“There are signs that the most recent Bank of Canada rate increases are slowing activity as mortgage rates climb to their highest levels in over a decade.
” – BC Real Estate Association
Total sales last month 1117 which is 24% higher than August 2022 and a 10% decrease from the previous month. Median sale price increased 8% year over year but down 1% from the previous month. There were 4720 active listings in August, up 4% from last year and 3% from the previous month.
The charts above show the increase in inventory, the decrease in sales and the flattening of prices. This needs to be clarified for many people trying to enter the market because they are finding themselves in multiple offer situations or in a complete drought of new listings. Buyers who have recently sold their large townhouses or rowhomes find the price jump to entry-level detached homes very reasonable, especially when they can drop the ever-rising strata fees. Unfortunately, for the Sellers above their city’s “entry-level” pricing, the market is starving for Buyers.
For example:
Maple Ridge: Detached homes >$1.5M had only 6 sales of 259 units of inventory.
Surrey: Detached homes >$1.75M had only 26 sales of 471 units of inventory.
The interest rates mixed with general inflation have discouraged Buyers from taking on more debt than necessary. This is a sign of the interest rate increases doing their intended job. On September 6, Bank of Canada Governor Tiff Macklem paused interest rate increases. However, the central bank may have to raise rates again if inflation stays above its target of 2%. There are still two interest rate meetings this year, and in October, the bank will publish the Monetary Policy Report for its outlook for the economy, inflation and risks to projections.
We predict that if the interest rates stay high, we will eventually see the top of the market come down to a level that is within reach for the mass of Buyers. That said, our lack of overall housing supply should keep the prices from falling too fast or too far.
