July 4, 2024 Inventory Surge and Cautious Buyers Define June Resale Market

The resale markets across Greater Vancouver, Fraser Valley and Victoria experienced notable shifts in June as interest rate cuts failed to significantly boost buyer activity. Despite a 25-basis point rate reduction, sales volumes decreased and inventory levels surged, reflecting cautious buyer sentiment. Market conditions have transitioned to a more balanced state, with overall sales-to-listings ratios stabilizing. While benchmark prices showed slight declines, they remain close to their peak levels from recent years.

Interest Rates decrease, but so too does sales volume 

In Greater Vancouver, the slowdown in sales continued into the month of June. The region recorded a total of 2,418 resales, representing a 23.6% decrease compared to the 10-year seasonal average.    Although the number of new listings for the month has remained relatively in line with the 10-year seasonal average, demand has not kept pace, leading to an unusually high inventory level. Currently, there are over 14,100 active listings, a figure not seen since spring 2019. This represents a 42.0% year-over-year growth and a 20.3% increase above the 10-year seasonal average. Even with a 25-basis point interest rate cut in June, buyers remain cautious. It is anticipated that multiple additional rate reductions will be necessary to restore consumer confidence and stimulate demand growth.   

As inventory levels continue to rise and demand remains subdued, the market has transitioned to balanced conditions. The overall sales-to-listings ratio for all property types stands at 17.6%, with slightly higher ratios for townhomes and condominiums at 21.1% and 20.3%, respectively. Although slower to react, benchmark prices are starting to reflect the softening market conditions. For June, the benchmark price for all property types is $1,207,100, marking a 0.4% decline compared to May 2024. Despite this decrease, benchmark prices remain only 4.1% below the peak prices observed in April 2022.    

Further Cuts Needed: Buyers remain on sidelines 

In June, the Fraser Valley real estate market maintained its cool state, despite the much-anticipated rate cut. The market recorded just over 1,300 transactions—a 13% decrease from the previous month and over 30% below both last year's figures and the 10-year average. Inventory continued to climb for the sixth consecutive month, reaching 8,350 active listings, the highest in five years.  

Market conditions remained balanced with a sales-to-active listings ratio of approximately 16%. As we have seen for much of 2024, benchmark pricing showed relative resilience despite softening conditions. The benchmark price for a home in the Fraser Valley in June was $1,001,700 – declining 0.5% from the previous month, and 3.2% year-over-year. Overall, however, values are down further from their previous peak in May 2022 – about 16% - relative to the Greater Vancouver market which has seen a more substantial recovery.  

Victoria market sees cool activity amidst warmer weather 

In June, the Victoria real estate market recorded 661 property sales, marking a 13.4% drop from the previous month and a 6.2% dip from the previous year. Condominium sales were particularly sluggish, down 16.5% to 202 units, while single-family homes saw a 6.2% increase with 342 sales. While slower activity as we transition into the summer market is expected, overall sales volume is below long-term historical averages. 

In contrast to the Metro Vancouver markets, condominium values in the Victoria market remain up year-over-year.  In June, the benchmark price for a condominium in the Victoria Core was $567,900, decreasing 0.3% from May but appreciating 0.2% year-over-year. As we move further into the summer season, we expect current trends to continue to build and the market to remain cool.