August 2023 Greater Vancouver Real Estate Market Insights
Welcome to the August 2023 episode of the Presale Pulse, a real estate show brought to you by hosts Ryan Lalonde and Suzana Goncalves. Watch the video to understand the latest macroeconomics, pre-sale, and resale trends over the last 30 days affecting the local real estate market across Metro Vancouver and the Fraser Valley.
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Navigating Turbulence: Metro Vancouver Real Estate's Soft Landing in July
After much apprehension, indicators emerged suggesting that the market might navigate the current economic challenges more favourably than initially feared. Recent data showed a meaningful slowdown in inflation while the economy managed to avoid a major crisis. This trend offered hope that the Bank of Canada might reconsider future rate increases. However, there are a few caveats to keep in mind. While a soft landing is desirable, it still implies a certain level of inevitable economic strain. Unemployment continued to rise, with notable job losses in sectors like construction, reflecting the impact of high inflation. However, the real estate market appeared to be steering clear of distressed selling, and mortgage delinquencies declined, suggesting that the market is on track to weather the challenges.
A Seasonal Slowdown in the Metro Vancouver Pre-sale Market
In July, the Metro Vancouver pre-sale market experienced a typical seasonal slowdown in both sales and launch activity, aligning with historical trends for this time of year. The past month saw a total of 5 launches introducing 326 units to the market. Same-month absorptions were at 33%, a relatively modest figure but within expectations for the season. As the market enters Fall, supply conditions remain tight, allowing programs that released inventory or launched in the Spring to achieve sales that support construction financing benchmarks. Looking forward, uncertainties linger regarding the performance of the labour market and the potential for another rate hike by the Bank of Canada in September. Overall, the market is expected to maintain its tight conditions, driven by housing demand due to strong immigration figures, particularly in key markets across British Columbia.
A Robust Resale Market Shows Strong Transactions Despite Rate Hikes
Despite experiencing a 17.8% decrease in sales compared to the previous month, the Metro Vancouver resale market closed the month with a substantial 2,455 transactions, marking a noteworthy 28.9% increase compared to the same period last year. This outcome is particularly striking given that interest rates have doubled since the prior year, suggesting the resilience of demand and buyers' ability to adapt to higher borrowing costs. Composite benchmark pricing also saw an increase, rising by 0.6% from June and 0.5% from last year. Active listings in July rose by 3% from the previous month, totalling 10,301 listings, yet still remaining 14% below the 10-year seasonal average. Given the persistently strong demand and relatively limited supply, it's expected that benchmark prices will likely continue to rise, especially as more buyers come to terms with the reality of higher interest rates becoming a long-term feature of the market.
Pre-sale Projects mentioned in this episode:
Links mentioned in this episode:
- August 2023 Pre-Sale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire