May 2023 Greater Vancouver Real Estate Market Insights
Welcome to the May 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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Financial Volatility and Market Uncertainty in the Wake of Silicon Valley Bank Collapse
The recent collapse of First Republic, the second largest bank failure in the US, has raised concerns about the overall banking system. This comes just a month after the largest bank failure in US history involving the Silicon Valley Bank. The US Federal Reserve, however, remains undeterred and has raised the overnight target rate for the 10th consecutive time, reaching 5.00% - 5.25%. While Canadian rate hikes have paused for now, it is still important to monitor the situation in the US, as further rate hikes may strain the Canadian economy. Analysts are divided due to contradictory trends in inflation, economic growth, labour, and the real estate market. The housing market in BC is heavily influenced by these opposing forces, making it difficult to predict future outcomes.
Developer Confidence Grows as Presale Market Trends Upwards
Due to limited supply and rising values, there was a shift in the developer community this past month towards launching projects - making May a month to look out for. In total, pre-sale sales momentum increased with 33% same-month absorptions. May expects seven major launches and the largest inventory release this year: 1,400 homes. The City of Lougheed Tower 3 is a new project release that has been under construction since 2019. The tower is selling complete products, which can be appealing despite interest rates, given inventory shortage and rising prices. Demand in the market continues to rise, boosting confidence for more projects in the fall to address supply needs.
Sales Momentum Builds in Metro Vancouver's Resale Market
Sales in the Metro Vancouver resale market in April increased by 8%, signalling a positive shift after a decline in sales activity in the past two years. Multiple offers and bidding from buyers are creating momentum and driving up values. As demand starts to rise, more sellers are motivated to enter the market. Benchmark pricing has risen by 2.4% month-over-month and 5.3% since the beginning of the year. The market is still below the 10-year average, but sales momentum is increasing in May, driven by a competitive marketplace and buyer response to both local and macro factors.
Pre-sale Projects mentioned in this episode:
- Curv - Brivia Group and Henson Group
- City of Lougheed Tower 3 - Shape Properties
Links mentioned in this episode:
- May 2023 Pre-Sale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire
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