Lukewarm sales activity and restless anticipation for interest rate cuts have crowded the conversation around housing of late. You’ll forgive us then for being so eager to lead with something else as it was a wave of new listings that took the stage in April. Indeed, the Vancouver Region tallied 10,765 new MLS listings last month, a 36% increase compared to March and 62% higher than in April 2023. Relative to the prior 10-year April average, new listings were 28% above the norm.
Pundits have waxed ad-nauseum about the lack of housing supply in the market and any buyer (or would-be buyer) who has engaged with the market in recent years knows that options have been few and far between. A sharp rise in new listings, then, should capture your attention. That 36% month-over-month increase in new listings we mentioned above? We parsed data for the Vancouver Region back to 2005 and found that to be wildly out of the ordinary for this time of year. In fact, it was the sharpest March-to-April rise in new listings in the 19 years of data on hand, and well above the typical 1.0% March-to-April increase between 2005-2023. Put another way, 10,765 new listings in April marked the sixth-most for any month going back to 2005 (that’s 232 months for those counting).
So what explains the influx of listings? Well, policy makers have been throwing a lot of ideas around lately to try and address the housing supply issue. Among them are restrictions on short-term rentals across most of BC, which prohibit owners from renting out homes that are not their principal residence (or a secondary unit on the same property) for durations of less than 90 days. That policy came into effect on May 1st.
Of course there are other factors at play here, too. Changes to the capital gains inclusion rate, amendments to the residential tenancy act, and financial challenges stemming from higher borrowing costs are all having an impact on investor-owners and could partly explain the rise in new listings. But above all else, the short-term rental ban is likely the primary factor. You can read a recent article that we wrote here which shows how new listings for condos in particular, as well as 1-bedroom and furnished rental apartment listings (ie. the types of units that are more likely to be used as short-term rentals) also spiked in April.
Now back to those buyers (or would-be-buyers) who have struggled to find suitable homes in recent years. The rise in new listings, in tandem with softer sales activity of late, means that inventory levels across the Vancouver Region have built to their highest level in nearly four years. At 18,194 active MLS listings in April, this was 16% above the prior 10-year April average (of 15,679 listings), a 52% increase from April 2023 (11,926), and the highest level since September 2020 (19,355). All told, there were 4.3 months of inventory in April—still a sellers’ market by definition, but a much healthier supply-demand balance than we’ve seen in recent years.
The trajectory for sales activity and interest rates will continue to remain uncertain. But one thing we can say for sure is that when buyers do eventually re-engage with the market, they’ll have more options to consider than they have in a long time.
The rennie review is a monthly publication that includes our take on the latest MLS data for the Vancouver Region. In addition to presenting neighbourhood-level stats, it includes information on current rennie projects, a selection of featured listings, and insightful commentary on how and why the market is changing.
Our rennie intelligence team comprises our senior economist, market analysts, and business intelligence analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in real estate dynamics, urban land economics, the macroeconomy, shifting demographics, and data science, their industry-leading data acquisition, analytical systems, and strategic research supports a comprehensive advisory service and forms the basis of frequent reports and public presentations, covering the Vancouver, Kelowna, Victoria, and Seattle marketplaces. Their thoughtful and objective approach embodies the core values of rennie.
