VANCOUVER — The Globe and Mail
PublishedMonday, Feb. 18 2013, 3:22 PM EST
Last updatedMonday, Feb. 18 2013, 5:07 PM EST
A reduction in fresh listings should set the stage for a gradual recovery in Greater Vancouver’s housing market, says the chief economist at the British Columbia Real Estate Association.
In January, the number of new residential listings in Greater Vancouver fell 10.9 per cent from the same month in 2012, marking the eighth consecutive month of year-over-year declines. But there remains a backlog of active listings that will take some time to clear before the region’s real estate market regains its balance, Cameron Muir said in an interview Monday.
“Sales levels in 2012 were quite low from a historical perspective,” Mr. Muir said, noting that the number of homes changing hands in Greater Vancouver began tailing off in early 2012 and slumped further in August, after Ottawa tightened mortgage borrowing rules in July.
“The evidence that we see is that Greater Vancouver home prices have edged down 2 to 3 per cent over the past year. Some potential buyers are taking a wait-and-see approach in anticipation of a deflationary spiral, but I don’t believe that a substantial price correction is going to happen,” he said.
The Real Estate Board of Greater Vancouver’s January home index price, which strips out the most expensive properties, was $588,100 for single-detached homes, condos and townhouses – a decrease of 2.8 per cent from the same month in 2012. Average January prices slipped 0.5 per cent.
Real estate prices in Greater Vancouver and the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey, have fallen by only a relatively small amount, considering the sharp drop in sales, Mr. Muir said. In January on the multiple listing service, sales decreased 14.3 per cent to 1,351 in Greater Vancouver, while sales declined 23 per cent to 617 in the Fraser Valley.
“Once consumers in this spring’s market realize that prices have not dropped substantially, they will likely get into the market and get on with their lives. Buying a principal residence is just as much a lifestyle decision as it is a financial decision,” he said.