sitting tight versus fight or flight High interest rates continue to weigh on the Vancouver Region’s housing market, with buyers pulling back at a time when more sellers are coming to market. These conditions have yielded declining home values and pushed inventory to its highest level in three years.
any month since October 2020. It’s worth noting, however, that inventory remains 9% below its long-run average. These changing market conditions have begun to impact home values, with the composite benchmark price in the Vancouver Region declining in September for the second consecutive month (by 0.5%) following six months of increases. And while the decrease in values was relatively small last month, expect more price softening in the coming months as current conditions persist into the near- and medium-term. Buyers aren’t likely to return in great numbers until they receive some clarity about, and relief from, from the Bank of Canada vis-a-vis stable, and then lower, interest rates. Meanwhile, as the impact of today’s high borrowing costs continue to cascade through the economy, more homeowners will likely look to sell as a result, supporting the supply-side of our market.
We are now one and a half years into the Bank of Canada’s unprecedented rate tightening cycle, and with interest rates at their highest level in two decades, both the economy and our local housing market have been surprisingly resilient to-date. But as we noted in last month’s rennie review, specifically in relation to the labour market, that’s starting to change. And for our housing market, that change has manifested with more buyers sitting on the sidelines and more sellers bringing listings to market—which means growing supply and downward pressure on prices. Fewer willing buyers translated to fewer transactions last month: there were 2,918 MLS sales in the Vancouver Region in September, which was the lowest monthly total since February, and the fourth consecutive monthly decline in sales. And while the typical seasonal pattern is fewer sales in September than August, last
month’s decrease of 17% far outpaces the typical decline of just 3%. Additionally, September’s sales count was 27% less than the past-decade average. (For what it’s worth, last month’s sales were actually 15% higher than one year ago—though sales through the latter half of 2022 were historically low.) More sellers translated to more supply last month: there were 8,005 new MLS listings in September, which was up 28% from August. Not only does this outpace the typical seasonal increase of 18%, it’s 24% higher than one year ago, and 5% more than the past 10-year average. With new listings up and sales down, inventory has—naturally—grown of late: there were 16,338 homes available for purchase at the end of September, which was an 11% increase from August (versus the typical 1.2%), 9% higher than one year earlier, and represents the highest total of
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 October 10, 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
Made with FlippingBook - professional solution for displaying marketing and sales documents online