A market that’s waiting for something to happen
October’s inertia carried into November, with buyers remaining hesitant and sellers showing no signs of urgency. And while rising interest rates continue to constrain purchasing power and push home values down, there’s evidence that we’ll be entering a more stable, and active, market in the months ahead.
available homes to under 14,000 across the region (20% lower than is typical at this time of the year). As we’ve mentioned in past editions of the rennie review, this again highlights how rising interest rates have had a greater impact on the purchasing affordability of buyers than on the payment affordability of current owners. This latter dimension is more directly impacted by the labour market (if you have a job it’s generally easier to pay your mortgage; no job, and it’s usually more difficult), which has been characterized by a sub-5% unemployment rate since May. As such, it’s not a huge surprise that new listings were down 23% last month versus one year ago (when the unemployment rate was above 6%). With December’s market conditions unlikely to look much different from November’s (or October’s…or September’s…), we’re looking to the new year for a change of pace. A likely halt to further rate hikes will serve to stabilize the demand side of Vancouver’s housing market, setting the stage for what promises to be a more active spring.
In last month’s rennie review, we predicted that November’s MLS sales counts for the Vancouver Region would max out below 3,000; that is what ultimately transpired, with our market tallying 2,407 sales during the month. This was down 55% (!) from 2021’s record November count of more than 5,300 sales, 13% lower than October 2022 (versus a typical seasonal drop of 10%), and 39% below the past-decade November average. Now a week into December, and Vancouver’s market is on pace for fewer than 2,400 sales, which would mark the first time in a decade that the region has strung together 6 straight months of sub- 3,000 transactions. Demand continues to be hampered by both rising borrowing costs and the uncertainty around when interest rates will stop climbing, though the Bank of Canada just
this week indicated—after raising its trend- setting rate by another 50 basis points—that the end of this cycle of monetary tightening is likely near. On the backs of both buyer scarcity and evermore expensive money, the overall composite benchmark price in the Vancouver Region fell by 1.7% between October and November, marking the seventh straight month of declining home values. Prices for all home types fell month-to-month into November, pushing them closer to last year’s levels: condo and townhome prices are now only 4% and 3%, respectively, higher than they were one year ago, while that of detached homes is 3% lower. Prices would certainly be lower than they are—that is, they would have fallen faster—if it were not for the continued vice on supply, which held the total number of
Copyright © 2022 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of December 5, 2022. All data from Real Estate Board of Greater Vancouver and Fraser Valley & Rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 3
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