B.C. housing prices still under pressure to fall, Scotia Economics says

May 7, 2009

 Below is an article by Derrick Penner, Vancouver Sun published May 6, 2009:

While British Columbia real estate sales have lifted from last fall’s dismal lows, market oversupply and deteriorating economic conditions will still pressure prices downwards, according to Scotia Economics.

March and April saw “pretty strong sales volumes” across the country, said Adrienne Warren, a senior economist with Scotia Economics, the Bank of Nova Scotia’s economic-research division.

However, “prices are not really firming up [in B.C.] as we’ve seen in some other parts of the country,” she said Tuesday.

Read the full article here.

Supply and demand for housing

So far, new listings have not spiked up over the past 3 months. The fairly active spring sales to-date helped to ease selling pressure, and home prices appeared to have stabilized. Current mortgage interest rates at around 4% are attracting more buyers into the market. The announcement by the Bank of Canada earlier in the week to keep the current low interest rate until June, 201o was deemed necessary to cushion the faltering Canadian economy.

Downward pricing pressure has ease considerably as increased sales of homes helped to reduce the inventory of homes. The drop in home prices may be just taking a pause, price decline may continue if the sales pace is not kept up at the sales level for April.

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