Real (Estate) Talk with Ryan Berlin - December 2022

In last month’s rennie review, we predicted that November’s MLS sales counts for the Vancouver Region would max out below 3,000; that is what ultimately transpired, with our market tallying 2,407 sales during the month. This was down 55% (!) from 2021’s record November count of more than 5,300 sales, 13% lower than October 2022 (versus a typical seasonal drop of 10%), and 39% below the past-decade November average. 

Now a week into December, and Vancouver’s market is on pace for fewer than 2,400 sales, which would mark the first time in a decade that the region has strung together 6 straight months of sub-3,000 transactions.

Demand continues to be hampered by both rising borrowing costs and the uncertainty around when interest rates will stop climbing, though the Bank of Canada just this week indicated—after raising its trend-setting rate by another 50 basis points—that the end of this cycle of monetary tightening is likely near.

On the backs of both buyer scarcity and evermore expensive money, the overall composite benchmark price in the Vancouver Region fell by 1.7% between October and November, marking the seventh straight month of declining home values. Prices for all home types fell month-to-month into November, pushing them closer to last year’s levels: condo and townhome prices are now only 4% and 3%, respectively, higher than they were one year ago, while that of detached homes is 3% lower. 

Prices would certainly be lower than they are—that is, they would have fallen faster—if it were not for the continued vice on supply, which held the total number of available homes to under 14,000 across the region (20% lower than is typical at this time of the year). As we’ve mentioned in past editions of the rennie review, this again highlights how rising interest rates have had a greater impact on the purchasing affordability of buyers than on the payment affordability of current owners. This latter dimension is more directly impacted by the labour market (if you have a job it’s generally easier to pay your mortgage; no job, and it’s usually more difficult), which has been characterized by a sub-5% unemployment rate since May. As such, it’s not a huge surprise that new listings were down 23% last month versus one year ago (when the unemployment rate was above 6%).

With December’s market conditions unlikely to look much different from November’s (or October’s…or September’s…), we’re looking to the new year for a change of pace. A likely halt to further rate hikes will serve to stabilize the demand side of Vancouver’s housing market, setting the stage for what promises to be a more active spring.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.