Home sales in the Vancouver area last month were down about 35 percent from last June and down 16 percent from May 2022 as homes stayed on the market longer and interest rates rose, the Real Estate Board of region on Tuesday.
The continued easing that the Real Estate Board of Greater Vancouver found last month led to 2,444 sales in the region in June, down from 3,762 the same month a year earlier and 2,918 homes in May 2022.
The board’s chairman, Daniel John, attributed last month’s drop in sales – 23.3 percent below the 10-year average for sales in June – to mortgage rates rising in tandem with rising interest rates and the 39-year high inflation.
“Homebuyers have more choices to choose from and more time to make decisions than they did last year,” John said in a statement
“Rising interest rates and inflation concerns are making buyers more cautious in today’s housing market, allowing listings to pile up.”
Such observations signal a shift in the market, which remains one of the most expensive and sought-after regions in Canada. However, recent months have seen some of the hot conditions brought on by the last two years of the pandemic begin to fade.
Brokers report that it is now routine for buyers to stay out of the housing market as they wait to see if conditions ease further while sellers take time to adjust to a market that is not as frantic as it once was.
Such behavior shows the market is shifting in favor of buyers, said Tiraje Mazaheri, an agent with Coldwell Banker Prestige Realty in Vancouver.
Gone are the days when properties sold in days — or sometimes hours — and garnered multiple offers.
“Now they sit on the market for a few weeks to a few months and people don’t touch them,” Mazaheri said. “It’s a very big, drastic change.”
She has seen prospective sellers take note of this pattern and the Bank of Canada’s promises of new interest rates to come and decide to wait.
“Anyone who can hold onto their property is holding onto it right now, waiting to sell when the market turns again and goes up again, probably late this year or early next year,” she said.
This brought 5,256 new listings to the market last month, down roughly 10% from 5,849 in June 2021 and down 17.6% from 6,377 in May 2022.
Those entering the market are still attracting more money for their homes than they did last year, but less than they would have months ago.
The composite core home price index reached more than $1.2 million last month, a 12.4 percent increase from June 2021, a two percent decrease from May 2022 and a 2.2 percent decrease in the last three months.
“We are seeing downward pressure on home prices as we enter the summer in Metro Vancouver due to declining homebuyer activity rather than increased supply,” John said in a statement.
Part of that decline is due to prospective buyers, like the couple Mazaheri represents, who have lost some of their edge as interest and mortgage rates have increased.
“They said, ‘interest rates have gone up so much that our purchasing power is now much lower,’ and they’re reluctant to buy again,” Mazaheri said.
“They said, ‘We want to buy something and now our budget, our price is a lot lower,’ so that definitely influenced a lot of people.”
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