METRO VANCOUVER
Sales lag despite interest rate cuts; Inventory above 10-year average
Prospective home shoppers in Metro Vancouver showed another month of reluctance in July despite a second Bank of Canada policy rate cut last month and a teeming inventory of available homes. The July sales total of 2,333 was a 2.2% decline from the preceding June, continuing the downward trend of recent months. It was also 5% below the same month one year ago, and almost 18% below the 10-year average for the season. With the Bank of Canada’s July rate cut bringing its policy rate to 4.5%, many economists predicted home sales would begin to rise as mortgages become more affordable. The central bank’s rate reduction in June to 4.75% was followed soon after with major banks lowering their prime rate to 6.95%. And shortly after the central bank’s July cut, Canada’s major banks reduced their prime again to 6.7%. However, while these cuts have produced some relief for variable rate mortgage holders, new mortgage borrowers may be waiting for further rate cuts before negotiating more favorable fixed-rate mortgages. The next Bank of Canada announcement is scheduled for September 4. A growing number of economists now predict at least one, or possibly two, more 25 basis point cuts to come before the end of this year. Canada’s inflation rate at the end of June was 2.7%, still moving toward the Bank’s 2% target. When home purchases pick up, buyers will have a great selection available. New listings in July reached 5,597 across all property types. While this was a 2.2% dip in new listings from June, it was still plentiful and brought the total inventory at the end of July to 14,326 properties, a 39% increase over the same period on year ago and 2.5% above the 10-year seasonal average. Along with the decline in sales and supply build-up over recent month’s, home prices have shown an gradual flattening or modest declines. At the end of July, the composite benchmark price for a residential property in Metro Vancouver was $1,197,700, a 0.8% decrease from the preceding month.
In the section below, you will find my guide to comparative benchmark prices for each property type in different areas of Metro Vancouver. Each overall benchmark price is surrounded by a cluster of the closest three benchmarks on each side of the average. The prices noted are shown with their month-over-month changes and represent the normal price fluctuations that typically indicate the current demand in a particular area. The extremities of the average give you an idea of the range of prices making up the benchmark. Keep in mind that benchmark prices are averages so actual listed prices may provide more precision for your budget planning. If you are interested in looking for a home in a specific neighborhood, please give me call. I can provide you with the most up-to-date data and any new listings. And if you are thinking of listing your home for sale, I can prepare a Customized Market Analysis for your property and advise you on the optimal listing price in the current market conditions. Last month, sales of condominiums led with a total of 1,192; detached home sales reached 688; and townhouse sales totalled 437.
Detached homes
The benchmark price for a single-family detached home in Metro Vancouver at the end of July was $2,049,000, a decrease of 0.6% from the preceding month. The extremities of this average were Vancouver West at $3,509,900 and Sunshine Coast at $896,400. The three municipalities closest to the benchmark on the higher side of the average were: Port Moody at $2,151,900, a decrease of 1.4% from the preceding month; Burnaby North at $2,165,800, a decrease of 0.4% from the preceding month; and Richmond at $2,194,100, a decrease of 0.2% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby East at $1,944,400, a decrease of 0.1% from the preceding month; Vancouver East at $1,867,900, a decrease of 1.3% from the preceding month; and Coquitlam at $1,830,000, a decrease of 0.7% from the preceding month.
Townhouses
The benchmark price for a townhouse in Metro Vancouver at the end of July was $1,124,700, a decrease of 1.2% from the preceding month. The extremities of this average were Vancouver West at $1,444,700 and Sunshine Coast at $755,600. The three municipalities closest to the benchmark on the higher side of the average were: Vancouver East at $1,145,300, a decrease of 0.2% from the preceding month; Richmond at $1,159,700, a decrease of 0.3% from the preceding month; and North Vancouver at $1,352,100, a decrease of 2.7% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby South at $1,088,500, a decrease of 1.2% from the preceding month; Coquitlam at $1,091,900, a decrease of 0.7% from the preceding month; and Port Moody at $1,062,300, an increase of 1.2% from the preceding month.
Condominiums
The benchmark price for a condominium in Metro Vancouver at the end of July was $768,200, a decrease of 0.7% from the preceding month. The extremities of this average were West Vancouver at $1,282,600 and Maple Ridge at $526,300. The three municipalities closest to the benchmark on the higher side of the average were: Burnaby East $794,700, a decrease of 0.9% from the preceding month; North Vancouver at $814,800, a decrease of 1.2% from the preceding month; and Vancouver West at $849,400, a decrease of 0.1 % from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Port Moody at $762,000, an increase of 0.2% from the preceding month; Burnaby North at $755,900, a decrease of 0.5% preceding month; and Coquitlam at $746,900, an increase of 0.1% 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.