Hiigher borrowing costs have begun to permeate the Metro Vancouver housing market in predictable ways, according to the August 2023 housing market report from the Real Estate Board of Greater Vancouver (REBGV).
August 2023 saw residential home sales totalling 2,296, marking a 21.4 per cent increase from the same period in 2022 but 13.8 per cent below the 10-year seasonal average, signalling a notable slowdown.
The board is calling it an expected shift in market dynamics, with a cooldown in price gains and sales following the typical seasonal pattern.
“It’s been an interesting spring and summer market, to say the least,” says Andrew Lis, REBGV’s director of economics and data analytics. “Borrowing costs are fluctuating around the highest levels we’ve seen in over ten years, yet Metro Vancouver’s housing market bucked many pundits’ predictions of a major slowdown, instead posting relatively strong sales numbers and year-to-date price gains north of eight per cent, regardless of home type.”
Inventory on the rise
Last month saw a surge in new property listings, with 3,943 detached, attached, and apartment properties hitting the market. This marked an 18.1% increase year-over-year. However, this number also falls short of the 10-year seasonal average by 5.3 per cent.
The total number of homes currently listed for sale on MLS in Metro Vancouver slightly decreased to 10,082, down 0.2 per cent compared to August 2022 and 13.4 per cent below the 10-year seasonal average of.
The sales-to-active listings ratio for August 2023 stands at 23.9 per cent across all property types, with detached homes at 14.2 per cent, townhomes at 30.3 per cent, and apartments at 31.9 per cent.
As REBGV notes every month, analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when they surpass 20 per cent over several months.
Summer’s tale: Sales catch up with price gains
Lis characterized the year as a “tortoise and hare story,” with a slow start to sales while prices surged due to low inventory levels. As fall approaches, sales have caught up with price gains, but both metrics are now following historical seasonal patterns, and “with what one might expect given that borrowing costs are where they are.”
The MLS HPI composite benchmark price for all residential properties in Metro Vancouver currently stands just under $1.21 million. This represents a 2.5 per cent increase over August 2022 and a marginal 0.2 per cent decrease compared to July 2023.
Detached homes see modest gains
Sales of detached homes in August 2023 reached 591, marking a 13.2 per cent increase year-over-year. The benchmark price for a detached home now stands near $2.02 million, reflecting a 3.3 per cent increase from August 2022 and a slight 0.3 per cent uptick month-over-month.
Apartments remain in demand
Apartment home sales jumped 27.4 per cent year-over-year, with 1,270 sales. The benchmark price for an apartment home stands at $770,000, reflecting a 4.4 per cent increase from August 2022, and a minor 0.2 per cent decrease compared to July 2023.
Attached homes gain momentum
The attached home segment also witnessed a surge in sales, totalling 422 in August 2023, marking an 18.9 per cent increase compared to the same period last year. The benchmark price for an attached home stands at more than $1.1 million, indicating a 3.9 per cent increase from August 2022, with a negligible 0.1 per cent decrease compared to July 2023.