The Bank of Canada may have put a pause on increases to their policy interest rate in two consecutive announcements, but rates are still much higher than consumers are used to and decisions to buy and sell are being put on hold, says the Fraser Valley Real Estate Board (FVREB)
According to new monthly statistics published on Thursday, October recorded a total of 970 sales, which represents a 12% decrease from the 1,100 recorded in September, which itself was a 14% decrease from the 1,273 recorded in August. The decreases go back to June, which recorded a 12-month high of 1,935 sales.
In terms of listings, October saw 2,535 new listings added, which represents an 11% decrease from September.
With that batch of new listings, the total number of active listings in the Fraser Valley is now 6,580, representing a 1% increase from the 6,532 after September. Last month's total was an increase of 17% when compared to October 2022, however.
The benchmark price hit $1,503,300 in October for single-detached homes, $845,300 for townhouses, and $545,400 for condominiums. All three represent minor decreases — of 1.5%, 0.4%, and 0.1% — from September, but increases from October 2022 — of 4.8%, 4.7%, and 3.7%.
Buyers or Sellers
Using the aforementioned statistics, we can identify the sales-to-new-listing ratio as well as the sales-to-active-listings ratio, which are two quantitative indicators that can give us a sense of whether the market is currently favouring buyers or sellers.
For the sales-to-new-listings ratio, a ratio of 40% or lower is considered a buyers' market, a ratio of 55% or higher is viewed as a sellers' market, and anything in between is viewed as a sign of market balance.
With 970 home sales and 2,535 new listings in September, the sales-to-new-listings ratio is now at 38.3%. In September, the ratio was at 38.5%, indicating that buyers may still have a slight advantage in the market.
For the sales-to-active-listings ratio, 12% or lower is viewed as a buyers' market, 20% or over is viewed as a sellers' market, and anything in between is viewed as a market balance.
With 970 home sales and 6,580 total active listings, the sales-to-active-listings ratio is now at 14.7%, after being at 16.8% in September, which would indicate a relatively balanced market, with movement in favour of buyers.
Analysis
"What we're seeing in the Fraser Valley and indeed across the province is the impact of sustained high interest rates on the overall market," said FVREB Chair Narinder Bains. "This has been the case since the latter half of the year so far, and we anticipate the trend will continue until we start to see some downward movement in the policy rate."
Following the October policy rate announcement, the Bank of Canada said that they have not seen housing prices decline as they would have expected. In a recent forecast, the BC Real Estate Associate said they are expecting rate decreases to begin in the first half of the year, in time for a strong rebound in the latter half of the year.
The Bank of Canada's next rate announcement will be made on December 6.
