Vancouver, Canada Housing Market Trends for 2023
Vancouver is one of the largest and most expensive housing markets in Canada. This blog post will explore the current state of the Vancouver housing market and what it means for both buyers and sellers. The average home price in Greater Vancouver was $1,267,057 in March 2023, representing a 5.3% annual decrease and a 3.8% monthly increase. The benchmark price of homes in Metro Vancouver was $1,143,900 in March 2023, which is a 1.8% monthly increase and a 9.5% yearly decrease. These figures suggest that the housing market is in a state of recovery after several years of decline.
However, it is important to note that the benchmark price is still 9.6% lower than the all-time high of $1,264,700 in April 2022. Additionally, the prices of detached homes, townhouses, and condo apartments have all decreased year-over-year by 11.2%, 7.8%, and 4.6%, respectively. This means that buyers may have an opportunity to purchase a home in Vancouver at a lower price than in previous years.
In March 2023, 2,535 Vancouver properties were sold, including 734 detached homes, 1,311 apartments, and 466 attached homes. These numbers are 43% lower year-over-year, which may indicate a cooling of the housing market.
At the end of March 2023, there were 8,617 active listings in Metro Vancouver, an 8.1% increase compared to last year, but still significantly below the long-term average for this time of the year. The number of active listings increased by 9.5% compared to 7,868 listings at the end of February 2022. The number of new listings in March 2023 was 4,317, which is a 36% decrease year-over-year, but a 25% increase compared to February 2022. The low number of new listings is a worrying sign for buyers who are looking to enter the market, as it suggests a lack of available inventory.
The sales-to-active listings ratio for Vancouver was 29% in March 2023, indicating a buyer's market. This means that buyers have more choices and bargaining power than sellers, who may need to lower their prices to attract buyers. Additionally, the decrease in sales may lead to a decline in housing prices, which could benefit buyers in the long run.
In terms of inflation, over the past eight months, the aggregate consumer price index has risen at an annualized rate of 1.6%. Those who are bullish on the housing market point to this slow rise in the overall price level and predict that the Bank of Canada (BoC) will start cutting rates soon. However, those who are bearish on the housing market point out that goods prices are highly affected by volatile commodity prices, especially oil prices. Thus, deflation in goods is likely to change to inflation over the coming months, making it less likely for the BoC to cut rates in 2023.
In conclusion, the Vancouver housing market is currently in a state of recovery, but there are several signs that suggest a cooling of the market. The decrease in housing prices and the low number of new listings may indicate a buyer's market, which could benefit buyers in the long run. However, sellers may need to lower their prices to attract buyers, and it is important for buyers to act quickly when they find a home they like because of the low inventory. Overall, it is important for buyers and sellers to stay informed about the state of the Vancouver housing market to make informed decisions.
Metro Vancouver Market Forecast for 2023
The Metro Vancouver housing market has been a topic of discussion for many years due to its affordability challenges. In this section, we will explore the current state of the Metro Vancouver housing market and provide a forecast for the next twelve months.
Residential Property Sales:
According to data released by the Real Estate Board of Greater Vancouver (REBGV), residential home sales in the Metro Vancouver region totaled 2,535 in March 2023. This represents a 42.5% decrease from the 4,405 sales recorded in March 2022 and 28.4% below the 10-year seasonal average. Despite elevated borrowing costs, home sales are making a stronger-than-expected spring showing so far.
Home Prices:
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,143,900. This represents a 9.5% decrease over March 2022 and a 1.8% increase compared to February 2023. The surprising part of this recent activity is that these price increases are occurring against a backdrop of below-average sales and new listing activity that continues to suggest that sellers are awaiting more favorable market conditions.
New Listings:
There were 4,317 detached, attached, and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2023. This represents a 35.5% decrease compared to the 6,690 homes listed in March 2022 and was 22.3% below the 10-year seasonal average. The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,617, an 8.1% increase compared to March 2022 and 17.3% below the 10-year seasonal average.
Sales-to-Active Listings Ratio:
Across all detached, attached, and apartment property types, the sales-to-active listings ratio for March 2023 is 30.7%. By property type, the ratio is 23.3% for detached homes, 36.7% for townhomes, and 34.9% for apartments. Analysis of historical data suggests that downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
Forecast:
Based on the data released by the Real Estate Board of Greater Vancouver (REBGV), the Metro Vancouver housing market is expected to continue its upward trend in the coming months. Despite elevated borrowing costs and below-average sales, the market has seen modest price increases, and the spring market is on track to outpace the 2023 forecast of one to two percent price increases. However, the market remains sensitive to changes in supply and demand, and the number of homes coming on the market will likely continue to impact sales figures. Overall, the outlook for the Metro Vancouver housing market for the next twelve months is cautiously optimistic, with expected increases in home prices and sales.
Sources:
- https://wowa.ca/vancouver-housing-market
- https://www.rebgv.org/market-watch/monthly-market-report/march-2023.html
