METRO VANCOUVER
Mortgage rates up, sales down; prices decline
Home sales in Metro Vancouver declined again last month as mortgage interest rates continue to rise. The total of 2,918 residential sales in May was 9.7% down from the preceding month, and a 31.6% decrease from the same period one year ago. While the impact on home sales is seen as cooling the over-heated market pace after two years of low borrowing rates, last month’s sales volume in Metro Vancouver was actually 12.9% below the 10-year average. On June 1, the Bank of Canada announced another 0.50% increase, bringing its key policy rate to 1.5%. Commercial bank mortgage rates are moving up in tandem with the central bank’s inflation-fighting policy rate increases, scheduled to continue at least until the end of this year. Yet, for prospective buyers feeling sidelined during this current period, there is another market dynamic they should watch. Price reductions are beginning to appear in all property types (see bolded decreases noted in my monthly selection below). A price drop may serve to lessen the impact of a higher mortgage rate, so I encourage clients to watch the market place carefully. The housing supply in Metro Vancouver is also trending upwards, with 6,377 new homes across all property types listed in May, a 4.4% increase from the preceding month. The total inventory at the end of May was 10,010, still down almost 9.0% from last year at this time, but close to 14% above the available stock 2 months ago. This is an ample supply for an excellent choice in the current market. And increasing new listings will also help to moderate price increases as the market moves back to typical levels in a post-pandemic period.
The composite benchmark price for home in Metro Vancouver at the end of May was $1,261,100, a 0.3% decrease from the preceding month. This month the Real Estate Board of Vancouver announced its updated methodology for determining benchmark prices. Under the new methodology, the benchmark will be based on the rolling average of comparable homes in the past five-year period. This is a change from the previous method of linking prices to historical benchmark attributes. The new methodology will mean a “typical” home is based on the features of homes that sold the most in the past five years, thus keeping the benchmark up to date. In my monthly selection of benchmark prices for all property types, I provide a general guide to price changes on a monthly basis in different areas on Metro Vancouver. This month I encourage clients to note the price decreases occurring now. The benchmarks listed below here are simply to help you determine where you may wish to conduct your home search based on your purchasing budget. Please feel free to contact me for more detailed information on any neighborhood you are interested in. And if you are thinking about listing your home for sale, I can prepare a Custom Market Analysis for your property and advise you on an optimal listing price in this current market.
Detached homes
The benchmark price for a single-family detached home in Metro Vancouver at the end of May was $2,093,600, a decrease of 0.4% from the preceding month. The extremities of this average were Vancouver West (not West Vancouver) at $3,490,000 and Sunshine Coast at $1.045,400. The three municipalities closest to the benchmark on the higher side of the average were: Burnaby North at $2,117,600, a decrease of 0.9% from the preceding month; Richmond at $2,178,300, a decrease of 0.9% from the preceding month; and Port Moody at $2,231,100, an increase of 0.6% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Burnaby East $1,963,700, a decrease of 0.7% from the preceding month; Coquitlam at $1,950,800, a decrease of 0.9% from the preceding month; and Vancouver East at $1,947,000, an increase of 0.3% from the preceding month.
Townhouses
The benchmark price for a townhouse in Metro Vancouver at the end of May was $1,141,200, a decrease of 0.6% from the preceding month. The extremities of this average were Whistler at $1,543,300 and Sunshine Coast at $774,700. The three municipalities closest to the benchmark on the higher side of the average were: Vancouver East at $1,145,700, a decrease of 0.7% from the preceding month; North Vancouver at $1,399,000, an increase of 0.9% from the preceding month; and Vancouver West (not West Vancouver) at $1,530,200, a decrease of 1.2% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Port Moody at $1,138,500, an increase of 0.1% from the preceding month; Richmond at $1,127,800, no change from the preceding month; and Coquitlam at $1,121,400, a decrease of 2.4% from the preceding month.
Condominiums
The benchmark price for a condominium in Metro Vancouver at the end of May was $779,700, an increase of 0.4% the from the preceding month. The extremities of this average were West Vancouver at $1,267,100 and Maple Ridge at $574,600. The three municipalities on the higher side of the average were: Burnaby South at $809,200, an increase of 0.1% from the preceding month; Burnaby East at $838,800, a decrease of 0.5% from the preceding month; ( and North Vancouver at $841,600, an increase of 1.4% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Tsawwassen at $757,600, an increase of 0.3% from the preceding month; Port Moody at $757,600, an increase of 0.3% from the preceding month; and Burnaby North at $757,800, an increase of 0.8% 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.