In the dynamic real estate landscape of Metro Vancouver, the month of July 2023 witnessed yet another upswing in home prices across all types of properties, fuelled by a robust sales surge. This ongoing trend of price escalation is being driven by a formidable combination of vigorous sales figures and a persistently low housing inventory within the region.
According to the latest data from the Real Estate Board of Greater Vancouver (REBGV), the total number of residential home sales in the area reached an impressive 2,455 in July 2023. This marked a substantial increase of 28.9 percent compared to the 1,904 sales recorded during the same period in 2022. It’s noteworthy that these figures remained about 15.6 percent below the ten-year seasonal average of 2,909 sales.
Andrew Lis, the director of economics and data analytics at REBGV, emphasized the significance of the year-over-year sales increase, even if it still lags behind the ten-year average. He explained that this substantial improvement is partly attributed to the market’s response to the previous year’s scenario when the Bank of Canada took many by surprise with a sizeable one percent increase in the policy rate. This move had momentarily chilled the market activity by catching both buyers and sellers off guard.
The supply side of the equation also saw notable developments. In July 2023, there were 4,649 detached, attached, and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver. This figure marked a significant 17 percent increase compared to the 3,975 homes listed in July 2022, although it still remained 5.2 percent below the 10-year seasonal average of 4,902 listings.
Presently, the total number of homes listed for sale on the MLS® system in Metro Vancouver stands at 10,301, reflecting a four percent decrease when contrasted with the figures from July 2022 (10,734). Moreover, this number was about 14.4 percent lower than the ten-year seasonal average of 12,039 listings.
An insightful metric for evaluating the balance between supply and demand is the sales-to-active listings ratio. For July 2023, this ratio stood at 24.9 percent when considering all property types combined. However, when analyzed by property type, the ratios were 16.5 percent for detached homes, 32 percent for townhomes, and 30.6 percent for apartments. Historical analysis suggests that home prices typically experience downward pressure when the ratio remains below 12 percent consistently. Conversely, when the ratio surpasses 20 percent over several months, it tends to exert upward pressure on home prices.
One intriguing aspect of the current market environment is the contrast between the Bank of Canada’s modest rate hike of a quarter of a percent in July and the highest mortgage rates witnessed in Canada in over a decade. Despite this, sales activity managed to outpace last year’s levels, indicating not only the robust demand in the market but also buyers’ ability to adapt and qualify for higher borrowing costs.
In terms of specific property types, the MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver reached $1,210,700. This signifies a marginal 0.5 percent increase over July 2022 and a similarly modest 0.6 percent increase when compared to June 2023.
Delving deeper, the sales of detached homes in July 2023 numbered 681, an impressive 28.7 percent upswing from the 529 detached sales recorded in July 2022. The benchmark price for a detached home reached $2,012,900, reflecting a 0.6 percent increase from the previous year and a 1.1 percent rise compared to June 2023.
Similarly, apartment home sales witnessed a significant surge, totaling 1,281 in July 2023. This marked a substantial 20.7 percent increase when compared to the 1,061 sales of July 2022. The benchmark price for an apartment home climbed to $771,600, demonstrating a noteworthy 2.6 percent increase from the previous year and a 0.6 percent uptick from June 2023.
Attached homes, too, experienced a notable upswing in sales, with July 2023 witnessing 466 sales compared to 304 in July 2022. This surge of 53.3 percent is substantial and contributed to the benchmark price for an attached home reaching $1,104,600. This marks a 1.2 percent increase from July 2022 and a 0.5 percent rise compared to June 2023.
All in all, the real estate landscape in Metro Vancouver continues to be shaped by a dynamic interplay of strong sales activity, constrained inventory levels, and the ability of buyers to adapt to changing market conditions, including higher borrowing costs. While the ten-year average remains a reference point, the current market’s resilience underscores the enduring demand for housing in the region, driving incremental increases in property prices across various segments.