the rennie review - June 2021

housing remains a hot commodity in May Despite recent evidence of a re-balancing of the market for residential real estate in the Vancouver Region, homes continue to sell at a near-record pace as supply remains lacking.

with total listings moving back to their May 2020 levels. Unlike the relative consistency in sales trends across home types, only detached listings were higher than one year ago (+9%), with townhome and condo listings down by 18% and 4%, respectively, vs May 2020. Compared to long-run average inventory levels, last month’s inventory was lower by 23%, ranging from condos being down 18% to townhomes being down 32%. Inventory remains constrained in both the Greater Vancouver and Fraser Valley board areas, with listings lower by 21% and 27%, respectively, versus the long-run average. With mortgage rates having risen in recent months (moving from a low of 1.39% for a 5-year fixed rate back in February to around 2.00% today), and both the Office of the Superintendent of Financial Institutions and the Canada Mortgage & Housing Corporation having raised the qualifying interest rates for borrowers (effective June 1st), we could see the market equilibrium shift over the summer, which is typically slower anyway. That said, if recent history is any indication, the shift may not be as significant as some might be expecting.

As we noted last month, the at-times chaotic housing market here in the Vancouver Region since the middle of 2020 has been generating a lot of noise in the data. This remains true when we look at the most recent data, for May, though we are beginning to see signs that the market’s emotional outburst has already reached its apex. Regardless, two fundamental observations about our market continue to hold—namely that demand is elevated and supply is constrained—even in the face of divergent trends over the past two months. After peaking at 8,888 sales in March— an all-time record for any month in the history of the Vancouver Region (which encompasses the Greater Vancouver and Fraser Valley real estate)—sales fell by 12% to 7,784 in April. Sales then fell again in May, by 8%—making it two straight months of declining sales.

This recent trend blurs the bigger picture, however, with the 7,132 sales in May representing the second-highest-ever May sales count in this region (7% lower than the all-time May high of 7,701 sales in 2016). Additionally, May’s sales were 217% above those of May 2020—when the fewest May sales were recorded since 1990—and 44% higher than the past-decade May average. All home types are transacting at elevated levels, with detached home sales up 23%, townhome sales up 60%, and condo sales up 63% versus the long-run average for the month. From a geographic perspective, last month’s sales in the Greater Vancouver board area were 31% above the long-run average, while those in the Fraser Valley board area were up 69%. May marked the third consecutive month of MLS inventory expansion in this region,

Copyright © 2021 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 June 7, 2021. 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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