Real Estate Matters – January 2024
Hello!
Market has been hot again the first half of 2023. But are we going back to the traditional pre-COVID trend of s summer slowdown?
Statistics across the board is showing a deceleration of the increase in prices. It’s still going up, but at a much less rapid rate than the last few months. With the recent increase in interest rates (again!) of 25 basis points, we Happy New Year! I hope you and your loved ones had an amazing Holiday season.
As we kick off the new year, we may be seeing a very different market than the last 6 months.
In the last year, all media and even the Real Estate Boards said the market had grown incrementally despite the rate hikes. Whilst the growth (of approximately 5% across the board) is true, it is very important to put some context behind it. As you can see by the statistics attached at the bottom of this email, most of the price increases had taken place in the first half of 2023. Whereas the latter half of the year we saw a steady decline. Yes, overall in 2023 the prices went up slightly, which does prove the resiliency of our Real Estate Market. However, the rate increases did finally start to impact overall prices. Buyers were shopping with much less urgency, and in turn Sellers became more motivated.
As I’ve informed you over the last 2 months, Bank of Canada will be cutting rates this year, and the mortgage rates are already dipping down as we speak. First Bank of Canada rate announcement this year will be on January 24th, and it will be interesting to see if that is when the first rate cut is going to occur. If not, the next announcement date on March 6th will definitely be the time.
If you’re looking to make a move, either Buy or Sell, I and my team of experts are always able to navigate this complex market with you. This is our expertise, and our experience is proven. Please do reach out to us for a free consultation and we’d be happy to make a plan with you to ensure your assets are well protected.
In this month’s “Real Estate Matters” video, we discuss the points above, and how to take advantage of a volatile market. As usual, if I may be of service, I would be happy to chat! Just reply to this email and we can set up a time to do so!
From the Real Estate Board of Greater Vancouver Monthly Statistics letter:
VANCOUVER, BC – January 3, 2024 – Metro Vancouver’s1 housing market closed out 2023 with balanced market conditions, but the year-end totals mask a story of surprising resilience in the face of the highest borrowing costs seen in over a decade.
“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 said. “In our 2023 forecast, we called for modest price increases throughout the year while most other forecasters were predicting price declines. The fact that we ended the year with five-per-cent plus gains in home prices across all market segments demonstrates that Metro Vancouver remains an attractive and desirable destination, and elevated borrowing costs alone aren’t enough to dissuade buyers determined to get into this market.”
“Ultimately, the story of 2023 is one of too few homes available relative to the pool of willing and qualified buyers,” Lis said. “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.”
“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. 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.”are expecting the summer months to be a little more balanced.
In this month’s “Real Estate Matters” video, we discuss all the points above. As usual, if I may be of service, I would be happy to chat! Just reply to this email and we can set up a time to do so!
From the Real Estate Board of Greater Vancouver Monthly Statistics letter:
VANCOUVER, BC – July 5, 2023 – Continuing the trend that has emerged in the housing market this year, the benchmark price for all home types in Metro Vancouver1 increased in June as home buyer demand butted up against a limited inventory of homes for sale in the region.
“The market continues to outperform expectations across all segments, but the apartment segment showed the most relative strength in June,” Andrew Lis, REBGV’s director of economics and data analytics said. “The benchmark price of apartment homes is almost cresting the peak reached in 2022, while sales of apartments are now above the region’s ten-year seasonal average. This uniquely positions the apartment segment relative to the attached and detached segments where sales remained below the ten-year seasonal averages.”
“Despite elevated borrowing costs, there continues to be too little resale inventory available relative to the pool of buyers in Metro Vancouver. This is the fundamental reason we continue to see prices increase month over month across all segments,” Lis said. “With the benchmark price for apartments now standing at $767,000, we repeat our call to the provincial government to adjust the $525,000 threshold exempting first-time home buyers from the Property Transfer Tax to better reflect the price of entry-level homes in our region. This is a simple policy adjustment that could help more first-time buyers afford a home right now.”
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