Balanced conditions come to the housing market for the holiday season
With one month left in 2023, a steady increase in housing inventory is offering home buyers across Metro Vancouver1 among the largest selection to choose from since 2021. Sales The Real Estate Board of Greater Vancouver (REBGV) reports that residential sales2 in the region totalled 1,702 in November 2023, a 4.7 per cent increase from the 1,625 sales recorded in November 2022. This was 33 per cent below the 10-year seasonal average (2,538). Listings There were 3,369 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2023. This represents a 9.8 per cent increase compared to the 3,069 properties listed in November 2022. This was 2.8 per cent below the 10-year seasonal average (3,464). The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 10,931, a 13.5 per cent increase compared to November 2022 (9,633). This is 3.7 per cent above the 10-year seasonal average (10,543). Sales-to-active listings ratio Across all detached, attached and apartment property types, the sales-to-active listings ratio for November 2023 is 16.3 per cent. By property type, the ratio is 12.7 per cent for detached homes, 19.8 per cent for attached, and 18.2 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. “Balanced market conditions typically come with flatter price trends, and that’s what we’ve seen in the market since the summer months. These trends follow a period where prices rose over seven per cent earlier in the year,” Lis said. “You probably won’t find Cyber Monday discounts, but prices have edged lower by a few per cent since the summer. And with most economists expecting mortgage rates to fall modestly in 2024, market conditions for buyers are arguably the most favorable we’ve seen in some time in our market.” By property type The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,185,100. This represents a 4.9 per cent increase over November 2022 and a one per cent decrease compared to October 2023. Sales of detached homes in November 2023 reached 523, a seven per cent increase from the 489 detached sales recorded in November 2022. The benchmark price for a detached home is $1,982,600. This represents a 6.8 per cent increase from November 2022 and a 0.9 per cent decrease compared to October 2023. Sales of apartment homes reached 850 in November 2023, a 0.4 per cent increase compared to the 847 sales in November 2022. The benchmark price of an apartment home is $762,700. This represents a 6.2 per cent increase from November 2022 and a one per cent decrease compared to October 2023. Attached home sales in November 2023 totalled 316, a 12.5 per cent increase compared to the 281 sales in November 2022. The benchmark price of a townhouse3 is $1,092,600. This represents a 6.9 per cent increase from November 2022 and a 0.7 per cent decrease compared to October 2023. 1 Areas covered by the Real Estate Board of Greater Vancouver include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler. Real Estate Board of Greater Vancouver
Bank of Canada maintains policy rate.
The Bank of Canada has made an important decision that will undoubtedly impact the real estate market. On December 6, 2023, the Bank of Canada announced that it will be maintaining its current policy rate. This news has significant implications for those looking to secure a mortgage or invest in property.For many individuals, purchasing a home is a major milestone in life. However, the decision to buy a property is often accompanied by the need to secure a mortgage. The policy rate set by the Bank of Canada directly affects mortgage rates offered by financial institutions. With the policy rate being held steady, potential homeowners can breathe a sigh of relief knowing that their borrowing costs are unlikely to increase in the near future.Furthermore, the Bank of Canada's decision reflects its assessment of the current economic conditions. By maintaining the policy rate, the central bank is signaling its confidence in the stability and growth of the Canadian economy. This confidence can provide reassurance to both home buyers and real estate investors, as it suggests a positive outlook for the housing market.In recent years, the real estate market has experienced various fluctuations, making it crucial for potential buyers and investors to stay informed about any changes in policy rates. The Bank of Canada's decision on December 6, 2023, allows individuals to plan their real estate ventures with a clearer understanding of the borrowing costs they might face.It is important to note that while the Bank of Canada has maintained its policy rate, it is always wise to consult with a mortgage professional or financial advisor to understand how this decision may personally affect your mortgage options. They can assist in evaluating your financial situation and helping you make informed decisions based on your unique circumstances.As we move forward, the stability provided by the Bank of Canada's decision will likely contribute to a steady and reliable real estate market. With confidence in the economy and predictable mortgage rates, individuals can confidently pursue their homeownership dreams or investment opportunities. Keep an eye on future announcements and market trends to make the most of this favorable situation.In conclusion, the Bank of Canada's decision to maintain its policy rate on December 6, 2023, offers stability and reassurance to those considering mortgages or investing in real estate. By staying informed and seeking professional advice, individuals can navigate the market with confidence and make well-informed decisions.
The Fed sees rising bond yields as a risk
The Fed sees rising bond yields as a risk As was widely expected, the US Federal Reserve Board (Fed) delivered its second consecutive rate hold. The Fed undertook an aggressive path to tightening monetary policy since the beginning of 2022, seeking to bring down inflation. With inflation coming down and global economic conditions uncertain, the Fed appears to be treading carefully in its monetary policy decisions, looking to avoid overtightening, which could bring down the US economy. The Fed held its federal funds rate steady at a target range of 5.25%–5.50%. The rate hold was the second straight by the Fed as it monitors the impact of its policy on inflation, the labour market and the US economy. The Fed reinforced its commitment to bringing down inflation, while also trying to ensure it does not lift rates too high and drag down economic growth materially. The US central bank believes its current rate is restrictive and could continue to pull down inflation. Furthermore, the uncertain economic conditions prevailing in the global economy have helped push US bond yields higher in recent weeks, which could tighten financial conditions further and weigh on consumer and business activity. The Fed believes inflation remains at elevated levels, while the economy is strong. At the post-announcement press conference, Chair Jerome Powell did not entirely rule out another rate hike as the Fed is currently undecided on what it will do at its next meeting. The Fed matched the Bank of Canada in holding interest rates steady at their most recent meetings. But the path forward could differ between the two central banks, with the Canadian economy stalling while the US economy expands at a relatively strong pace. The divergence between the two banks could put downward pressure on the Canadian dollar. No matter the direction of either central bank, financial markets could see some volatility in the near term as geopolitical tensions persist and tight financial conditions weigh on demand. CIBC MARKET BRIEF
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