Is this the calm before the storm? Maybe and maybe not, according to new statistics and analysis published by both the Fraser Valley Real Estate Board (FVREB) and Greater Vancouver Realtors (GVR) on Wednesday.
Sales in both real estate board regions are notably lower than they were this time last year. In the Fraser Valley, a total of 982 sales were recorded in September, a number over 10% lower than September 2023 and the second-lowest September in a decade, said the FVREB. In Greater Vancouver, a total of 1,834 sales were recorded last month, down about 4.1% from September 2023 and 26% below the 10-year September average, said GVR.
On the other side of the supply-demand equation is inventory, which continues to accumulate. In the Fraser Valley, a total of 3,352 new listings were added to the market in September, a 17% increase from September 2023. In Greater Vancouver, the total was 6,144, a year-over-year increase of 12.8%.
Overall listings — the total amount of active listings — is now up to 9,045 in the Fraser Valley and 14,371 in Greater Vancouver, which represent increases of 39% and 33%, respectively, compared to this time last year.
As is typically the case when demand is low and supply is high, prices are being reduced. The composite residential benchmark price has dropped to $978,800 (-1.4%) in the Fraser Valley and $1,179,700 (-1.8%) compared to this time last year, and this was generally true across the three different residential property types.
Market Analysis
All of this is happening despite three consecutive rate cuts by the Bank of Canada, as buyers across Metro Vancouver remain cautious.
"With three rate cuts already and more expected before the end of the year, buyers are watching the market closely to time their purchasing decisions," said FVREB Chair Jeff Chadha. "The current conditions should favour buyers, particularly in the detached market, however until we start to see some movement in asking prices, properties will continue to sit on the market for extended periods as both buyers and sellers await the next rate announcement."
"We know the demand is there among Fraser Valley buyers," added FVREB CEO Baldev Gill. "After months on the sidelines, buyers want to get into the market but many also need to sell before they can buy. When you factor in affordability challenges and the anticipation of more interest rate cuts, we are seeing persistent weakness in the market."
Speaking on Greater Vancouver, GVR Director of Economics and Data Analytics Andrew Lis is reading the market the same way.
"Real estate watchers have been monitoring the data for signs of renewed strength in demand in response to recent mortgage rate reductions, but the September figures don't offer the signal that many are watching for. [...] This downward pressure on prices is a result of sales not keeping pace with the number of newly listed properties coming to market, which has now put the overall market on the cusp of a buyers' market. With two more policy rate decisions to go this year, and all signs pointing to further reductions, it's not inconceivable that demand may still pick up later this fall should buyers step off the sidelines."
The Bank of Canada's next interest rate announcement is scheduled for Wednesday, October 23.
