Watch REBGV President Jill Oudil’s update on the July housing market for Metro Vancouver; specifically focusing on the changing trends in demand.

The Bank of Canada announced this morning that it is raising its target for the overnight rate by 25 basis points to 0.75 per cent. In the press release accompanying the decision, the Bank noted that Canada’s economy has been robust and a significant amount of economic slack has been absorbed. While inflation data has been soft, the Bank expects that this is temporary and that inflation will return to its 2 per cent target by mid-2018.

The motivation for today’s rate increase seems primarily to be that the Bank feels that the stimulus it injected into the Canadian economy in 2015 through two rate cuts is no longer required given a recent trend of strong economic and employment growth. If that is the case, a further 25 basis point increase before the end of the year will likely follow.  After that, the pace of rate increases relies heavily on the trend in Canadian inflation, which to date has been well below the Bank’s 2 per cent target. If that trend does not reverse by early next year, the Bank may decide to stop at a 1 per cent overnight rate until higher inflation emerges.

As bond markets reprice rate expectations, Canadian mortgage rates have returned to levels observed at the beginning of the year. We expect that mortgage rates will rise further in the second half of 2017, finishing near 3 per cent for a five-year fixed rate.

For more information, please contact: 

watch:  BCREA Chief Economist Cameron Muir discuss the May 2017 statistics

REBGV President Jill Oudil gives an overview of the May housing market and looks at the year-over-year differences in our market.

Click here to view the latest Stats Centre Report for Vancouver East.

Click here to view the latest Stats Centre Report for Vancouver West.

Home buyer activity returned to near record levels across the Metro Vancouver housing market in May.

Residential property sales in the region totalled 4,364 in May 2017, a decrease of 8.5 per cent from the 4,769 sales in May 2016, an all-time record, and an increase of 22.8 per cent compared to April 2017 when 3,553 homes sold.

Last month’s sales were 23.7 per cent above the 10-year May sales average and is the third-highest selling May on record.

“Demand for condominiums and townhomes is driving today’s activity,” Jill Oudil, Real Estate Board of Greater Vancouver (REBGV) president said. “First-time buyers and people looking to downsize from their single-family homes are both competing for these two types of housing.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 6,044 in May 2017. This represents a 3.9 per cent decrease compared to the 6,289 units listed in May 2016 and a 23.2 per cent increase compared to April 2017 when 4,907 homes were listed.

The month-over-month increase in new listings was led by detached homes at 27.1 per cent, followed by apartments at 22.7 per cent and townhomes at 14.1 per cent.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,168, a 5.7 per cent increase compared to May 2016 (7,726) and a 4.5 per cent increase compared to April 2017 (7,813).

“Home buyers are beginning to have more selection to choose from in the detached market, but the number of condominiums for sale continues to decline,” Oudil said.

The sales-to-active listings ratio across all residential categories is 53.4 per cent. By property type, the ratio is 31 per cent for detached homes, 76.1 per cent for townhomes, and 94.6 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it’s clear that townhomes and condominiums are leading the way,” said Oudil. “It’s important to work with your local REALTOR® to understand the different factors affecting the market today.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $967,500. This represents an 8.8 per cent increase over May 2016 and a 2.8 per cent increase compared to April 2017.

Sales of detached properties in May 2017 reached 1,548, a decrease of 17 per cent from the 1,865 detached sales recorded in May 2016. The benchmark price for a detached property is $1,561,000. This represents a 3.1 per cent increase over May 2016 and a 2.9 per cent increase compared to April 2017.

Sales of apartment properties reached 2,025 in May 2017, a decrease of 5.8 per cent compared to the 2,150 sales in May 2016.The benchmark price for an apartment property is $571,300. This represents a 17.8 per cent increase over May 2016 and a 3.1 per cent increase compared to April 2017.

Attached property sales in May 2017 totalled 791, an increase of 4.9 per cent compared to the 754 sales in May 2016. The benchmark price for an attached property is $715,400. This represents a 13.1 per cent increase over May 2016 and a 1.9 per cent increase compared to April 2017.

Download the full May 2017 stats package here.

“BC home sales rose 6.7 per cent from May, on a seasonally adjusted basis, with June being the fourth consecutive month of increasing sales activity,” said Cameron Muir, BCREA Chief Economist. “Since February, home sales across the province have climbed by 23 per cent, on a seasonally adjusted basis,” added Muir.

On a quarterly basis, MLS® residential sales climbed 15 per cent in the second quarter, while the inventory of homes for sale has moved down 5 per cent over the last two quarters, creating improved market conditions in many regions of the province.

Year-to-date, BC residential sales dollar volume was down 8.2 per cent to $18.8 billion, compared to the same period last year. Residential unit sales were down 7.8 per cent to 35,336 units, while the average MLS® residential price was down 0.4 per cent at $531,401.

See more at BCREA 

In this video, Nicholas Meyer outlines the current state of the market in July 09 for Vancouver BC.

Nicholas Meyer discusses the current status of the real estate rental market in Vancouver BC.

Please contact us at Downtown Suites for more information, and if you have any comments, please add them below.