October 12, 2023 Greater Vancouver October 2023 Pre-Sale Pulse


October 2023 Greater Vancouver Real Estate Market Insights

Welcome to the October 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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Federal Reserve's Dot Plot: Insights into Rate Expectations This Year 

In the realm of macroeconomics for the month of September, inflation data has presented a mixed picture without significant shifts in market sentiment in either direction. Another key point of interest was the Federal Reserve's dot plot, a quarterly updated chart showcasing each central banker's official projection for the federal funds rate. The median forecast from this dot plot indicates a target projection of 5.6% by the year's end, implying that most central bankers anticipate at least one more rate hike before the year concludes. However, the dot plot suggests the possibility of two quarter-point rate cuts in 2024. The year-end projection for 2024 stands at 5.1%, up from the previous 4.6%, marking the beginning of relief on this font, albeit slower than previously expected. 

A Boom of Twelve Projects Forecasted for Vancouver's Pre-Sale Market This Fall 

Compared to the slower summer season when typically 4-6 projects were launched per month, MLA is forecasting twelve different projects, primarily concrete towers, across Metro Vancouver. These developments will include over 3,300 concrete condo units, more than 300 wood frame units, and just under 200 townhomes, to be released in phases in the coming months. This surge in activity is in line with previous years in terms of the number of units being released. However, it's worth noting that these units are entering the market in a different economic environment, characterized by historically high interest rates. Despite this, there is optimism for strong absorption rates due to latent demand, a stable labour market, and robust Canadian savings and credit levels. It's anticipated that the success of these projects will be heavily influenced by factors like efficient unit design, effective branding, pricing strategies, and overall product positioning. 

Buyer's Advantage: Signs of Transition in Greater Vancouver's Resale Market 

In the Greater Vancouver resale market, the summer slowdown has continued through into Fall with a notable decline in sales activity. Sales for the month totalled 1,926, representing a significant decrease of 16.1% compared to the previous month. This decline can be attributed to the increase in interest rates that occurred in July and the anticipation of another potential rate hike by the end of the year. However, it's worth noting that year-over-year, sales are still up by 13.2%. Additionally, the increase in both overall and new listings for September, totalling over 11,000 listings, reflects a 38% and 13% increase, respectively, from the previous month. This surge in listings has led to a drop in the sales-to-listings ratio, potentially signalling a shift toward a more balanced market that could be favourable for buyers. Benchmark pricing has remained relatively stable, with a 0.4% decrease from August but still showing a 4.4% increase compared to the same time last year. The market seems to be in a state of anticipation, with uncertainty surrounding future interest rate hikes and economic reactions. As a result, the next few months will be crucial in determining whether the market transitions further towards a buyer's market.

Pre-sale Projects mentioned in this episode:

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