The Bank of Canada’s campaign to quell inflation appears to have put the squeeze on Prince George’s real estate market.
Single-family homes in the city sold for $521,904 on average during the third quarter of this year, a quarter-over-quarter drop of $14,569, according to an analysis of numbers from the B.C. Northern Real Estate Board.
The number of transactions also tumbled, falling by 88 to 203.
As a consequence, market activity, as measured by average price multiplied by sales, stood at $105.9 million, down $50.2 million from the second quarter when activity hit a peak of 291 sales with an average price of $536,473, in turn a jump of 102 sales and $16,494 from the first quarter.
The declines coincide with a significant jump in interest rates.
Roughly two weeks into most-recent quarter, the Bank of Canada increased its benchmark “overnight” interest rate by a full percentage point, to 2.5 per cent, prompting banks to raise prime rates on mortgages. RBC, for example, raised its rate by a percentage point to 4.7 per cent.
At the time, RBC’s assistant chief economist, Robert Hogue said he expects the Bank of Canada to hike its rate another 75 basis points, to 3.25 per cent by October.
Year-to-date figures released Thursday by the BCNREB also reflect the decline.
As of the end of September, the average price stood at $527,579, up from $456,173 by the same point last year. However, sales stood at 683, compared to 861 at the end of September 2021 translating into a $32.4-million decrease in market activity.
As well, the most-recent year-to-date average sales price is down $2,150 from the figure reached by the end of the second quarter.
In a statement accompanying the figures, BCNREB says sales in northern B.C. fell to below pre-pandemic levels for the first time since the onset of the crisis and within the third quarter, were at their lowest since 2010 on a seasonally-adjusted basis.
Conversely, active listings jumped 16 per cent quarter-over-quarter and are currently at their highest level since July 2020.
“Despite this increase in listings, active listings remain well below balanced market levels due to the long running decline in listings since 2010,” BCNREB says.
“Average days on market remain near record lows, despite increasing 10 per cent from last quarter (the all-time low). Average sale price remains high, down just four per cent from last quarter.
“Given that sales have fallen sharply in the North, and active listings are edging up more gradually, the combined result of these trends has been to move the sales-to-active-listings ratio back towards historical norms and just shy of balanced market territory for the region.
“Other indicators like average price and days on market are trending towards a softer market, but still gradually.
“As the Bank of Canada continues tightening, albeit at a slower pace going forward, we anticipate that mortgage rates will continue to drag on prices and sales.”
Looking at properties of all types, 1,110 worth $507.2 million changed hands as of the end of September, compared with 1305 properties worth $534 million by the same point last year.
In the western part of the city the median price of the 196 homes sold this year was $462,500.
East of the by-pass, 151 single-family homes sold had a median price of $410,000.
North of the Nechako, the 148 single-family homes sold had a median price of $546,000.
In the southwest, the median price of the 188 single-family homes sold was $612,250.
At the end of September, there were 644 properties of all types available for purchase through the Multiple Listing Service.
– with files from Glen Korstrom, Glacier Media