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Market Report May 2024

As Summer begins in Vancouver, the real estate landscape is experiencing a notable shift, marked by a decline in transactions on the MLS. The latest data paints a picture of evolving dynamics in the housing market, with implications for both buyers and sellers alike.

A Closer Look at the Numbers

In May 2024, residential sales in the region totaled 2,733, representing a significant 19.9% decrease from the previous year. This downward trend is echoed in comparison to the 10-year seasonal average, with last month's sales falling short by 19.6%. Andrew Lis, GVR's director of economics and data analytics, attributes this unexpected softening to a myriad of factors, ranging from increased borrowing costs to broader economic concerns and governmental policy interventions.

However, amidst this decline in transactions, the inventory of homes for sale continues to swell, with over 13,000 properties actively listed on the MLS® in Metro Vancouver. The influx of new listings in May, totaling 6,374 properties, signifies a 12.6% increase compared to the previous year and a notable uptick from the 10-year seasonal average.

Market Balance and Price Trends

Analyzing the sales-to-active listings ratio offers valuable insights into market dynamics. At 20.8% for May 2024, this ratio suggests a tilt towards more balanced conditions. Historically, when the ratio dips below 12%, downward pressure on home prices is observed, while sustained ratios above 20% tend to exert upward pressure.

With the current ratio indicating a shift towards equilibrium, Vancouverites may anticipate slower price growth in the coming months. Lis predicts that rising inventory levels and softened demand could provide opportunities for prospective buyers, even amidst elevated borrowing costs.

Price Indices and Segment Analysis

The MLS® Home Price Index (HPI) composite benchmark price for all residential properties in Metro Vancouver stands at $1,212,000, reflecting a 2.3% increase from May 2023. While this indicates continued growth, the month-on-month increase of 0.5% suggests a moderating trend.

Breaking down the data by property type, detached homes, with a benchmark price of $2,062,600, have seen a 5.9% increase from last year. Conversely, apartment homes and attached properties have experienced slight fluctuations, with benchmark prices of $776,200 and $1,145,500, respectively.

Bank of Canada lowers interest rates for the first time

The Bank of Canada has lowered its key interest rate to 4.75 %, marking the bank's first rate cut since March 2020. Homeowners with variable-rate mortgages, as well as Canadians with other kinds of debt tied to the central bank’s policy rate, will immediately see their interest rates drop by 25 basis points. You can read more here.

Looking Ahead

As we navigate through the complexities of the Vancouver housing market, it's essential to remain attuned to evolving trends and factors shaping its trajectory. The current landscape, characterized by a balance between supply and demand, presents opportunities for both buyers and sellers.

While uncertainties persist, particularly surrounding economic conditions and policy influences, the resilience of the Vancouver real estate market underscores its enduring appeal. As we transition into the summer months, prospective buyers may find a more favorable environment, albeit amidst a backdrop of shifting dynamics and cautious optimism.

In conclusion, the May 2024 housing data offers valuable insights into the evolving dynamics of the Vancouver real estate market, signaling a shift towards a more balanced landscape with implications for all stakeholders involved.

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