finishing the year in a different gear
Sales in the Vancouver Region were up on a year-over-year basis for the third consecutive month in December. A relatively strong finish to the year helped push total sales in 2024 above 2023 levels, and 2025 begins with sales on a new trajectory.
Though this was still 21% below the prior 10- year average of 50,774 sales, it is a clear sign that the real estate market has begun to turn the page on what has been more than two years of challenging conditions. Heading into the new year, activity should continue to improve with further interest rate declines expected in the coming months and as the effects of recent changes to mortgage rules begin to take hold. As of December 15th, buyers can put lower down payments and secure cheaper insured mortgage financing on homes priced up to $1.5 million, up from $1.0 million previously. Additionally, first-time homebuyers and all buyers of newly-built homes will be able to access amortizations of up to 30 years on insured mortgages, up from 25 years previously. Stay tuned in the coming weeks for the 2025 rennie outlook where we will provide our forecasts on everything from resales to pre-sales to housing starts (and more) in the Vancouver Region in 2025.
The Vancouver Region closed 2024 with another month of relatively strong sales activity. There were 2,684 MLS sales in December, a 28% increase from the prior December (2,097 sales) and the most for the month of December since 2021 (4,372 sales). Notably, this was the third consecutive month where sales were up quite significantly on a year-over-year basis. Sales through the first nine months of 2024 had generally been trending below 2023 levels, but there was a sharp shift in October with sales up 34% year-over-year, followed by a 29% gain in November. This trend of large double-digit percentage sales increases has not been limited to the Vancouver Region either, with both Victoria and Kelowna on a similar path since October. A number of factors have helped contribute to improving sales activity across BC in recent months, chief among them being a meaningful decrease in borrowing costs.
Between June and December, the Bank of Canada delivered a cumulative 175 basis points worth of interest rate cuts, bringing its key policy rate to 3.25% from a more than two-decade high of 5.00%. This decline, alongside easing government bond yields, has helped put downward pressure on mortgage rates, which has improved buyer purchasing power. Relatively stable home values over this period have only augmented the improvement in housing affordability conditions. Additionally, more than two years of pent-up demand and a more than decade-high in active listings helped contribute to stronger sales activity in the final months of 2024. With sales on a new trajectory to finish the year, the Vancouver Region managed to stave off a third consecutive year of declining annual sales. There were 40,173 total sales across the region in 2024, a slight increase of 0.6% relative to 39,937 sales in 2023.
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