This past month has seen major shifts in the Vancouver real estate market, driven by both local and global factors that will impact buyers and sellers. The Bank of Canada reduced its policy rate by 25 basis points, and more rate cuts may be on the horizon as early as September, fueled by a cooling job market and easing inflation.
In the U.S., disappointing job growth and rising unemployment have heightened market volatility. The Sahm Rule, which signals a recession when unemployment rises by 0.5 percentage points within a year, has been triggered, raising concerns about an economic downturn. Consequently, markets are anticipating U.S. rate cuts below 4% over the next 12 months, which could lead to similar or more aggressive reductions in Canada in 2024.
Locally, tenancy laws have been adjusted again. The government has amended the personal-use notice period to three months and the dispute period to 21 days when a landlord gives notice to a tenant on behalf of a purchaser. The updated personal-use eviction rules, which took effect on July 18, 2024, will apply to home purchasers starting August 21, 2024.
The Federal government introduced 30-year amortizations for first-time home buyers on August 1 to make homeownership more affordable. However, while this lowers monthly payments, it increases the total interest paid over the life of the mortgage, raising overall costs for buyers.
Meanwhile, Canadians are facing a heavier tax burden, with 47% of income now going toward taxes—more than is spent on shelter, food, and clothing combined. This high tax load makes it challenging for many to save for a down payment or enter the housing market, further complicating the situation for prospective homebuyers.
July’s real estate statistics show a softening Vancouver market, with average home prices dropping by $60,000 and total sales falling 5% from the previous month and last year, marking three consecutive months of declining sales. With ongoing economic uncertainty and high living costs, many potential buyers are waiting for clearer signs of stability or better conditions. As the market adjusts to these developments, both buyers and sellers will face a complex and rapidly changing landscape.
CONDOS/TOWNHOUSES:
The majority of the condo and townhouse market saw another month of inventory increases, with exceptions in Port Moody, Maple Ridge, Downtown Vancouver, Vancouver’s Eastside, North Vancouver, and Tsawwassen, which saw decreases in inventory. Ladner experienced no change in inventory between June and July. The number of condos and townhouses sold in July decreased in New Westminster, Coquitlam, Port Moody, South Surrey/White Rock, Cloverdale, Vancouver, North Vancouver, and Ladner, whereas Burnaby, Port Coquitlam, Pitt Meadows, Maple Ridge, Surrey, North Delta, Langley, Mission, and Tsawwassen saw an increase in sales. Abbotsford saw no changes in the number of condos and townhouses sold or the average sale price between June and July. In terms of average sale prices, New Westminster, Port Moody, and Downtown Vancouver remained unchanged over the month of July compared to June. The average sale price decreased in July in Burnaby, Coquitlam, Surrey, North Delta, Cloverdale, Vancouver’s Westside, and Tsawwassen, while all other areas saw an increase. The majority of areas are currently in a sellers’ market, with the exceptions of Burnaby, Surrey, South Surrey/White Rock, Downtown Vancouver, and Vancouver’s Westside, which are all in a balanced market.
DETACHED HOUSES:
Shifting our attention to the detached housing market. Most areas saw an increase in inventory throughout July, with Ladner being an exception, experiencing no change. Decreases in inventory were observed in Port Moody, Abbotsford, North Vancouver, and Tsawwassen. Interestingly, New Westminster and Tsawwassen saw no change in the number of homes sold between June and July, while only a few areas, including Port Coquitlam, Port Moody, Maple Ridge, Mission, Vancouver’s Eastside, and Ladner, saw an increase in sales. Pitt Meadows was the only area where the average sale price remained unchanged. In contrast, increases in average sale prices were noted in Port Moody, Maple Ridge, Surrey, South Surrey/White Rock, North Delta, Langley, Abbotsford, Mission, and Ladner. Most areas are in a balanced market, with Surrey and South Surrey/White Rock remaining in a buyers’ market, joined by Vancouver’s Westside. Currently, the only areas in a sellers’ market are North Vancouver and Ladner.
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