METRO VANCOUVER

Market rebalancing sees prices decline, supply increase

As Metro Vancouver’s residential market continues to adjust the Canada’s changing mortgage environment, higher borrowing costs have served to quell home sales significantly. June sales dropped to 2,444, a decline of more than 16% from the preceding month, and 35% down from the same period one year ago. This was also a 23.3% below the 10-year average. Notably, as part of the market’s current rebalancing, the decline in sales is improving the inventory of available homes which had previously shrunk to its lowest levels in years. The total supply of home in Metro Vancouver at the end of June reached 10,425, a 4.1% increase over May this year. However, while new listings this past June were still almost 18% lower than in May, and just over 10% less than one year ago, these declines may indicate many potential sellers are holding on to their properties during this period of high inflation, as payments on existing mortgages may be seen by some as benefitting from inflated dollar values at the current time. In late June, the Bank of Canada reported that consumer price inflation had risen to 7.7%, up from 6.8% in April and the biggest yearly increase since 1983. A further Bank of Canada policy rate increase is scheduled for today. (Our newsletter was produced ahead of today’s announcement.) Today’s rate increase, as speculated widely by many economists, will be the largest in the BoC’s current series of increases, adding 75 basis points to bring the policy rate to 2.25%, the highest in the last five months.  

The composite benchmark price for a residential property in Metro Vancouver at the end of June was $1,235,900, a decline of 2.0% from the previous month. This is the second consecutive monthly decrease in the composite benchmark since the Bank of Canada rate increases began in March this year. The composite benchmark decrease in May of 0.3% was significantly less  than the June decrease, suggesting that the Bank of Canada’s higher rates are working to cool  Metro Vancouver market from the overheated pandemic period. In the selection of benchmarks below for each property type in different areas of Metro Vancouver at the end of June, you will see the average price for comparable homes along with the one month price change. In almost all instances, the benchmark prices shows a decrease from the preceding month. In terms of sales volumes for each property type in June, the most sales were in Condominiums, reaching total sales of 1,326, a 25.3%  decrease compared with the same period one year ago. Sales of detached homes followed with June’s total reaching 683, a 48.3% decrease from one year ago. Townhouse sales for June totalled 465, a 36% decrease from June one year ago. The benchmark prices are meant as a guide to the current prices and price changes in different areas for both buyers and sellers. It is important to remember, however, that benchmarks are average prices and individual property prices may vary significantly. Please feel free to call me if you would like more detailed information for any property type in any region. I keep a close eye on the market and can advise you on making an offer for a listed home, or on the optimal asking price if you are thinking of selling.

Detached homes

The benchmark price for a single-family detached home in Metro Vancouver at the end of June was $2,058,600, a decrease of 1.7% from the preceding month. The extremities of this average were Vancouver West (not West Vancouver) at $3,497,700 and Sunshine Coast at $1,025,600.  The three municipalities closest to the benchmark on the higher side of the average were: Burnaby North at $2,128,000, an increase of 0.5% from the preceding month; Richmond at $2,160,500 a decrease of 0.8% from the preceding month; and Coquitlam at $1,874,100, an increase of 3.9% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Vancouver East $1,904,000, a decrease of 2.2% from the preceding month; Burnaby East at $1,888,500, an increase of 0.5% from the preceding month; and Port Moody at $2,201,300, a decrease of 1.3% from the preceding month.

Townhouses

 

The benchmark price for a townhouse in Metro Vancouver at the end of June was $1,15,600, a decrease of 2.2% from the preceding month. The extremities of this average were Whistler at $1,531,100 and Sunshine Coast at $770,500. The three municipalities closest to the benchmark on the higher side of the average were: Port Moody at $1,126,500, a decrease of 1.9% from the preceding month; Vancouver East at $1,130,800, a decrease of 1.3% from the preceding month; and North Vancouver at $1,347,200 a decrease of 3.7% from the preceding month;  The three municipalities closest to the benchmark on the lower side of the average were: Richmond at $1,108,200, a decrease of 1.7% from the preceding month; Coquitlam at $1,086,500, a decrease of 3.1% from the preceding month; and Burnaby South at $1,041,500, a decrease of 2.2% from the preceding month.

 

Condominiums                           

 

The benchmark price for a condominium in Metro Vancouver at the end of June was $766,300, a decrease of 1.7% the from the preceding month. The extremities of this average were West Vancouver at $1,255,800 and Maple Ridge at $564,300. The three municipalities on the higher side of the average were: Burnaby South at $787,300, a decrease of 2.7% from the preceding month; Burnaby East at $816,700, a decrease of 2.6% from the preceding month;  and North Vancouver at $819,600, a decrease of 2.6% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Tsawwassen at $763,500, a decrease of 1.9% from the preceding month; Port Moody at $747,300, a decrease of 1.4% from the preceding month; and Richmond at $746,200, an increase of 1.0% 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.