We continue to see a distraction coming from the United States with their presidential election and their Federal Bank’s rate decision in the days after. The US has some catching up to do with Canada in terms of interest rate cuts and as a result we’ve seen the Canadian Dollar drop to lows last seen in 2020. With the US Economy performing better than Canada, it’s unclear how much the US will cut their rates in 2024. This could mean a lower Canadian Dollar as rates continue to come down in Canada with the Bank of Canada potentially dropping by another half percent in December and again in January. Economic headwinds may continue to be a distraction.
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We’ve said it before, and this could be true projecting into 2025: buy now or compete later.
Kevin Skipworth
Dexter Realty
Sales finally picked up.
There were 2,632 properties sold in Greater Vancouver in October, after 1,852 sold in September, 1,903 sold in August, 2,333 properties sold in July and 2,418 sold in June. This was the highest number of sales since May. Will October be the peak of the fall market? Based on seeing a greater percentage of sales occurring in the first half of October, November will likely see less activity. But that is typically the case. Given the half percent interest rate drop by the Bank of Canada in late October, anything is possible, though. The only time in the last 30 years we’ve seen November outperform October has been in periods coming out of a slow market cycle. Anecdotally, there was a tonne of greater buyer engagement after the October 23rd rate announcement, some properties that had been sitting were getting activity and even offers, and with another Bank of Canada meeting on December 11th, this trend of buyers engaging is likely to continue, especially with another “jumbo” rate drop in December likely.
Sales in October were a 32% increase from the 1,996 properties sold last year and a 37% increase from sales in October 2022. This after five successive months of year-over-year declines for sales totals in Greater Vancouver. This month-over-month increase in sales is the highest we have seen for the month of October going back 30 years and the highest increase for a month since early 2022 coming out of 2021. Something was different this October for buyers and that could be the signal that sales activity is swinging back after a period of below average sales. With new mortgage rules coming into effect in December that will allow buyers of pre-sales to increase their amortization period to 30 years and an increase of the threshold for insured mortgages to $1.5 million for first-time buyers, this could add more demand into the new year. We’ve said it before, and this could be true projecting into 2025: buy now or compete later.
Sales in October were 5% below the ten-year average, a significant improvement over the last few months where September was 26% below the ten-year average, August sales were 26% below the ten-year average, July was 18% below the ten-year average and June was 24% below the ten-year average. This was not just a seasonal adjustment. October sales showed a recognizable improvement in market activity. While April and May sales in 2024 were slightly higher, October’s promise seems to be a better sign of the market to come.
Listings dipped a little, but remained historically high.
In Greater Vancouver the number of new listings in October declined from September but were the highest for the month of October since 2020 and the second highest for the month of October going back to 1991. Sellers are still participating in the market although some of those listings may be properties taken off and relisted at a lower price as sellers adjust to market activity and buyer patience. With 5,577 new listings in October, this was a 10% decline from the number of new listings in September and a 17% increase from the number of new listings that came out in October 2023. Listings will help provide opportunities for buyers who will engage in the market through the remainder of 2024 and those savvy buyers will look to take advantage of any opportunities that exist.
The number of new listings in October were 20% above the ten-year average after September was 16% above, August 1.5% below, July 12% above and June 2% above the ten-year average. With two months left in the year, the total new listings for the year are already ahead of 2023 and will finish with more than 60,000 in Greater Vancouver. This will likely be the second highest annual amount in the last ten years on the heels of 63,711 in 2021. While on the high side, it is still not as high as 1992 to 1996, where the number of new listings in those years averaged 63,452. But as a percentage of total housing stock, there are far fewer homeowners listing their properties for sale compared to 30 years ago. And with the two-year anti-flipping tax of 20% being introduced by the BC NDP in January 2025 (retroactive to the previous two years), this will lead to less homes being listed. And if you are hoping to buy a home someone has renovated so you don’t have to, there will be less opportunity for that starting in January.
Supply dropped – some segments even became seller’s markets.
There were 14,477 active listings in Greater Vancouver at month end, compared to 14,932 at the end of September. After being up 46% year-over-year at the end of May, currently there are 25% more active listings year-over-year, a drop from being at 31% at the end of September. And with several listings expiring on October 31, the total number of active listings at the start of November dropped to 14,104. Even with the higher levels of new listings, Greater Vancouver still didn’t hit 15,000 total actives and hasn’t seen that number since 2019. Looking back, between 1995 and 2000, total active listings were above 15,000 for that period. This was like the stretch of 2010 through 2014 where most months saw over 15,000 active listings in Greater Vancouver. As the year finishes, total active listings will continue to decrease and may finish below 10,000.
Months of supply dropped in Greater Vancouver in all markets and segments. Overall, the detached market in Greater Vancouver is down to seven months supply from 11 while townhomes dropped to four months from six (technically a seller’s market); condos dropped to 4.5 months from seven. It’s not surprising that as mortgage rates decline, activity in the multi-family segment increases. Increased sales in all areas and types of homes in October brought inventories down and, with the higher sales, created more competition amongst buyers for new listings as well as those active on the market. Townhomes and condos are sitting at 30% and 29% above last year’s active listing counts while detached homes are only 20% above the levels at this time in 2023.
October showed a significant improvement in sales activity, which is above what is seasonally typical. Driven by the townhome market, the missing middle continues to be the most difficult to get into for buyers. One month doesn’t make a trend, but with continued interest rate reductions, it’s highly probable that activity in real estate will continue to improve. How much so is very much dependent on economic headwinds that are ahead, not to mention political distractions that will continue.
