Home sales in Metro Vancouver decreased by 3.8 per cent year-over-year in September, signaling that recent reductions in borrowing costs have yet to significantly boost demand, Greater Vancouver Realtors (GVR) reports.

The region saw 1,852 residential sales in September, down from 1,926 in the same period last year. This figure is also 26 per cent below the 10-year seasonal average of 2,502.

“Real estate watchers have been monitoring the data for signs of renewed strength in demand in response to recent mortgage rate reductions, but the September figures don’t offer the signal that many are watching for,” Andrew Lis, GVR’s director of economics and data analytics explains. “Sales continue trending roughly 25 per cent below the 10-year seasonal average in the region, which, believe it or not, is a trend that has been in place for a few years now.

Lis adds that although sales are now tracking slightly below GVR’s forecast, they remain optimistic that 2024 sales will still end up higher than 2023’s.

Market overview

There were 6,144 new listings in September, a 12.8 per cent increase from last year and 16.7 per cent above the 10-year seasonal average. Properties listed for sale in Metro Vancouver totalled 14,932 units, up 31.2 per cent from September 2023.

The overall sales-to-active listings ratio was 12.8 per cent, with detached homes at 9.1 per cent, attached homes at 16.9 per cent and apartments at 14.6 per cent. 

‘All signs pointing to further (rate) reductions; it’s not inconceivable that demand may still pick up later this fall’

The increase in new listings has provided buyers with more options, leading to downward pressure on prices and a buyer’s market. “With two more policy rate decisions to go this year, and all signs pointing to further reductions, it’s not inconceivable that demand may still pick up later this fall should buyers step off the sidelines,” Lis notes.

The benchmark price for all residential properties in Metro Vancouver now stands at $1,179,700, reflecting a 1.8 per cent year-over-year decrease and a 1.4 per cent decline from August 2024. 

Detached homes

Sales of detached homes dropped 9.8 per cent compared to last year, with 516 units sold in September. The benchmark price for a detached home is $2,022,200, a 0.5 per cent increase year-over-year but down 1.3 per cent from August.

Apartment homes

Apartment sales fell 4.9 per cent, with 940 units sold. The benchmark price for an apartment is $762,000, marking a 0.8 per cent decline year-over-year and month-over-month.

Attached homes

Attached homes, however, saw a 7.4 per cent increase in sales year-over-year, totaling 378 units. The benchmark price for townhomes is $1,099,200, down 0.5 per cent from September 2023 and 1.8 per cent from August.

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Over the past two years, the rising cost of borrowing has led many Canadians to reconsider their plans to buy a home.

A recent survey by Royal LePage, conducted by Leger, reveals that since the Bank of Canada started increasing its key lending rate in March 2022, 27 per cent of adults in the country have been active in the housing market. However, more than half of them (56 per cent) have had to delay their property search due to the surge in interest rates.

Over half surveyed will continue their home search if interest rates decrease

As the rate of inflation has moderated, nearing the desired 2 per cent target, it’s anticipated that the Bank of Canada will implement its first cut to the overnight lending rate later this year — welcomed news for variable-rate mortgage holders and those who have had to postpone their homebuying plans.

51 per cent of those who delayed their purchase say they’ll resume their search if interest rates decrease. Specifically, 10 per cent would restart their search with a 25-basis-point reduction, 18 per cent await a cut of 50 to 100 basis points and 23 per cent require a cut of more than 100 basis points before reconsidering.

“Buyer behaviour is strongly linked to confidence that the home they want today won’t be less expensive tomorrow”

Phil Soper, president and CEO of Royal LePage, weighs in: “Following the first rate hold by the Bank of Canada in March of last year, we saw an immediate surge of activity in the market as consumer confidence strengthened. I expect a similar wave of buyer demand at the first indication that highly-anticipated cuts by the central bank are on the horizon.

Buyer behaviour is strongly linked to their confidence that the home they want to buy today will not be less expensive tomorrow. We expect the spring will mark that pivotal moment.”

65 per cent of sidelined buyers remain engaged in the homebuying process

Of those who plan to get back into the market when interest rates go down, 44 per cent think they will get a four or five-year fixed rate mortgage, while half the respondents (22 per cent) believe they’ll choose a variable-rate mortgage.

Despite the rate hike’s impact, 65 per cent of sidelined buyers remain engaged in the homebuying process. While some are casually browsing listings (39 per cent) or continuing to save for a down payment (19 per cent), others have applied for (12 per cent) or obtained (7 per cent) a mortgage pre-approval. However, 26 per cent have temporarily abandoned their homebuying plans.

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While the Metro Vancouver housing market ended 2023 with some resilience and balance, this was among the backdrop of decade-high borrowing costs.

“You could miss it by just looking at the year-end totals, but 2023 was a strong year for the Metro Vancouver housing market considering that mortgage rates were the highest they’ve been in over a decade,” Andrew Lis, REBGV’s director of economics and data analytics notes.

“Ultimately, the story of  2023 is one of too few homes available relative to the pool of willing and qualified buyers,” Lis says. “Sellers were reluctant to list their properties early in the year, which led to fewer sales than usual coming out of the gate. But this also led to near record-low inventory levels in the spring, which put upward pressure on prices as buyers competed for the scarce few homes available.”  

2023 sales

As reported by the Real Estate Board of Greater Vancouver (REBGV), the region saw 26,249 sales last year, which was 10.3 per cent less than 2022’s sales of 29,261 and 41.5 per cent less than 2021’s 44,884 sales. Last year’s sales were also 23.4 per cent under the 10-year annual sales average of 34,272.

2023 listings

Metro Vancouver MLS listings totalled 50,893 last year. This is 7.5 per cent less than the 55,047 properties listed in 2022 and 20.2 per cent below 2021’s 63,761 listed properties. Last year’s listings were also 10.5 per cent under the region’s 10-year total annual average of 56,868.

December sales

Residential sales in Metro Vancouver totalled 1,345 in December 2023, which is 3.2 per cent more than the 1,303 sales December 2022 and 36.4 per cent below the 10-year seasonal average of 2,114.

Benchmark price

Metro Vancouver’s benchmark price for all residential properties sits at $1,168,700, which is five per cent more than it was in December 2022 and 1.4 per cent less than in November 2023.

December listings

In December, the total number of Metro Vancouver properties listed for sale on MLS was 8,802, 13 per cent more than December 2022’s 7,791 listings and 0.3 per cent more than the 10-year seasonal average of 8,772.

There were 1,327 detached, attached and apartment properties newly listed for sale on Metro Vancouver’s MLS last month, 9.9 per cent over the 1,208 properties listed the year prior and 22.7 per cent below the 10-year seasonal average of 1,716.

Across all property types, the sales-to-active listings ratio for December was 16 per cent (11.1 per cent for detached homes, 18.7 per cent for attached homes and 19.6 per cent for apartments).

“Looking back on the year, it’s hard not to wonder how we’d be closing out 2023 if mortgage rates had been a few per cent lower than they were,” Lis notes. “And it looks like we might get some insight into that question in 2024, as bond markets and professional forecasters are projecting lower borrowing costs are likely to come, with modest rate cuts expected in the first half of the new year.” 

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