Market Update

MAY 2023 METRO VANCOUVER HOUSING MARKET HIGHLIGHTS

May 2023 Market Update: Competition Heats up Among Buyers as Summer Arrives

Source: REBGV

While the year started slower than usual, Metro Vancouver’s¹ housing market is showing signs of heating up as summer arrives, with prices increasing for the sixth consecutive month.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,411² in May 2023, which is a 15.7 per cent increase from the 2,947 sales recorded in May 2022, and a 1.4 per cent decline from the 10-year seasonal average (3,458).

“Back in January, few people would have predicted prices to be up as much as they are – ourselves included. Our forecast projected prices to be up modestly in 2023 by about two per cent at year-end. Instead, Metro Vancouver home prices are already up about six per cent or more across all home types at the midway point of the year.”
Andrew Lis, REBGV director of economics and data analytics

There were 5,661 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in May 2023. This represents an 11.5 per cent decrease compared to the 6,397 homes listed in May 2022, and was 4.3 per cent below the 10-year seasonal average (5,917).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,293, a 10.5 per cent decrease compared to May 2022 (10,382), and 20.6 per cent below the 10-year seasonal average (11,705).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for May 2023 is 38.4 per cent. By property type, the ratio is 28.5 per cent for detached homes, 45 per cent for townhomes, and 45.5 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.

“You don’t have to squint to see the reason prices continue to increase. The fundamental issue remains that there are more buyers relative to the number of willing sellers in the market. This is keeping the amount of resale homes available in short supply,” Lis said.

“And in a surprising twist, MLS® sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity having been slower than usual this spring. If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22, or even 2016/17.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,188,000. This represents a 5.5 per cent decrease over May 2022 and a 1.3 per cent increase compared to April 2023.

Sales of detached homes in May 2023 reached 1,043, a 30.7 per cent increase from the 798 detached sales recorded in May 2022. The benchmark price for a detached home is $1,953,600. This represents a 6.7 per cent decrease from May 2022 and a 1.8 per cent increase compared to April 2023.

Sales of apartment homes reached 1,730 in May 2023, a 7.9 per cent increase compared to the 1,604 sales in May 2022. The benchmark price of an apartment home is $760,800. This represents a two per cent decrease from May 2022 and a 1.1 per cent increase compared to April 2023.

Attached home sales in May 2023 totalled 608, a 16.7 per cent increase compared to the 521 sales in May 2022. The benchmark price of an attached home is $1,083,000³. This represents a 4.7 per cent decrease from May 2022 and a 0.2 per cent increase compared to April 2023.

¹Areas covered by the Real Estate Board of Greater Vancouver include: 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.

²REBGV 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.

³ The national MLS® Home Price Index (MLS® HPI) operations group underwent an annual review of the model in May in-line with statistical best practices. The attributes and neighbourhoods within the model were updated based on sales data to more accurately reflect current market conditions. To ensure the MLS® HPI coverage is consistent and comparable, historical aggregate and composite data has been recalculated.

CLICK HERE – Full REBGV May 2023 Market Update

Vancouver BC – June 3, 2023

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

DOWNLOAD the REBGV May 2023 Market Update CLICK HERE
See the Monthly Market Stats CLICK HERE
For more market information from the Real Estate Board of Greater Vancouver CLICK HERE
To view Geoff Jarman’s Listings CLICK HERE

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Comprehensive Quarterly Report on the Pre-Sale Real Estate Market in Greater Vancouver and Fraser Valley Regions

Insightful Analysis of Pre-Sale Market Trends: Active Sub-Markets, Development Activity, Upcoming Launches and Releases in Greater Vancouver and Fraser Valley Regions

Source: MLA Canada

Over the past two years, Metro Vancouver’s real estate market has experienced a modern-day version of the classic tortoise and the hare tale. 2022 marked the year of the hare, with a swift and robust start, followed by a loss of momentum and “nap” for the rest of the year. In contrast, 2023 has been characterized by slower but steady and consistent progress. Similar to the fable, the market dynamics emphasize the value of stable and consistent progress over relying solely on short-term bursts of speed. While it’s unlikely that the tortoise (2023) will surpass the hare (2022) in aggregate sales, it will provide greater certainty for market participants and position the market for greater success in 2024.

The recent decision by the Bank of Canada to pause rate hikes has strengthened the sentiment that market activity will remain stable for the rest of the year. Additionally, the central bank’s announcement that inflation is expected to reach 3% by the end of 2023 has led many to believe that interest rates will decrease in the next twelve months. This news is particularly significant in the pre-sale market, where long-term outlooks, market stability, and anticipated future demand play a crucial role in potential buyers’ decisions.

During the first quarter of 2023, 1,661 units were released to the market as a part of 14 presale programs, evenly distributed between the Greater Vancouver and Fraser Valley markets, with 52% (916) in the former and 48% (745) in the latter. However, same-quarter sales absorptions for these programs were only 43% (711), significantly lower than the 74% experienced during the same period last year. Therefore, it is important not to normalize the deviation when comparing the two periods, as market activity at the beginning of last year was driven by buyers wanting to secure historically low-interest rates.

Burnaby was the most active submarket in terms of released inventory, with two prominent presale programs, Perla by Polygon and South Yards by Anthem, standing out with same-quarter sales absorptions higher than the market average, reaching 58%. The early sales momentum of these programs highlights the robust market activity seen in the Burnaby market, which also extended to West Coquitlam, where there was higher-than-expected traffic to sales floors.

Metro Vancouver’s real estate market is facing a critical shortage of supply, which has helped maintain prices and keep purchasing conditions in favor of sellers. Despite a decrease in demand to levels not seen since 2009, the number of actively listed resales at the end of March was the lowest in over 20 years. As lending conditions improve, supply will become the primary hurdle for those looking to enter the market.

Given the current market conditions, developers looking to launch their products in the Fall have a window of opportunity. With low launch activity and stable sales absorptions so far this year, we recommend that developers plan early sales strategies in the next few weeks to prepare for opportunities in the coming months. This is especially true for developers with upcoming products in Burnaby, West Coquitlam, and Surrey.

To access details regarding active sub-markets, development and rezoning application activity, project launches, and anticipated releases for the next quarter, please download the MLA report

To read more local news and market updates please check our BLOG PAGE

To view Geoff Jarman’s Listings CLICK HERE

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