METRO VANCOUVER
Market confidence returning with lower interest rates; declining prices
Opening the new year on a high note for home buyers, lower interest rates are leading to greater confidence with residential markets returning to historical norms. The Bank of Canada’s last rate cut on December 11 brought the key policy rate down to 3.25%, the lowest since 2022. With the country’s consumer price index inflation rate still around 2%, where it has been since last summer, many economists had predicted the central bank would cut another modest .25% in its next scheduled policy rate announcement January 29. However, recent data on improved jobs creation in Canada suggests inflation may not be quite tamed yet, and has changed that prediction to a coin-toss. In either scenario, variable mortgage rates can be expected between 4% and 5% for qualified buyers, providing one of the best incentives for home purchases in several years. Prospective buyers are therefore encouraged to make purchase decisions now, as greater confidence in market stability settles in. With the Bank of Canada’s inflation rate now continuing in its mid-point target range of 2%, it is an opportune time to make a home purchase. The Metro Vancouver residential market is also responding in several areas with declining prices as affordability continues to factor into price levels. There will likely continue for some time to be competing vectors on prices: upward pressure from increased demand moderated by downward pressure on the affordability side. However, the plentiful supply in Metro Vancouver’s residential market will also moderate upward price pressure. The current inventory offers a excellent range of homes across all property types. New listings in December totalled 1,676. Although this was a 50% decline from the preceding month of November which had seen an outsized surge, December’s figure is more than 26% higher than the same period last year, and within 1.1% of the 10-year seasonal average. This left the total number of available homes at the beginning of this year at 10.948, close to 25% more than in one year earlier. This is also more than 25% above the 10-year seasonal average, showing a desire by prospective sellers to make a sale at this time. At the end of December, the composite price for a residential property in Metro Vancouver was $1,171,500, a decline of 0.1% from the preceding month.
In my monthly guide to home prices below, I have selected in each property type the three closest benchmark prices above and below the overall benchmark average in different areas of Metro Vancouver. These benchmarks represent prices for comparable homes in different neighborhoods. The month-over-month price fluctuations typically reflect the current market activity in the area. Remember that benchmarks are averages and note the extremities of each average to get an idea of the range of prices making up the average. Particular prices may vary considerably from an average so if you are interested in a particular area, please give me call. I can provide you with the most up to date listings and assist you in finding a price that meets your budget. If you are thinking about listing your home for sale, I can also prepare a Customized Market Analysis for you property and advise you on the optimal listing price in the current market conditions. Please don’t hesitate to get in touch. I love to help my clients in any way I can.
Detached homes
The benchmark price for a single-family detached home in Metro Vancouver at the end of December was $1,997.000, no change from the preceding month. The extremities of this average were Vancouver West at $3,374,900 and Sunshine Coast at $897,000. The three municipalities closest to the benchmark on the higher side of the average were: Port Moody at $2,095,800, an increase of 0.5% from the preceding month; North Vancouver at $2,130,900, a decrease of 0.8% from the preceding month; and Burnaby North at $2,133,100, an increase of 1.1% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby East at $1,957,700, an increase of 0.3% from the preceding month; Vancouver East at $1,855,700, a decrease of 0.4% from the preceding month; and Coquitlam at $1,772,700, an increase of 0.2% from the preceding month.
Townhouses
The benchmark price for a townhouse in Metro Vancouver at the end of December was $1,114,600, a decrease of 0.3% from the preceding month. The extremities of this average were: Whistler at $1,662,100 and Sunshine Coast at $747,100. The three municipalities closest to the benchmark on the higher side of the average were: Richmond at $1,134,800 (Squamish was not counted here because it is too far out for my clients) no change from the preceding month; Vancouver East at $1,147,000, an increase of 2.6% from the preceding month; and North Vancouver at $1,311,700, a decrease of 2.8% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Coquitlam at $1,071,600, an increase of 1.4% from the preceding month; Ladner at $1,035,800, an increase of 2.7% from the preceding month; and Port Moody at $1,030,700, an increase of 0.4% from the preceding month.
Condominiums
The benchmark price for a condominium in Metro Vancouver at the end of December was $749,900, a decrease of 0.4% from the preceding month. The extremities of this average were: West Vancouver at $1,226,100 and Sunshine Coast at $467,300. The three municipalities closest to the benchmark on the higher side of the average were: Port Moody $752,100, a decrease of 0.4% from the preceding month; Burnaby East at $788,000, a decrease of 0.6% from the preceding month; and North Vancouver at $796,100, no change from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby North at $734,900, a decrease of 1.0% from the preceding month; Coquitlam at $728,700, no change from preceding month; and Richmond at $724,400, a decrease of 1.0% from the preceding month.
Let me help
These are challenging times for home buyers and homeowners. With higher mortgage interest rates, 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.