Real Estate Matters – January 2023
Hello!
Happy New Year! A slightly delayed market update video this month due to us wanting to see what the momentum was to start the year after the holidays. Market is actually surprisingly busy for January. Despite the rate hikes and lower number of eligible Buyers, we are seeing some (not as much as before of course) multiple offer situations again due to the LACK OF SUPPLY.
As we always mentioned, Vancouver is a “fair market value” city. The word “fair” is open to interpretation, but what we mean is that the Supply and Demand shifts according to the environment – rate hikes, new legislations, additional taxes, etc. – due to the root cause of SUPPLY.
We think we are reaching a bottom here in regards to the Vancouver Real Estate Market trend. We are expecting 1 more rate hike on January 25th, 2023, but after that, we should see rates start to come down gradually which would in turn release the pent up Buyer and Seller pressure.
VANCOUVER, BC – January 4, 2023 – After seeing record sales and prices during the pandemic, Metro Vancouver’s* housing market experienced a year of caution in 2022 due to rising borrowing costs fueled by the Bank of Canada’s ongoing battle with inflation.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 28,903 in 2022, a 34.3 per cent decrease from the 43,999 sales recorded in 2021, and a 6.6 per cent decrease from the 30,944 homes sold in 2020. Last year’s sales total was 13.4 per cent below the 10-year sales average.
“The headline story in our market in 2022 was all about inflation and the Bank of Canada’s efforts to bring inflation back to target by rapidly raising the policy rate. This is a story we expect to continue to make headlines into 2023, as inflationary pressures remain persistent across Canada,” Andrew Lis, REBGV’s director, economics and data analytics said.
“Closing out 2022, the data show that the Bank of Canada’s decisions to increase the policy rate at seven of the eight interest rate announcement dates in 2022 has translated into downward pressure on home sale activity and, to a lesser extent, home prices in Metro Vancouver,” Lis said. “While the consensus among many economists and forecasters suggests the Bank of Canada may be near the end of this tightening cycle, rates may remain elevated for longer than previously expected since the latest inflation figures aren’t showing signs of abating quickly. We’ll watch the 2023 spring market closely to see if buyers and sellers have adjusted to the higher borrowing-costs and are participating more actively in the market than we have seen over the last 12 months.”
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