Home sales plunged in Vancouver last month, adding to evidence that rising interest rates are pushing many potential buyers away.
The Real Estate Board of Greater Vancouver (REBGV) said in a release Wednesday that there were 1,887 sales in the region last month; this represents a 43.3% decline from a year earlier and a 22.8% decline from June. The Real Estate Board added that sales activity in July was 35.2% below the 10-year average for the month.
Despite the decline in sales, prices were relatively stable. REBGV said the benchmark price for Metro Vancouver was down 2.2 per cent sequentially to $1,207,400. Compared to a year earlier, the reference price rose by 10.3 percent.
“Homebuyers are more cautious in today’s market in response to rising interest rates and inflation concerns. This has allowed the choice of homes for sale to increase and prices to decrease in the region over the past three months,” REBGV chairman Daniel John said in a release.
The Bank of Canada has raised its target for the overnight rate four times this year, most recently with a full increase in July to 2.5 percent.
New home listings fell 24.7% from June to July, while the total number of homes listed for sale fell 1.3% last month, according to REBGV data.
Housing markets are not built to withstand these interest rate levels: Steve Sarecki
Steve Sarecki, Vancouver broker at Oakwyn Realty, joins BNN Bloomberg to discuss July 2022 Vancouver home sales data showing a sharp decline in sales. He says home sales tend to fall sharply when mortgage rates move north of 3.5 percent because there is too much debt and leverage in the housing market. Sarecki says there is very little demand and low inventory in the Vancouver market right now, and he doesn’t see a rebalancing anytime soon.
Steve Sarecki, a Vancouver-based broker at Oakwyn Realty, said in an interview Wednesday that the best way to describe local market conditions is “illiquid” as prospective homebuyers play the waiting game, expecting to be able to to get a better price in the future.
“When you dig into the weeds, months of inventory for sale is still increasing because demand is so weak. So we don’t really see this flood of sellers and everyone panicking, saying, “Oh my gosh, interest rates are going up.
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