As the cold days of winter gave way to the arrival of spring, a wave of positivity swept across the real estate market in Metro Vancouver.
As the spring season unfolded, it became clear that the Metro Vancouver market was undergoing a remarkable transformation, setting an optimistic outlook for both buyers and sellers alike, according to The Fifth Dimension Spring Edition report.
The report, prepared by Fifth Avenue Real Estate Marketing Limited and Baker West Real Estate, with supporting data collected and presented by Zonda Urban, reveals that Metro Vancouver's real estate market is undergoing a significant shift, driven by a combination of factors.
"These positive developments serve as a resounding testament to the indomitable spirit of the real estate market, showcasing its remarkable ability to adapt, thrive, and overcome challenges," Jamie Squires, President of Fifth Avenue Real Estate Marketing Ltd., says in the report.
"Within this evolving landscape, four areas have emerged as beacons of progress, showcasing remarkable improvements in the overall real estate market."
Leading the pack was Vancouver's Northshore, which experienced a "remarkable" 91% surge in sales absorptions compared to the previous quarter. This impressive growth can be attributed to the introduction of new high-rise developments, expanding the available supply and meeting the rising demand.
South Surrey/White Rock also experienced a resurgence, led by a surge in sales activity. According to the report, the area witnessed a threefold surge in sales activity compared to the previous quarter. This growth can be attributed to increased townhome activity and a limited influx of new developments, resulting in a scarcity of available condominiums in both the high and low-rise segments.
The report says this scarcity emphasizes the desirability and strong demand within this vibrant neighbourhood.
New Home Market:
Metro Vancouver's new home market showed signs of recovery in Q1-2023, with buyer activity gaining positive momentum.
However, many developers delayed project launches to wait for improved economic and purchaser sentiment, with only 12 new projects launched, bringing 1,415 units into the market.
The total inventory released was significantly lower than the previous first quarters. The quarter saw 2,141 total new home sales, the lowest Q1 total since 2013.
On a positive note, Q1 sales were 6% higher than the previous quarter. There were 7,462 released and unsold units remaining, a 9% decrease from the previous quarter but a 45% increase from the same quarter last year.
High-rise sales accounted for 60% of new home sales during the quarter, with 1,286 recorded. Notable sales activity occurred in various sub-markets, including Burnaby/New Westminster, Central Surrey/North Delta, and the Tri-Cities.
The Q1 resale market also showed encouraging growth rates compared to the previous quarter, with High Rise, Low Rise, and Townhome sectors experiencing growth rates of 58%, 22%, and 43%, respectively.
Although there were declines compared to the same quarter last year, a broader market context and evolving consumer preferences must be considered. Active listings increased by 34% compared to the previous quarter, highlighting an increased supply of options for buyers. This trend extended to the High Rise, Low Rise, and Townhome segments, with notable increases of 38%, 41%, and 20%, respectively.
While the Bank of Canada's decision to maintain the overnight rate at 450 basis points has brought a sense of optimism to the local market, borrowing costs remain high, impacting purchasing activity.
However, positive migration patterns have led to increased rental demand and record-high rental rates, signalling a thriving rental market. Looking ahead, there is growing optimism for buying activity in Metro Vancouver for the latter half of the year.
Additionally, successful launches in the first quarter have set the stage for renewed confidence, with anticipation for additional launches in the second quarter to further strengthen developer confidence.
"If the BOC holds or lowers the overnight rates, it will boost consumer confidence in the market. However, further rate increases could reduce the absorption rate gains seen in this quarter, as they will increase borrowing costs and limit potential buyers’ purchasing power," Squires says, noting that both inflation and how the Bank of Canada responds to it need to be monitored in the coming months.
And with rate updates scheduled for June 7th and July 12th, she advises: "be ready to celebrate or wallow away as these two announcements will set the tone for the summer Q3 market."
Read The Fifth Dimension Spring Edition 2023 report in full here.
This article was produced in partnership with STOREYS Custom Studio.