December 20, 2023 Greater Vancouver December 2023 Presale Pulse

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December 2023 Greater Vancouver Real Estate Market Insights

Welcome to the December 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, presale, 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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Shifting Tides in the Greater Vancouver Real Estate Market 

The macro snapshot for the month revealed a distinct contrast from the beginning of the year. Q1 saw a GDP growth rate of 3.1%, well above the long-term average. However, the most recent quarter of 2023 saw a contraction of 1.06%, signifying a shift towards a cooling economy and away from the unsustainable levels we saw at the start of the year. Unemployment, which stood at a record low of 5.0% in early 2023, has now risen to 5.8% over the past five months. These macroeconomic indicators collectively point to a changing landscape, with GDP shrinking and the market adjusting. The focus has shifted from concerns about rate hikes to anticipation of rate cuts and reduced uncertainty. Despite headwinds in 2024, the impact of rate hikes is gradually working through the economy, providing a clearer path for both buyers and developers to make more confident decisions. The evolving macroeconomic scenario suggests a different market trajectory compared to the previous year, setting the stage for further adjustments in the real estate landscape.

December's Prospects and Anticipated Uptick in 2024 for Greater Vancouver's Presale Market 

The Greater Vancouver presale market experienced a notable slowdown in November, reflecting the onset of the holiday season. Buyers appeared fatigued and overwhelmed, possibly due to the abundance of choices and the extensive inventory drop in October. Project launches decreased by half compared to the previous month, with nine launches totalling just over 1,400 units and 700 units released to the market. The majority of projects introduced were of wood frame construction in the Fraser Valley. The shift in focus from concrete products in urban areas, observed in October, indicated a calmer market setting. Emphasizing the trade-offs for projects launching before the year-end, the success of projects like SkyLiving was highlighted, which strategically released inventory and experienced robust sales. The importance of experienced sales teams with established databases and community connections was crucial for capitalizing on committed and serious buyers during the quieter months. Looking ahead, the forecast for December predicts four presale projects with over 1,100 units, including major launches like Walnut Park in Langley and Town & Centre in Coquitlam. The limited project count aligns with expectations for the time of year and speculation about potential interest rate drops in the new year. Despite the slowdown, there's an anticipation of an uptick in activity in early 2024, driven by new launches and enticing Lunar New Year incentives

Buyer's Market Emerges in Greater Vancouver Resale Market 

The Greater Vancouver resale market experienced a notable dip in sales activity, totalling 1,702 sales, reflecting a 14.7% decrease from the previous month but a 4.7% increase from the same period last year. The market momentum slowdown observed in October continued into November, with sales falling 33% below the 10-year seasonal average, indicating around 840 fewer transactions. The number of active listings remained high, reaching 10,931, with a 3.7% increase above the 10-year average for November. Although month-to-month active listings decreased by 5.8%, they increased by 13.5% year-over-year. Newly listed properties rose by 9.8% compared to last year but fell 2.8% below the 10-year seasonal average, typical during the holiday season. The market maintained a balanced status, with a sales-to-active listings ratio of 16.3%, giving buyers more influence. Across property types, detached homes had a ratio of 12.7%, while attached homes and apartments stood at 19.8% and 18.2%, respectively. This market shift has provided buyers with an upper hand, and the sales-to-listing ratios across all product types haven't been this low since 2019. Consequently, the HPI Benchmark pricing remained steady, experiencing a 1% decrease month-over-month and a 4.9% increase year-over-year, with the benchmark price at $1,185,100.

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