are low — they are just lower in comparison to a time of unusual real estate market activity,” said association president Lyndi Cruickshank in a press release.
“The current rising interest rate environment will naturally slow things down, bringing real estate activity back to a healthier market — the transition of which we are starting to see reflected in the number of sales and in the way real estate transactions are transpiring.”
The market saw a benchmark singlefamily home in the Central Okanagan trade for $1.1 million in April, about the same as in March.
The same home in the South Okanagan moved for $771,000, up from $731,000 in March, and the same home in the North Okanagan changed hands for $789,000, up from $780,000.
Meanwhile, the number of active listings rose by 12% on a year-over-year basis in the Central Okanagan, but dropped 11% in the South Okanagan and 7% in the North Okanagan.
“The lack of inventory is still putting upward pressure on prices. Despite an increase in new listings, housing supply remains light, which points to a problem we’ve been stressing for a while: a generalized lack of housing supply,” said Cruickshank.
“What we need is more homes getting on to market to meet demand and that is the real challenge.”