Market Update Archives - Page 15 of 43 - Geoff Jarman Real Estate

AUGUST 2023 METRO VANCOUVER HOUSING MARKET HIGHLIGHTS

HOUSING MARKET: Seasonal Slowdown Brings Price Stability to Metro Vancouver

Source: REBGV

As summer winds to a close, higher borrowing costs have begun to permeate the Metro Vancouver1 housing market in predictable ways, with price gains cooling and sales slowing along the typical seasonal pattern.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales2 in the region totalled 2,296 in August 2023, a 21.4 per cent increase from the 1,892 sales recorded in August 2022. This was 13.8 per cent below the 10-year seasonal average (2,663).

“It’s been an interesting spring and summer market, to say the least. Borrowing costs are fluctuating around the highest levels we’ve seen in over ten years, yet Metro Vancouver’s housing market bucked many pundits’ predictions of a major slowdown, instead posting relatively strong sales numbers and year-to-date price gains north of eight per cent, regardless of home type.”
Andrew Lis, REBGV director of economics and data analytics

There were 3,943 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2023. This represents an 18.1 per cent increase compared to the 3,340 homes listed in August 2022. This was 5.3 per cent below the 10-year seasonal average (4,164).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,082, a 0.2 per cent decrease compared to August 2022 (10,099). This was 13.4 per cent below the 10-year seasonal average (11,647).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for August 2023 is 23.9 per cent. By property type, the ratio is 14.2 per cent for detached homes, 30.3 per cent for townhomes, and 31.9 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“It’s a bit of a tortoise and hare story this year, with sales starting the year slowly while prices increased due to low inventory levels,” Lis said. “As fall approaches, sales have caught up with the price gains, but both metrics are now slowing to a pace that is more in-line with historical seasonal patterns, and with what one might expect given that borrowing costs are where they are.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,208,400. This represents a 2.5 per cent increase over August 2022 and a 0.2 per cent decrease compared to July 2023.

Sales of detached homes in August 2023 reached 591, a 13.2 per cent increase from the 522 detached sales recorded in August 2022. The benchmark price for a detached home is $2,018,500. This represents a 3.3 per cent increase from August 2022 and a 0.3 per cent increase compared to July 2023.

Sales of apartment homes reached 1,270 in August 2023, a 27.4 per cent increase compared to the 997 sales in August 2022. The benchmark price of an apartment home is $770,000. This represents a 4.4 per cent increase from August 2022 and a 0.2 per cent decrease compared to July 2023.

Attached home sales in August 2023 totalled 422, an 18.9 per cent increase compared to the 355 sales in August 2022. The benchmark price of an attached home is $1,103,900. This represents a 3.9 per cent increase from August 2022 and a 0.1 per cent decrease compared to July 2023.

¹ Areas covered by the Real Estate Board of Greater Vancouver include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

² REBGV is now including multifamily and land sales and listings in this monthly report. Previously, we only included detached, attached, and apartment sales, and these additional categories, which typically account for roughly one to two per cent of total MLS® activity per month, are being included for completeness in our reporting.

CLICK HERE – Full REBGV August 2023 Market Update

Vancouver BC – September 5, 2023

Have a look at the REBGV August 2023 Market Update Insights!

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Limited Inventory Drives High House Prices Amid Easing Demand

Resilience in High-End Markets Supports British Columbia’s Average Prices

Source: Western Investor

A scarcity of available listings is contributing to the sustained high prices of houses in British Columbia. However, the provincial real estate association suggests that additional factors could lead to a potential 2% decrease in prices within this year.

_{A limited selection of listings has kept home prices rising despite challenging conditions for buyers.Source: Canadian Real Estate Association/Western Investor}

“The BC housing market has shown remarkable resilience in 2023, with both home sales and prices holding their ground despite significantly higher interest rates.”
Brendon Ogmundson, the Chief Economist at the BC Real Estate Association

In its quarterly housing outlook published on August 29, the BCREA pointed out that due to extremely limited inventory, housing prices have continued to rise through much of the year, even as overall sales have fallen short compared to the previous year. This rise has been primarily driven by activity in the higher-priced markets, where buyers have remained engaged despite a decline in listings.

Greater Vancouver has witnessed an increase in sales both in terms of value and volume since May, with benchmark pricing experiencing rapid growth until April, after which it slowed down. The benchmark value for all MLS sales in the Real Estate Board of Greater Vancouver area currently stands at $1.2 million, the same as a year ago.

BCREA forecasts that if the current trends persist, reduced buyer activity could result in an average resale house price decline of 2% to $976,600 province-wide.

Anticipating a return to more typical levels of activity as buyers adjust to the new interest rate environment and a new year commences, the outlook suggests that even though rate cuts may not occur until mid-2025, a normalization of the market is expected.

“As home sales return to their usual levels next year, we project prices to rise by 2.4%, reaching an annual average just above $1 million. However, there’s a potential for higher price growth given the housing supply situation,”
the report states.

Greater Vancouver is projected to maintain its status as the priciest market in the province in 2024, with an average resale price of $1.3 million. Meanwhile, the BC Northern region is anticipated to experience the most substantial value increase at 4.8%, resulting in an average sale price of $435,000. Kamloops and District closely follow with a value growth of 4.2%, reaching an average of $615,000.

BCREA’s analysis underscores the significance of supply in influencing pricing, highlighting the need not only for more listings but also a wider range of housing types, encompassing both resale and new properties.

Nevertheless, residential land sales have experienced a sharp decline this year, indicating sustained supply limitations in the foreseeable future, even as the province mandates construction targets for municipalities to meet housing demand.

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