Much like the years before it, the Greater Vancouver housing market in 2023 was largely dictated by interest rates. What that ultimately translated to was a 10.3% decrease in home sales over the course of the year, according to statistics published by the Real Estate Board of Greater Vancouver (REBGV) on Wednesday.

In 2023, the region recorded a grand total of 26,249 sales, after seeing 29,261 in 2022. The 2022 total was also a significant drop-off (41.5%) from the 2021 total of 44,884.

Zooming out and away from the COVID boom, however, 2023's total was still well short, by 23.4%, of the 10-year average of 34,272, according to REBGV.

However, 2023 was also a year where interest rates reached their highest levels in more than two decades, and with that context in mind, the housing market in Greater Vancouver had a decent year — and definitely better than many were expecting.

"You could miss it by just looking at the year-end totals, but 2023 was a strong year for the Metro Vancouver housing market considering that mortgage rates were the highest they've been in over a decade," says REBGV Director of Economics and Data Analytics Andrew Lis. "In our 2023 forecast, we called for modest price increases throughout the year while most other forecasters were predicting price declines. The fact that we ended the year with 5%+ gains in home prices across all market segments demonstrates that Metro Vancouver remains an attractive and desirable destination, and elevated borrowing costs alone aren't enough to dissuade buyers determined to get into this market."

On the supply side, 2023 saw a total of 50,893 properties listed, which represents a 7.5% decrease compared to the 55,047 recorded in 2022 and 20.2% below the 63,761 recorded in 2021. Looking at the 10-year average, 2023's total was again well short, this time by 10.5%.

"Ultimately, the story of 2023 is one of too few homes available relative to the pool of willing and qualified buyers," Lis said. "Sellers were reluctant to list their properties early in the year, which led to fewer sales than usual coming out of the gate. But this also led to near record-low inventory levels in the spring, which put upward pressure on prices as buyers competed for the scarce few homes available."

December 2023

In December, a total of 1,333 home sales were recorded across Greater Vancouver, which was down significantly from the 1,698 sold in November, but to be expected due to seasonal trends.

A total of 1,327 new listings hit the market last month, bringing the number of active listings to 8,328.

Based on those numbers, the sales-to-active-listings ratio for December was 16%, indicating the housing market is currently at a near-perfect balance, where 12% or lower is considered a buyers' market and 20% or greater is considered a sellers' market.

There was more variation when looking at different property types, however, with the sales-to-active-listings ratio for single-detached homes being in buyers' market territory (11.1%), while the ratio for townhouses (18.7%) and condominiums (19.6%) were closer to sellers' market territory.

The sales-to-active-listings ratio for December 2023.The sales-to-active-listings ratio for December 2023.(REBGV)

In terms of prices, the benchmark price is now at $1,964,400 for single-detached homes, $1,072,700 for townhouses, and $751,300 for condominiums. All three represent decreases between 0.9% and 1.8% compared to November 2023 and increases between 5.6% and 7.7% compared to December 2022.

"Looking back on the year, it's hard not to wonder how we'd be closing out 2023 if mortgage rates had been a few percent lower than they were," Lis adds. "And it looks like we might get some insight into that question in 2024, as bond markets and professional forecasters are projecting lower borrowing costs are likely to come, with modest rate cuts expected in the first half of the New Year."

The Bank of Canada's next policy interest rate announcement is scheduled for Wednesday, January 24. Many are expecting some interest rate relief in the first half of 2024, but it remains unclear whether that relief will come in the first announcement of the new year. In the long-term, however, TD recently projected that the Bank of Canada could drop interest rates as low as 2.25% by 2025.