The first interest rate cut in June did not have a material impact on real estate market activity, and it looks like the second cut in July was also not enough to move the needle, according to new statistics published by Greater Vancouver Realtors (GVR) on Friday.
According to GVR, a grand total of 2,333 residential sales were recorded in July, which is 5% lower than the July 2023 total of 2,455 and 17.6% lower than the 10-year average of 2,831. The 2,333 total for July 2024 includes multi-family and land sales, although the total with those two asset classes excluded is not much different, coming in at 2,317.
"The trend of buyers remaining hesitant, that began a few months ago, continued in the July data despite a fresh quarter percentage point cut to the Bank of Canada's policy rate," said GVR Director of Economics and Data Analytics Andrew Lis. "With the recent half-percentage-point decline in the policy rate over the past few months, and with so much inventory to choose from, it's a bit surprising transaction levels remain below historical norms as we enter the mid-point of summer."
Supply continues to trend in the opposite direction, as it has in the past few months. In July, a total of 5,597 new listings — single-family homes, attached homes, and condominiums — came online, which is 20.4% higher than the 4,649 added in July 2023 and 12.7% higher than the 10-year July average of 4,968.
With the new batch of listings, the total amount of active listings in Greater Vancouver is now up to 14,326, which is 39.1% higher than the July 2023 total of 10,301 and 21.5% higher than the 10-year July average of 11,788. The 14,326 total includes multi-family and land listings — despite it being a different market with a different pool of buyers — although the total amount of residential listings is still higher, at 13,749.
Buyers or Sellers
The above statistics allow us to identify the sales-to-new-listings ratio and the sales-to-active-listings ratio, two quantitative indicators that give us a sense of whether the market is currently favouring buyers or sellers, or neither.
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 considered a sellers' market, and anything in between is considered a balanced market.
With 2,317 home sales and 5,597 new listings recorded in July, the sales-to-new-listings ratio is now at 41.4%, after being at 41.8% at the end of June, indicating a lean towards buyers.
For the sales-to-active-listings ratio, a ratio of 12% or lower is viewed as favouring buyers, a ratio of 20% or higher is viewed as favouring sellers, and anything in between is viewed as a balanced market.
With 2,317 home sales and 13,749 total active listings in July, the sales-to-active-listings ratio is now 16.9%, after coming in at 17.6% in June, again indicating movement towards buyers, although the market is likely still fairly balanced.
That 16.9% number is not what it immediately seems, however, as there is a clear delineation between the single-family home market (12.8%) and the two other markets (20.1% for attached homes, 19.3% for the condominiums).
The sales-to-active-listings ratios for July 2024.(Greater Vancouver Realtors)
Pricing and Outlook
Following July, the composite residential benchmark price is now at $1,197,700, which represents a small decrease of 0.8% from June 2024 as well as a 0.8% decrease from July 2023.
By property type, the benchmark price is now $2,049,000 for single-family homes, $1,124,700 for attached homes, and $768,200 for condominiums. All three represent minor decreases of between 0.6% and 1.2% when compared to June 2024. Compared to July 2023, however, the benchmark price has increased by 2.1% for single-family homes and 1.4% for attached homes, while the benchmark price for condominiums has decreased by 0.3%.
"With the overall market experiencing balanced conditions, and with a healthy level of inventory not seen in quite a few years, price trends across all segments have levelled out with very modest declines occurring month over month," says Lis. "While it remains to be seen whether softening prices and improved borrowing costs will entice buyers to purchase as we head into the fall market, it's worth noting that it can take a few months for improvements to borrowing costs to materialize into higher transaction levels. In this respect, it's still early days, so we will watch the market for signs of transaction activity picking up in the months ahead."
The Bank of Canada's next policy interest rate announcement is scheduled for Wednesday, September 4.
