Home buyer demand continues to strengthen in November

Home buyer demand continues to strengthen in November Home sales registered in the MLS® in the Metro Vancouver market rose 28 percent year-over-year in November, building on the momentum of the 30 percent year-over-year increase seen in October.  The Greater Vancouver REALTORS® (GVR) reports that residential sales in the region totalled 2,181 in November 2024, a 28.1 per cent increase from the 1,702 sales recorded in November 2023. This was 12.8 per cent below the 10-year seasonal average (2,500).  “When we saw demand pick up in October, there was still a question over whether it was a blip in the data or the start of an emerging trend,” Andrew Lis, GVR’s director of economics and data analytics said. “While the November market isn’t quite a Cyber Monday door-crasher, buyers are continuing to take advantage of the relatively balanced market conditions while they last.”  There were 3,725 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2024. This represents a 10.6 per cent increase compared to the 3,369 properties listed in November 2023. This was 5.4 per cent above the 10-year seasonal average (3,535).  The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 13,245, a 21.2 per cent increase compared to November 2023 (10,931). This is 26.1 per cent above the 10-year seasonal average (10,502).  Across all detached, attached and apartment property types, the sales-to-active listings ratio for November 2024 is 17.1 per cent. By property type, the ratio is 12.7 per cent for detached homes, 23.1 per cent for attached, and 18.7 per cent for apartments.  Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.  “Although demand has increased as we head into year-end, the number of newly listed properties coming to market in November remained sufficient to keep prices steady across all segments,” Lis said. “But as we move into the New Year, if the strength in demand continues at the current pace, and the pace of newly listed properties coming to market doesn’t keep up, it may not be long until we see the return of upward pressure on prices.”  The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,172,100. This represents a 0.9 per cent decrease over November 2023 and nearly unchanged compared to October 2024.  Sales of detached homes in November 2024 reached 626, a 19.7 per cent increase from the 523 detached sales recorded in November 2023. The benchmark price for a detached home is $1,997,400. This represents a one per cent increase from November 2023 and a 0.3 per cent decrease compared to October 2024.  Sales of apartment homes reached 1,089 in November 2024, a 28.1 per cent increase compared to the 850 sales in November 2023. The benchmark price of an apartment home is $752,800. This represents a 1.2 per cent decrease from November 2023 and a 0.6 per cent decrease compared to October 2024.  Attached home sales in November 2024 totalled 451, a 42.7 per cent increase compared to the 316 sales in November 2023. The benchmark price of a townhouse is $1,117,600. This represents a 1.8 per cent increase from November 2023 and a 0.8 per cent increase compared to October 2024. Greater Vancouver REALTORS, Dec. 3, 2024

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50 Basis Point Bank of Canada Rate Cut

The Bank of Canada recently made headlines with a significant move: a 50 basis point cut to its benchmark interest rate. This decision is poised to have far-reaching implications for various sectors, particularly the real estate market. Let's delve into what this means for homeowners, prospective buyers, and the broader economy.Interest rates are a crucial lever in the economic machinery. By lowering its benchmark rate by 0.5%, the Bank of Canada aims to stimulate economic activity. Lower interest rates generally translate to cheaper borrowing costs, which can boost consumer spending and investment. For those involved in the real estate market, this is particularly significant.For existing homeowners with variable-rate mortgages, this rate cut could lead to lower monthly mortgage payments almost immediately. This extra disposable income can be redirected towards savings or other expenditures, potentially stimulating the economy further. Fixed-rate mortgage holders won't see an immediate change, but they could benefit when it's time to renew their mortgage.Prospective homebuyers stand to gain as well. Lower interest rates make mortgages more affordable, allowing buyers to qualify for larger loans or enjoy smaller monthly payments on their desired properties. This could increase demand in the housing market, driving up property values in some areas.However, it's essential to approach this development with a balanced perspective. While lower interest rates can make borrowing more attractive, they also signal underlying economic challenges that prompted the Bank of Canada's decision. Prospective buyers should consider their long-term financial stability and not rush into purchases solely based on lower rates.In summary, the Bank of Canada's 50 basis point rate cut offers a mixed bag of opportunities and considerations for those in the real estate market. Lower borrowing costs can provide immediate financial relief and make homeownership more accessible, but it's crucial to remain mindful of broader economic conditions and personal financial health. As always, consulting with financial advisors and real estate professionals can help navigate these changes effectively.

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The Bank of Canada cut its key interest rate to 4.5 per cent

The Bank of Canada cut its key interest rate to 4.5 per cent on Wednesday, a decision that holds profound implications for the Canadian real estate market. Lower interest rates typically mean cheaper borrowing costs, which can be a welcome relief for potential homebuyers and investors alike. Let’s delve into this market update to understand the multifaceted impact of this rate cut. First, it’s essential to note the broader economic context that led to this decision by the Bank of Canada. The rate cut is an effort to stimulate economic growth by making loans more affordable for businesses and consumers. Easier access to credit can encourage spending and investment, crucial elements for a thriving economy. This is particularly relevant for the real estate market. Lower interest rates can lead to lower mortgage rates, which can boost housing affordability. Potential buyers who were previously on the fence may now find it more feasible to enter the housing market. Additionally, this can spur increased activity among existing homeowners looking to refinance their mortgages at more favorable terms, freeing up capital for other expenditures or investments. However, while this is generally positive news for buyers, sellers can also benefit. An uptick in demand spurred by lower interest rates can drive more competition and potentially higher home prices. For real estate investors, particularly those offering rental properties, this can mean higher property values and better returns on investment. It’s also worth noting the potential long-term implications. While lower interest rates can provide immediate market stimulation, prolonged periods of low rates can lead to overheating and increased risk of bubbles. Therefore, monitoring market conditions closely is crucial. In summary, the Bank of Canada’s interest rate cut is a pivotal event with widespread ramifications for the real estate market. With more accessible credit, both buyers and sellers stand to gain, prompting shifts in market dynamics. As always, staying informed and agile in response to these changes will be key to navigating the evolving landscape.

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