With all of the furor surrounding the Bank of Canada’s first interest rate decrease, many industry professionals (myself included) anticipated a return of buyer confidence to the housing market, resulting in a return to rapid sales, increasing sales prices and a lack of inventory. Well…that hasn’t yet been the case…
Instead, it appears that Sellers who have waited for a rate decrease acted upon the anticipated buyer confidence and brought their homes to market but the Buyers have not yet fully jumped off the fence. This has resulted in inventory levels climbing to a point not seen since 2019 and a rate of sales falling sharply since the same point one year ago. For the Greater Vancouver market, there were 2418 sales in June which was a 19.1% decrease from June 2023. There are currently 14,182 properties listed for sale on the MLS in Metro Vancouver which is a 42% jump from June 2023 which only had 9,990 properties listed at that time.
NOTE: This does not mean that prices have yet followed suit. Andrew Lis*, the GVR’s director of economics and data analytics goes a bit deeper and explains that “June’s lower-than normal transaction volumes suggest many buyers remain hesitant, which has allowed inventory to accumulate and has kept a lid on upward price pressure across market segments. With that said, the transaction-level data do show that well-priced properties are still selling quickly, suggesting astute buyers are able to spot value and act when opportunities arise.” Essentially, there are certain segments of Buyers who are seeing the deals that are out there and scooping them up – likely anticipating further rate decreases and taking advantage of what may be “the calm before the storm”. Well priced and well presented properties are still selling and selling well. These deals are often priced for the product/condition of the properties and when a property is primed to sell quickly, it typically will sell for closer to the asking price – demand dictates that. However, it is a competitive market for Sellers and those under a timeline must be cognizant of that.
With mixed opinions from industry insiders as to a further BOC rate decrease at July’s meeting it will be interesting to see how our market weathers the remainder of the summer market. Many pundits do feel that if there is not a rate cut in July, there will be one in September. The questions become, will the market take off again…and if so, when?
*Quote from GVR’s News Release “Market Shifting in buyer’s favour, though hesitation remains” dated July 3, 2024.