November 2023 Greater Vancouver Real Estate Market Insights
Welcome to the November 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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Factors Behind The Bank of Canada's Rate Pause
In October, the Greater Vancouver macroeconomic landscape saw significant shifts influenced by recent developments in the Bank of Canada's policy meetings. The announcement of another rate pause last month has tempered expectations for further hikes by year-end, with only one more meeting planned this year. Contrary to initial predictions of a rate increase, the decision is informed by recent economic data, particularly the household savings rate. The rate, historically elevated since the onset of the pandemic and peaking at 27%, has averaged 5.5% over the past year and a half. This shows that Canadians tapping into savings to navigate inflation and increased costs amidst the heightened interest rate environment. Considering the slowdown in savings, reduced overall spending, and the uptick in consumer debt, the Bank of Canada's decision to maintain rates seems prudent. The current economic scenario hints at a potential surge in housing market demand as financially secure individuals may strategically deploy their saved capital. Looking forward, these macroeconomic indicators suggest that interest rate hikes are permeating the economy, indicating a probable pause for the remainder of the year and potential cuts in mid-2024.
Strategic Advantages Of Early Presale Campaign Launches
Despite a decrease in demand for active programs, developers launched an impressive 20 projects that brought over 3,500 units to the market in October, marking the largest release of inventory seen this year. The influx was primarily centred in Metrotown with developments like Solhouse, Riviera, and Reign initiating contract writing. Like developers, presale purchasers are focusing on long-term opportunities, especially in burgeoning urban centres such as Burnaby and West Coquitlam. These locations offer central proximity and daily conveniences at today's costs, with projects set to be completed in 4-6 years, promising strong appreciation potential. While overall demand dropped, there were bright spots, exemplified by Lodana's success in achieving over 50% sold in its first release. October saw a 27% absorption rate, slightly below the preferred 30%. However, the market outlook remains solid, with forecasts predicting 9 upcoming projects and 1,463 units in November. With interest rates expected to drop in 2024, developers may find strategic advantages in launching campaigns early, as they can gain insights and establish trust with potential buyers in a dynamic market. This approach positions developers for success both in the current market conditions and the anticipated shifts with rate changes.
Marginal Rise and Shifting Dynamics in Greater Vancouver Resale
The Greater Vancouver resale market experienced a marginal increase in sales activity in October with 1,996 sales, up 3.6% from the previous month and 3.7% from the same period last year. Despite this short-term uptick, the market remains 29.5% below the 10-year seasonal average for October, indicating an overall sluggishness. On the seller side, there's a notable shift, with 11,600 total active listings marking a 1.9% increase from the previous month and a significant 12.6% increase from last October. While a 0.6% overall increase in listings might seem modest, the 15.4% rise in newly listed homes compared to last October is significant. This surge in listings, coupled with a sales-to-listings ratio of 17.9%, suggests a balanced market. The townhome and condominium segments are on the edge between a balanced market and a seller's market, but a continued increase in inventory coupled with decreased sales could tip the scale for these property types. Despite these shifts, benchmark prices for condominiums and townhomes increased by 0.2% from the previous month, with condominium benchmark pricing approaching May 2022 peak levels, demonstrating resilience in the face of changing market dynamics. Overall, the month of October reflects a market in transition, with increased listings, a balanced market, and stable benchmark prices that are now less than 5% away from peak levels.
Presale Projects mentioned in this episode:
- Lodana - The Circadian Group
- Solhouse 6035 - Bosa Properties
- Rivieria - Ledingham McCallister
- Reign - Wesgroup Properties
- SkyLiving - Allure
- Greenhouse - Concord Pacific
- Guildford the Greatest - Dawson + Sawyer
- Talistar - Polygon
- Ardea - Wesgroup
- York - Listraor
Links mentioned in this episode:
- November 2023 Presale Pulse Report
- MLA Advisory Services and Sample Reports
- Contact Advisory
- Subscribe to MLA Newswire