As we move through 2024, several key trends and expectations for the Vancouver real estate market are emerging. Increased inventory is anticipated, but this doesn't necessarily mean we’ll see lower home prices.
In recent months, residential property sales have shown signs of recovery. According to the Real Estate Board of Greater Vancouver (REBGV), sales surged nearly 4% year-over-year in October 2023, totaling close to 2,000 units. Despite this increase, sales are still about 30% below the decade average for this time of year, indicating that while there is activity, it’s not at the levels we might expect.
New residential listings climbed more than 15% year-over-year in October, surpassing 4,000 units. This increase in supply indicates renewed interest from sellers. However, sales remain almost 30% below the ten-year seasonal average, highlighting that demand isn't as robust as it could be. Andrew Lis, REBGV's director of economics and data analytics, noted, “With properties coming to market at a rate roughly five per cent above the ten-year seasonal average, there seems to be a continuation of the renewed interest on the part of sellers to participate in the market we’ve been watching this fall.”
Despite these dynamics, residential property prices have remained elevated. The composite benchmark price in Vancouver advanced at an annualized pace of 4.4%, reaching just below $1.2 million.
Looking ahead, the RE/MAX Housing Market Outlook for 2024 predicts continued price growth but a slowdown in sales activity. Home prices in metro Vancouver are expected to climb by 2% to a little over $1.52 million, while residential property sales are anticipated to fall by 3%.
Other regions in British Columbia present a mixed forecast. Nanaimo is expected to see a 2% jump in prices with flat sales activity, while Victoria may experience a 2% drop in home prices with stable sales.
The Vancouver market is expected to remain balanced throughout 2024, despite higher prices. Key trends include high demand for semi-detached homes and condominiums, with first-time homebuyers and move-up families driving this demand. Younger adults in the tech industry are also expected to be major buyers of new luxury builds.
Interest rates continue to play a crucial role. As Tim Hill from RE/MAX All Points Realty mentioned, “Interest rates are a huge influence in the market here in Metro Vancouver. For example, the recent pause on rates by the Bank of Canada could cause bond yields to go down, which in turn should bring us lower fixed-rate mortgages, a welcomed outcome for homebuyers, especially first-timers.”
As of June 2024, the total number of residential properties listed for sale in Vancouver has continued to increase. With approximately 11,600 active listings, this figure is only slightly above the ten-year seasonal average. New housing construction activity remains strong, with housing starts up 37% in the first ten months of 2023 compared to the same period last year, totaling 28,121 units.
Overall, with more supply in the form of resale inventory and weaker demand due to higher borrowing costs, market conditions have adjusted towards a more balanced state. The multifamily segment remains more active than the detached segment, providing a silver lining for buyers as price increases have moderated, helping maintain purchasing power.
Looking ahead, if the Bank of Canada follows through with anticipated interest rate cuts in the second half of 2024, we could see a significant boost in the real estate market. Lower mortgage rates, combined with strong new housing construction activity, could entice more prospective homebuyers and invigorate the market.
Stay tuned for further updates, and as always, feel free to reach out if you have any questions or need assistance with your real estate needs.
