the rennie review - July 2023

sales and listings slow as interest rates continue to grow After months of a-seasonal trending, the housing market in the Vancouver Region changed course in June, with both sales counts and new listings declining for the first time this year.

listings were also down 9% from May, a slightly larger drop than the more typical seasonal decline of 8%.

Inventory once again expanded in June, increasing to 14,297 homes available for

purchase at the end of the month, but this was still 12% below last year’s level. And while this was an 8% increase from May, which is much more than the typical May-to-June increase of 2%, it’s still 22% below the past-10 year June average. The combination of fewer sales and more inventory led to an increase in the months- of-inventory (MOI) measure in June, which rose to 3.0, though still within the bounds of a sellers’ market (anything below 5 MOI is considered a sellers’ market). Looking ahead, expect further declines in sales counts in the summer months as fewer buyers engage with the market, and as everyone copes with what is once again a rising rate environment. And while listings usually plateau during this same period, the noted headwinds are likely to bring additional inventory to the market, eventually leading to balanced market conditions and softening prices.

Accompanying the advancement of the calendar into June was a relatively predictable, if delayed, trend in our local housing market: falling sales counts and fewer new listings, both of which had been steadily increasing since the start of the year, and both of which typically peak around March. And while each of these metrics declined from the previous month at a rate in line with their historical averages, there is likely more than just typical seasonality at play. It’s true, many Metro Vancouver residents are turning their attention away from buying and selling real estate and toward their summer holiday plans, but there are also plenty of economic headwinds blowing in that may further impact the housing market in the near term. Notably, the Bank of Canada not only ended its rate-hiking hiatus on June 7th with a 25 basis-point lift, but it gave consumers the impression that rates might increase again in July (and ultimately they did, by another 25 basis points, to 5.00% on July 12th). With even higher

interest rates and no corresponding decline in home prices—in fact, benchmark prices were up once again in June—would-be buyers’ purchasing power has, on average, been further eroded. Inflation, meanwhile, remains elevated, with the most recent read on headline inflation being 3.4%—a level that continues to make the Bank of Canada squirm. And to top it off, the labour market has shown some early signs of softening: though the national unemployment rate is still quite low, at 5.4% (5.7% here in Metro Vancouver), it has increased in each of the past 2 months. So with all that said, total MLS sales hit 4,824 in June, which is actually 32% higher than the depressed total from June 2022. Sales remained 3% below the past 10-year June average, though, and were down 4% from May (though this is in line with the typical May-to-June decrease). Meanwhile, there were 8,250 new listings last month, which was 0.2% less than last June, and 1.3% below the past-decade average. New

Copyright © 2023 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 July 4, 2023. 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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