The market has been slowing as buyer demand has been lowering which has been causing a gradual rise in homes for purchase.
Sales of homes in the region reached a total of 1,887 in July of this year as reported by the Real Estate Board of Greater Vancouver (REBGV). This is a 43.3% decrease from the same time last year and a 22.8% decrease from that of June 2022.
Daniel John, REBGV Chair stated “Home buyers are exercising more caution in today’s market in response to rising interest rates and inflationary concerns. This allowed the selection of homes for sale to increase and prices to edge down in the region over the last three months."
In July of 2022 there were 3,960 homes newly listed across all types (detached, attached and apartment) on the MLS system. This is a 24.7% decrease from June 2022 and a 9.5% decrease from July of last year. Currently there are a total of 10,288 homes listed for sale in Metro Vancouver; which is a 4.4% increase from last year and a 1.3% decrease from June 2022.
“After two years of market conditions that favoured home sellers, home buyers now have more selection to choose from and more time to make their decision,” John said. “In today’s changing housing market, both home buyers and sellers should invest the time to understand what these changes mean for their personal circumstances.”
The sales-to-active listings ratio for July 2022 for all property types combined is 18.3%. The breakdown per property type is as follows:
Detached: 11.8%
Townhomes: 20%
Apartments: 24.5%
Analysts generally state that downward pressure on home prices occurs when the sales-to-active ratio moves below 12% for a sustained period, while prices of homes will often have upward pressure when it surpasses 20% over a sustained period.
Townhomes: 20%
Apartments: 24.5%
Analysts generally state that downward pressure on home prices occurs when the sales-to-active ratio moves below 12% for a sustained period, while prices of homes will often have upward pressure when it surpasses 20% over a sustained period.
The benchmark price for all homes combined in Metro Vancouver is currently at $1,207,400; which is a 2.3% decrease from June 2022 and a 10.3% increase from 2021.
There were a total of 523 detached homes sold in the region, which was a 50.2% decrease from July 2021. The benchmark price currently sits at $2,000,600; which represents a 1.5% decrease from June of this year and a 11.4% increase from July 2021.
Attached homes reached a total of 304 in July, which was a 50.2% decrease from July of last year. Currently the benchmark price is $1,096,500. This is a 1.7% decrease from June 2022 and a 15.8% increase from July of last year.
The sales of apartments attained a total number of 1,060 in July of this year. This is a 36.45 decrease from July 2021. The benchmark price for an apartment is $755,000. This is a 11.4% increase from last year and a 1.5% decrease from June 2022.
THE TAKEAWAY:
As the interest rates on mortgages climb (predictions are for another 0.50 increase next month) purchasers buying power is decreasing. This will have to be adjusted for by anyone planning to sell for the next foreseeable future. Yes, prices will fall but a purchaser will be paying more on their monthly mortgage. That being said, taking the option of a variable mortgage may be in the best interest for a purchaser as eventually rates will likely drop again and then they can reap the rewards of getting a place for less dollars and will get to enjoy a lower interest rate eventually.
This is also coming to a good time for investors that already have a unit and want to leverage that to purchase an investment property (much like in the BRRRR method, which you can read about here) as they can use the equity and put a larger down payment on the investment property, which will result in it becoming cash flow even or positive quickly.
Generally speaking there is always a way to make a market change work to an advantage, it is just a matter of figuring out how and if it will make sense for your particular situation. If you would like a more targeted analysis for your particular area or needs, please feel free to contact me via phone at 604-522-4777 or e-mail directly at: haze@hazerealty.com or join us at our Facebook Page (www.facebook.com/HazeRealty)
(Source: https://www.rebgv.org/market-watch/monthly-market-report/july-2022.html)