Vancouver Real Estate Update – May 2023
It seems like the Metro Vancouver real estate market has been gaining momentum in 2023. Despite a slower start earlier in the year, there have been steady price increases for six consecutive months.
Prices have exceeded initial forecasts, with a rise of approximately 6% across all home types by the midway point of the year, compared to a projected increase of 2% for the entire year.
The recent decision by the Bank of Canada to raise the interest rate by 25 basis points, bringing the overnight rate to 4.75%, was expected due to increased spending and the ongoing battle against inflation. In light of this, the advice from mortgage broker Faisal Vallani is for borrowers to consider shorter-term fixed rate options rather than variable rates. Existing variable rate holders should explore the possibility of locking in their rates if they can handle the higher payments.
Looking at the May statistics, prices compared to May 2022 have shown a decline across all property types.
All property types have experienced a decrease in overall price, with detached homes down by 6.7%, attached homes (townhomes/duplex) down by 4.7%, and apartments down by 2%. Despite this decline, demand continues to outpace supply, leading to increased competition among buyers. Sales were up by 15.7% in May, while new listings decreased by 11.5% compared to the same period last year. This does put an upward pressure on buyers and has created some tension in the market.
Although prices are still below last year’s levels, the upward pressure on prices indicates the strong demand in the market. The summer months will likely bring further developments, and if you have any specific questions or concerns regarding your circumstances, it’s advisable to reach out to a mortgage professional or real estate agent for personalized advice.
The Real Estate Board of Greater Vancouver Statistics for May 2023:
The Bank of Canada’s economic progress report