A new year often brings about change in the form of resolutions, new beginnings, and fresh starts. In the case of the Vancouver Region’s housing market, however, 2023 kicked off looking a lot like the end of 2022, when the market was mired in a once-in-a-decade slowdown. In fact, last month’s MLS sales count of 1,624 was the second-lowest January total in the past twenty years, behind only 2009 when we were in the depths of the Great Recession.
Additionally, sales were 54% below those of January 2022 and 42% lower than the past 10-year January average. To pile it on, January’s sales were also 17% lower than the atypically-low total from December 2022—a larger decline than the typical 13% decrease between December and January.
January 2023 was also similar to the end of 2022 in that inventory in the Vancouver Region failed to expand in any meaningful way. Following a substantial—though perhaps somewhat expected—dropoff in total listings from 10,876 on December 31st to 9,572 on January 1st (owing to year-end expiries and cancellations), the monet of January concluded with inventory sitting below that of the previous month-end total. Specifically, the 10,684 total listings available at the end of January were 2% less than in December, and 21% less than the long-run January average, though—remarkably—they were 45% higher than the record-low total from January 2022. The fact that inventory didn’t expand more, even in the face of historically-low sales counts, can be attributed to the relative sparseness of listing activity: new listings in January totalled only 5,017, which was 22% below that of last year and 26% less than the past 10-year January average.
These dynamics have, yet again, yielded (or continued to yield, depending on how you want to put it) a constrained housing supply environment throughout the region. Notably, while the early part of each year tends to be characterized by a relatively rapid burst of inventory expansion—with a 30% increase in total listings being typical for Q1—we’re not likely to experience this this year, given the sluggish pace of new listings to start 2023.
With the Bank of Canada indicating that it will hit the brakes on its rate-hiking regime after having imposed another 25 basis-point increase on January 25th, there is perhaps a hint of clarity emerging for potential homebuyers. This counts as good news for the demand-side of the market—or anyone wanting to sell their home, to be fair—though with interest rates remaining elevated for now, any increase in sales activity will likely be muted in the near-term.
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.
