May Marks a Cooler Vancouver Housing Market as Sales Fall 32%
After a red-hot run, Vancouver’s housing market is finally dialling back the drama.
According to the latest market figures from the Real Estate Board of Greater Vancouver (REBGV), after reaching record-setting levels in 2021, home sale activity has returned to more typical seasonal levels in the infamously pricey Metro Vancouver this spring.
REBGV says that rising interest rates are largely to blame.
The coastal city’s real estate board reports that that residential home sales in the region totalled 2,918 in May 2022, a notable 31.6% decrease from the 4,268 sales recorded in May 2021, and a 9.7% decrease from the 3,232 homes sold in April 2022. Furthermore, last month’s sales were 12.9% below the 10-year May sales average.
“With interest rates rising, homebuyers are taking more time to make their decisions in today’s housing market,” said Daniel John, Chair, REBGV. “Homebuyers have been operating in a frenzied environment for much of the past two years. This spring is providing a calmer environment, with fewer multiple offer situations, which is allowing buyers to explore their housing options, understand the changing mortgage market, and do their due diligence.”
There were 6,377 detached, attached, and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in May 2022. This represents a 10.5% decrease compared to the 7,125 homes listed in May 2021 and a 4.4% increase compared to April 2022, when 6,107 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,010, an 8.8% decrease compared to May 2021 (10,970) and a 13.8% increase compared to April 2022 (8,796). For all property types, the sales-to-active listings ratio for May 2022 is 29.2%. By property type, the ratio is 18.3% for detached homes, 35.5% for townhomes, and 38.1% for apartments.
Very Slight Price Softening Seen for Some Home Types
According to REBGV, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months. The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,261,1001. This represents a 14.7% increase over May 2021 and a 0.3% decrease compared to April 2022.
“Upward pressure on home prices has begun to ease in the housing market over the last two months,” said John. “Where home prices go next will depend on housing supply. While we’re beginning to see modest increases in home listings, we still need housing supply totals to more than double to bring the market close to balanced territory.”
Sales of detached homes in May 2022 reached 793, a 44.1% decrease from the 1,419 detached sales recorded in May 2021. The benchmark price for a detached home is $2,093,600. This represents a 15% increase from May 2021 and a 0.4% decrease from April 2022. Sales of apartment homes reached 1,605 in May 2022, a 21.7% decrease compared to the 2,049 sales in May 2021. The benchmark price of an apartment home is $779,700. This represents a 15% increase from May 2021 and a 0.4% increase compared to April 2022.
Attached home sales in May 2022 totalled 520, a 35% decrease compared to the 800 sales in May 2021. The benchmark price of an attached home is $1,141,200. This represents a 21.5% increase from May 2021 and a 0.6% decrease compared to April 2022.
The current nature of Vancouver’s housing market isn’t unlike that of (the equally as expensive) Ontario, where home prices have finally started to ease, and the pandemic-inspired frenzy has subsided as of late.