Poised for a Sales Supernova?
As regions grow, so too should the number of homes that are for sale and sell. To the extent this is true, British Columbia's regions are building quite the war chest of would-be buyers.
Given the current inflation and interest rate environment, it shouldn’t come as a surprise that housing market activity has been subdued of late across the country. Not only has buyers’ purchasing power been diminished by the highest interest rates we’ve seen in two decades, but prices have remained stubbornly high. Additionally, uncertainty around interest rates has kept participants on the sidelines as they await information and clarity.
But even with the aforementioned conditions, there’s a certain number of real estate transactions you can expect in a given market. There will always be some people who need to buy or sell residential real estate, like those who moved cities, changed jobs, got married or divorced, or had a baby; in other words, people who need to move because their current home no longer fits their circumstances. And given our rapid population growth throughout the country, it’s reasonable to expect transactions to be increasing over time. So looking at monthly sales counts is useful in comparing how active a local real estate market is relative to history, but it doesn’t tell us what we could reasonably expect to see for transaction counts if macroeconomic conditions were relatively stable, or how many transactions we can expect once those conditions return.
For that we turn to per-capita sales, which here in Metro Vancouver were below average in the two years leading up to the pandemic, followed by a period of above-average per-capita sales as interest rates were historically low. Since mid-2022, however, as the Bank of Canada engaged in its rate tightening cycle and sales counts dropped off, per-capita sales have been well below the past 10-year average, suggesting that there are buyers waiting on the sidelines. Overall, since the start of 2018, there have been 34,000 fewer sales than one would otherwise expect given today’s population, suggesting that as interest rates start to decline, there will be many potential buyers waiting in the wings.
Twice a year, rennie intelligence produces the rennie landscape, which tracks a variety of demographic and economic indicators that directly and indirectly influence the housing markets of Metro Vancouver, Greater Victoria, and the Central Okanagan. Our goal is to provide our community with a basis for evaluating the trajectory of the factors that collectively define the context of the real estate market.
Our rennie intelligence team comprises our in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.
