Metro Vancouver’s housing market continued its upward trend in April 2023 as the Real Estate Board of Greater Vancouver (REBGV) reported a surge in home sales and a rise in home prices.
According to Andrew Lis, REBGV’s director of economics and data analytics, the recent rebound in demand signals a return of buyer confidence in the market, with homebuyers seemingly ready to invest in real estate again despite mortgage rates “roughly” doubling.
“The latest MLS HPI data show home prices have increased about five per cent year-to-date, which already outpaces our forecast of one to two per cent by year-end,” Lis explains. “The year is far from over, however, and it remains to be seen if these price increases will be sustained into 2024.”
Sales and inventory
According to the REBGV, home sales in the region reached 2,741 in April 2023, a 16.5 per cent decrease from the previous year, but only 15.6 per cent below the 10-year seasonal average.
The number of sales this April was only 1.8% below the 5 year average for April in REBGV.
With mortgage rates at 5%, we basically had the same number of people as normal buy a home in April.
— Jesse Kleine (@jesse_kleine) May 1, 2023
The report also revealed that inventory levels remain low, with 8,790 homes currently listed for sale on the MLS system in Metro Vancouver, down 4.2 per cent compared to April 2022 and 20.9 per cent below the 10-year seasonal average.
Across all detached, attached and apartment property types, the sales-to-active listings ratio for April 2023 is 32.7 per cent. By property type, the ratio is 24.4 per cent for detached homes, 40.1 per cent for townhomes, and 37.4 per cent for apartments.
Prices
Despite concerns over rising interest rates, home prices continued to soar in April 2023. The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is now $1.17 million representing a 7.4 per cent decrease over April 2022 but a 2.4 per cent increase compared to March 2023.
The benchmark price for detached properties is $1.9 million, while the benchmark price of an apartment property is $752,300, and an attached unit is $1.07 million.
REBGV notes downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“…What we’re seeing unfold so far this year is consistent with our prediction that near record-low inventory levels would create competitive conditions where almost any resurgence in demand would translate to price escalation, despite the elevated borrowing cost environment,” Lis explains.
“At the crux of it, the issue remains a matter of far too little resale supply available relative to the pool of active buyers in our market.”
