real (estate) talk | July 2024

It’s been a few weeks since the Bank of Canada’s first 25-basis-point interest rate cut and so far it appears that the arrival of lower rates has done little to stimulate housing demand. To be fair, one small reduction in the Bank’s key policy rate (which still remains elevated, at 4.75%) was never on its own going to bring much in terms of savings (or increased purchasing power) to homebuyers. Some thought that buyers might see it as a firm signal that inflation was under control and that further interest rate cuts were near, giving them more confidence to re-engage with the market. Instead, it appears that buyers are comfortable staying on the sidelines until those pending interest rate cuts actually manifest themselves. 

There were 3,659 MLS sales in the Vancouver Region in June, a decline of 12% month-over-month, which was about four times greater than the typical May-to-June decline of 3%. A few sub-markets saw month-to-month sales activity fall even further, including Maple Ridge (-25%), Vancouver East (-17%), and Coquitlam (-17%). All told, sales across the region were 27% below the prior 10-year June average (of 5,009 sales), with detached activity the furthest below average (-43%), followed by townhomes (-26%) and condos (-16%).

In contrast, sellers remained strongly engaged in June, with 8,927 new MLS listings hitting the market. This pushed active MLS listings to 20,738 at month-end, which was 21% above the prior 10-year June average (of 17,187) and the highest level since July 2019 (21,109 listings). Of note, however, is that the inventory story is not consistent across home types. A combination of government policies and economic factors have especially challenged investor-owners, pushing active condo listings to 34% above their prior 10-year June average versus 19% for townhomes and 8% for detached homes.

Even with buyers on hold, pockets of the market continued to remain active in June. For example, West Vancouver (+12%), Burnaby North (+6%), and Burnaby South (+4%) were among the handful of sub-markets that actually saw sales increase between May and June. Beyond that, many sub-markets, especially those that lean more affordable, continued to be sellers’ markets (i.e., there was less than 5 months of inventory (MOI)). Those include Pitt Meadows (3.7), New Westminster (3.8), and Port Moody (4.0), among others. And what about that surging condo inventory? Well, even the condo market remained a sellers’ market (albeit barely) with an MOI of 4.9 versus an overall MOI of 5.7 across the Vancouver Region. 

While pockets of the market continue to get by, it will take a few more interest rate cuts for sales activity to really gain traction more broadly. As it stands, most economic data continues to present a strong argument for additional cuts in the near-term. The next inflation data release on July 16th will give a clearer indication as to whether that next cut will be at the Bank’s July 24th meeting or later on September 4th. 

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.