January 2024 Greater Vancouver Real Estate Market Insights
Welcome to the January 2024 episode of the Presale Pulse, a real estate show brought to you by hosts Suzana Goncalves and Brittany Reimer. 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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Modest Growth and Changing Expectations in the Greater Vancouver Real Estate Market
Greater Vancouver's macroeconomic landscape in December was characterized by a blend of stabilization and anticipation. The Canadian economy, emerging from a period of cooling, exhibited signs of modest recovery. The GDP growth for the fourth quarter of 2023 was approximately 0.8%, a rate that, while modest compared to historical averages, marked an improvement from the 1.1% contraction in the third quarter. This scenario hinted at a potential shift in monetary policy, with analysts forecasting 3-4 interest rate cuts throughout 2024. The prior belief that interest rates would remain "higher for longer" was replaced by a consensus anticipating quicker rate reductions. However, given the current geopolitical climate and its inherent uncertainties, there was an undercurrent of caution. The narrative around interest rates and economic recovery remained fluid, necessitating agility and preparedness for a range of outcomes in the market. This period was seen as pivotal for the Bank of Canada, as it balanced between responding to economic indicators and managing market expectations.
December's Presale Market Performance Sets the Stage For 2024
Last month, Greater Vancouver's presale market experienced an anticipated seasonal slowdown, with three projects braving the holiday season to launch, releasing a total of 1,118 units. This was a decrease from the previous December, which saw five projects releasing just over 300 units. Notably, the recent launches comprised two concrete and one wood frame development, reflecting a trend observed throughout 2023. Buyers exhibited a preference for concrete properties with longer completion timelines, leveraging the current peak in borrowing rates. Of the 577 units released last month, 57% were absorbed, indicating a successful market response. Looking ahead, the forecast for January predicts three presale projects bringing over 780 units to the market, including two concrete and one wood frame development. The positive absorption rates and the anticipation of Lunar New Year suggest that momentum is building, with optimism prevailing as developers eye the spring market for potential launches. The market is cautiously optimistic, watching for any impact from programs hinting at aggressive pricing.
Challenges and Resilience In Greater Vancouver's Resale Market
The Greater Vancouver resale market experienced a typical year-end slowdown in December, witnessing the sale of 1,345 properties—a 21% decline from the previous month yet a modest 3.2% increase from the same period last year. These figures notably lagged behind the 10-year seasonal average by approximately 36%. Throughout 2023, the total sales of 26,249 homes marked a 10% drop from the previous year and nearly 25% below the 10-year average, showcasing the market's resilience amid challenges such as escalating borrowing costs. Despite this, Metro Vancouver retained its allure as a sought-after living destination. December also saw an inventory reduction, with active listings decreasing by 19.5% from the previous month, totalling 8,802 by the year's end, closely aligning with the 10-year average but falling nearly 23% below the December average. The market grappled with low inventory levels throughout the year, and with potential interest rate cuts in early 2024, demand is expected to rise, possibly outpacing supply. The sales-to-active listings ratio in December stood at 16%, with detached homes entering a buyer's market and attached homes and apartments leaning toward a seller's market. Despite a 1.4% month-over-month decrease in the Home Price Index (HPI), the 5% year-over-year increase indicates the market's enduring appeal, offering the potential for rejuvenation with anticipated interest rate cuts.
Presale Projects mentioned in this episode:
Links mentioned in this episode:
- January 2024 Presale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire