real (estate) talk | November 2024

In many ways, October was a pretty eventful month. First, Statistics Canada reported inflation data that, at 1.6%, solidified the end of a more than two-year quest to bring down the highest inflation in a generation. That was followed by a larger-than-normal 50-basis-point interest rate cut by the Bank of Canada, which has dropped its key policy rate from 5.00% to 3.75% in five months. Just one day later, the federal government announced a profound pivot to its immigration policy that, if fully implemented, would lead to the first decline in Canada’s population since Confederation. All the while, our neighbours (neighbors?) to the south were in the final month of campaigning toward what would be the re-election of Donald Trump.

Despite all of that, a notable increase in real estate activity across the Vancouver Region has given us plenty to write about. There were 3,890 MLS sales in October, the first increase in six months and the third-most sales of any month this year (April remains the high-water mark at 4,209). While sales activity typically picks up in October, this was far from the typical October bump. The 41% month-over-month increase was more than five times the typical 8% September-to-October gain. This resulted in the largest September-to-October increase in 20 years of available data, well above the second-biggest gain of 27% month-over-month in October 2012.    

The sharp rise in activity is a clear sign that buyers are beginning to come off the sidelines more meaningfully, the result of several interest rate cuts by the Bank of Canada, more than two years of pent-up demand, and plenty of purchase options with inventory at a decade-high. This trend wasn’t limited to the Vancouver Region either, with sales climbing 27% month-over-month in the Central Okanagan and 13% in Greater Victoria. For both of these markets, this was quite a contrast to sales that typically decline in October (by -6% in the Central Okanagan and -0.4% in Greater Victoria). Improving buyer sentiment has found its way to the island and the interior, too.

What’s more, October showed us how much room there is for sales to grow just by getting closer to more average levels of activity. At 34,249 sales through the first 10 months of this year, activity in the Vancouver Region is 22% below its prior 10-year average. However, with sales expanding so strongly last month, October sales were just 7% below the prior 10-year October average. That’s the closest we’ve been to an average month since June 2023. 

With affordability conditions continuing to improve over the next year (via additional Bank of Canada interest rate cuts and new mortgage insurance rules taking effect in December), we at rennie expect 2025 to be a lot more average in the Vancouver Region. In fact, should monthly sales fully return to long-run average levels by spring of next year, we could see total annual sales in 2025 rise between 20% and 25% year-over-year. For a market that has been so depressed for the better part of the last two years, average would be a considerable improvement.

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.