The number of homes sales and listings in the Greater Vancouver region are trending in opposite directions, resulting in a level of balance that is a positive for those in the market, according to new statistics published by Greater Vancouver Realtors (GVR), formerly known as the Real Estate Board of Greater Vancouver.
In May, the region recorded a total of 2,707 home sales, an amount that's lower than the April 2024 total of 2,810, the May 2023 total of 3,381, as well as the 10-year May average of 3,398.
On the other side of the equation, May saw a total of 6,374 new listings come online, which was lower than the 7,092 added in April, but significantly higher than the 5,661 added in May 2023 and the 10-year May average of 5,958.
With those new listings, the total number of active listings in the Greater Vancouver region is now up to 13,042, which is, again, higher than the 11,957 after April, the 9,293 after May 2023, and the 10-year May average of 11,344.
"The surprise in the May data is that sales have come in softer than what we'd typically expect to see at this point in the year, while the number of newly listed homes for sale is carrying some of the momentum seen in the April data," said GVR Director of Economics and Data Analytics Andrew Lis. "It's a natural inclination to chalk these trends up to one factor or another, but what we're seeing is a culmination of factors influencing buyer and seller decisions in the market right now. It's everything from higher borrowing costs, to worries about the economy, to policy interventions imposed by various levels of government."
Buyers or Sellers
The above statistics allow us to identify the sales-to-new-listings ratio and sales-to-active-listings ratio, which are two quantitative indicators that 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 considered a sellers' market, and anything in between is considered a balanced market.
With 2,707 home sales and 6,374 new listings recorded in May, the sales-to-new-listings ratio is now at 42.5%, after being at 39.6% at the end of April, which indicates movement 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 2,707 home sales and 13,042 total active listings in May, the sales-to-active-listings ratio is now 20.8%, after coming in at 23.5% in April, which again indicates movement towards buyers and a balanced market.
Zooming in on different property types, however, shows that there's more nuance, as the sales-to-active-listing ratio indicates market balance for single-detached homes and a sellers' market for both semi-attached homes and condominiums.
Sales-to-active-listings ratios for May 2024.(Greater Vancouver Realtors)
Analysis and Outlook
One may expect prices to lower when supply is high and demand is low, but that would only occur if these trends continue for a longer period of time. For now, what we can expect is price growth at a slower pace.
"With market trends now tilting back toward more balanced conditions, as the number of new listings outpaces the number of sales, we should expect to see slower price growth over the coming months," Lis said.
Following May, the composite residential benchmark price is now $1,212,000, which represents a 0.5% increase from April 2024 and a 2.3% increase over May 2023.
By property type, the benchmark price is now $2,062,600 for single-detached homes, $1,145,500 for semi-attached homes, and $776,200 for condominiums. All three represent increases of between 2.2% and 5.9% from May 2023, but smaller increases of between 0.9% and 1.3% — with the benchmark price for condominiums decreasing by 0.3% — from April.
"Up until recently, prices were climbing modestly across all market segments," added Lis. "But with rising inventory levels and softening demand, buyers who've been waiting for an opportunity might have more luck this summer, even if borrowing costs remain elevated."
The Bank of Canada will be making its policy rate announcement on Wednesady, June 5.
