METRO VANCOUVER

Rate of sales decline slows; long-term home value holds in Metro Vancouver

Home sales showed a marked reduction in the rate of decline for the month of August in Metro Vancouver compared to recent months. While sales showed a decline of 22.8% decline from June to July, the drop from July to August was a mere  0.9%. Although it is too early to tell if sales activities are levelling off under the Bank of Canada’s current interest rate increases, the latest monthly sales data suggests a rebalanced  market may already exist in Metro Vancouver. The market’s total sales volume for August was 40.7% below the same period one year ago, and 29.2% below the 10-year average.  The central  bank rate increases, which began in March, are aimed at stemming Canada Consumer Price Index inflation, which remains above 7.0%. However, the central bank has noted that even though CPI inflation has eased a bit since the interest hikes began, the country’s core inflation continues to move up, reaching 5.5% in July. The BoC will therefore likely need to raise its policy rate still higher in order to bring inflation down to its target level of 2.0%. Thus, home buyers will see even higher thresholds to qualify under the mortgage stress test which is at least 2.0% higher than their actual mortgage interest rate. Variable mortgage rates will also have to rise, as some experts predict to around 4.35%, while five-fixed mortgage rates will peak around 5.0%. Prices have also dropped during this period of  market cooling, as have new listings.

The composite benchmark price for a residential property in Metro Vancouver at the end of August was $1,180,500, a 2.2% decrease from the preceding month. However, this benchmark price is still 7.4% higher than one year ago, an indication of the long-term value in Metro Vancouver’s residential market. And while new listings saw a 16% decrease from the previous month, the total inventory of available homes at the end of August was 9,662, a 7.1% increase over the same period last year. This provides buyers a good selection across all property types in a climate of reduced prices. The my monthly selection below of benchmark prices, you can compare the month-over-month price changes in different areas in Metro Vancouver. During the past month of August, sales of condominiums saw the highest volume among the three property types, reaching a total 998 units sold, an increase of 8.7 % over the same month one year ago. Detached home sales totalled 517, a 7.9% increase over August last year; and townhouse sales reached a total of 355, a 2.5% increase over one year ago. These notable year-over-year increases show a continuing confidence in the Metro Vancouver market even in the current sales downturn. It is important to place the current rate of decreases in the context of the incentivised buying of record low interest rates set during the pandemic period. Please feel free to contact me for additional information on properties in your preferred area. Benchmarks can be used a guides, but these averages are made up of a wide range of specific prices between the extremities of each benchmark noted here.     

Detached homes

The benchmark price for a single-family detached home in Metro Vancouver at the end of August was $1,945,100 a decrease of 2.3% from the preceding month. The extremities of this average were West Vancouver at $3,340,400 and Sunshine Coast at $957,200.  The three municipalities closest to the benchmark on the higher side of the average were: Burnaby North at $1,962,000, a decrease of 5.5% from the preceding month; Burnaby South at $2,105,200 a decrease of 0.2% from the preceding month; and Richmond at $2,111,300, a decrease of 0.9% from the preceding month. (Squamish is excluded here because it is too far out for my clients.) The three municipalities closest to the benchmark on the lower side  of the average were: Coquitlam $1,794,700, a decrease of 3.2% from the preceding month; Vancouver East also at $1,794,700, a decrease of 1.6% from the preceding month; and Burnaby East at $1,730,000, a decrease of 4.2% from the preceding month.

Townhouses

 

The benchmark price for a townhouse in Metro Vancouver at the end of August was $1,069,100, a decrease of 2.5% from the preceding month. The extremities of this average were Whistler at $1,487,800 and Sunshine Coast at $749,400. The three municipalities closest to the benchmark on the higher side of the average were: Port Moody at $1,096,600, an increase of 2.3% from the preceding month; Vancouver East at $1,108,000, a decrease of 3.7% from the preceding month; and North Vancouver at $1,288,800, a decrease of 3.6% from the preceding month; The three municipalities closest to the benchmark on the lower side of the average were: Richmond at $1,059,100, a decrease of 1.9% from the preceding month; Coquitlam at $1,058,500, a decrease of 2.1% from the preceding month; and Burnaby South at $964,300, a decrease of 2.6% from the preceding month.

 

Condominiums                           

 

The benchmark price for a condominium in Metro Vancouver at the end of August was $740,100, a decrease of 2.0% the from the preceding month. The extremities of this average were West Vancouver at $1,234,700 and Sunshine Coast at $600,700. The three municipalities on the higher side of the average were: Tsawwassen at $741,800, a decrease of 1.3% from the preceding month; Burnaby South at $776,300, a decrease of 0.3% from the preceding month;  and North Vancouver at $782,700, a decrease of 2.6% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Port Moody at $719,600, a decrease of 0.9% from the preceding month; Burnaby North at $717,300, a decrease of 2.4% from the preceding month; and Ladner at $714,200, an increase of 1.4% from the preceding month.

 

I can help

 

These are challenging times for many homebuyers and homeowners. With Bank of Canada interest rates now rising, you may need to adjust your financial strategy for your home purchase If you need help in managing your home ownership plans, I can help. I have post-graduate education in business along with years of experience in both banking and real estate. I am happy to help in any way I can. I want my clients to achieve their goals. Please don’t hesitate to call me.