Metro Vancouver’s housing market is heating up as summer arrives, with increasing competition among buyers and rising prices for the sixth consecutive month.
According to the Real Estate Board of Greater Vancouver (REBGV), residential home sales in the region reached 3,411 in May 2023, marking a significant 15.7 per cent increase from May 2022, and a 1.4 per cent decline from the 10-year seasonal average of 3,458.
“Back in January, few people would have predicted prices to be up as much as they are — ourselves included,” Andrew Lis, REBGV’s director of economics and data analytics, said. “Our forecast projected prices to be up modestly in 2023 by about two per cent at year-end. Instead, Metro Vancouver home prices are already up about six per cent or more across all home types at the midway point of the year.”
Shortage of homes for sale
The number of properties newly listed for sale on MLS in Metro Vancouver experienced an 11.5 per cent decrease, with 5,661 homes listed in May 2023, compared to 6,397 in May 2022. This figure was also 4.3 per cent below the 10-year seasonal average of 5,917.
Currently, there are 9,293 homes listed for sale in Metro Vancouver, which reflects a 10.5 per cent decrease from May 2022 and a 20.6 per cent drop from the 10-year seasonal average.
Sales-to-active listings ratio and market trends
The sales-to-active listings ratio for May 2023 is 38.4 per cent across all property types. By property type, the ratio is 28.5 per cent for detached homes, 45 per cent for townhomes, and 45.5 per cent for apartments.
Analysis of historical data suggests that downward pressure on home
prices occurs when the ratio dips below 12 per cent for a sustained period, while prices tend to rise when it surpasses 20 per cent over several months.
Andrew Lis, the REBGV’s director of economics and data analytics, highlighted the fundamental issue driving the price increases: an imbalance between the number of buyers and willing sellers in the market.
Lis adds, “And in a surprising twist, MLS sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity has been slower than usual this spring.
“If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22 or even 2016/17.”
While looking through a provincial lens, Brendan Ogmundson, the chief economist with the BC Real Estate Association, expressed surprise at the home sales data in May.
He noted in a social media post that a rapid increase in mortgage rates typically negatively affects sales for an extended period. However, this time, sales fell as anticipated but quickly rebounded, showcasing a noteworthy early recovery without any clear triggering factor other than pent-up demand. Ogmundson emphasized that with rates experiencing upward pressure once again, the coming months are expected to be “very interesting.”
Price Trends Across Property Types
The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,188,000. This represents a 5.6 per cent decrease compared to May 2022, but a 1.3 per cent increase compared to April 2023.
In May 2023, sales of detached homes reached 1,043, showing a substantial 30.7 per cent increase from May 2022. The benchmark price for a detached home is $1,953,600, which is a 6.7 per cent decrease compared to May 2022 but a 1.8 per cent increase compared to April 2023.
Sales of apartment homes totalled 1,730 in May 2023, a 7.9 per cent increase compared to the previous year. The benchmark price for an apartment home is $760,800, indicating a two per cent decrease year-over-year and a 1.1 per cent increase compared to April 2023.
Attached home sales in May 2023 totalled 608, reflecting a notable 16.7 per cent increase compared to May 2022. The benchmark price of an attached home is $1,083,000, representing a 4.7 per cent decrease from May 2022 but a slight 0.2 per cent increase compared to April 2023.
