Home sales in the Greater Vancouver area last month were down about 35 percent since last June and 16 percent since May 2022, as homes remained on the market longer and interest rates rose, the region’s real estate board said on Tuesday.
The continuation of relief that the Greater Vancouver Real Estate Board detected last month resulted in 2,444 sales in the region in June, down from 3,762 in the same month last year and 2,918 homes in May of 2022.
Board Chairman Daniel John attributed last month’s sales drop, 23.3% below the June 10-year average of sales, to mortgage rates that have risen in sync with the rises in interest rates and a high inflation rate of 39 years.
“Home buyers have more choice to choose from and more time to make decisions than last year,” John said in a statement.
“Rising interest rates and inflationary concerns are making buyers more cautious in today’s housing market, which is allowing ads to pile up.”
These observations indicate a change in the market, which remains one of the most expensive and most in-demand regions in Canada. However, recent months have seen some of the hot conditions of the last two years of the pandemic begin to fade.
Realtors report that it is now common for buyers to sit on the sidelines of the housing market as they wait to see if conditions shrink further, while sellers take the time to adapt to a market that is not as frantic as before.
This behavior indicates that the market is shifting in favor of buyers, said Tirajeh Mazaheri, an agent at Coldwell Banker Prestige Realty in Vancouver.
Gone are the days when properties were sold in days (or sometimes hours) and got multiple offers.
“Now, they’re sitting in the market for a few weeks or a few months and people don’t touch it,” Mazaheri said. “It’s a very big and drastic change.”
He noted that potential sellers are taking note of this pattern and the Bank of Canada’s promises of more interest rates and are deciding to wait.
The story goes on
“Anyone who can keep their property is keeping it right now, waiting to sell when the market changes again and goes up again, possibly later this year or early next year,” he said. to say.
This resulted in the market seeing 5,256 new listings last month, a drop of about 10 percent from 5,849 in June 2021 and a decrease of 17.6 percent from 6,377 in May 2022.
Those entering the market are still making more money for their homes than last year, but less than months ago.
The composite reference price of the housing price index stood at more than $ 1.2 million last month, an increase of 12.4% over June 2021, a decrease of 2% compared to May 2022 and a decrease of 2.2% over the last three months.
“We’re seeing downward pressure on home prices as we enter Vancouver Metro in the summer due to declining activity from home buyers, not increased supply,” he said. John in a statement.
Part of that drop comes from potential buyers, such as a couple Mazaheri represents, who have lost some of their advantage as interest rates and mortgages rose.
“They said,‘ interest rates have gone up so much that our purchasing power is much lower now ’and again they are discouraged from buying,” Mazaheri said.
“They said, ‘We want to buy something and now our budget, our price is much lower,’ so it has definitely affected a lot of people.”
This report from The Canadian Press was first published on July 5, 2022.
Tara Deschamps, The Canadian Press