Vancouver Real Estate Statistics - July 2022 - Interest Rates
Months of Inventory (MOI*) was well in seller's market territory most of 2021 for Vancouver attached homes and apartments. One of the hottest markets was the detached East Vancouver house market while detached Vancouver Westside houses were mostly in a balanced market during that same period. MOI fell between February and March of 2022 but began to rise in April. It should be noted that the attached and apartment markets have remained in seller's markets and appear likely to remain relatively strong.
News of inflation and forecast rising interest rates where likely the cause of rise MOI via reduced sales volumes and increased active listing volumes.
Active listing volumes have been rising since the start of 2022 and they may continue to do so for the next several months.
Sales volumes begun trending downwards in April as well. With dramatic interest rate hikes and more increases forecast, many people are worried about what will happen in the Vancouver Real Estate Market and are delaying buying. This may or may not prove to be a mistake. Inflation is up but the job market is also super hot. Cenntral banks' willingness to push interest steeply up are a fairly good indicator that they beleive the economy can handle it. With interest rates rising and money supply contracting we are unlikely to see prices rise substantially but with most mortgage holders being well employed, we are also not likely to see prices plummet either.
Vancouver Westside sale prices have been slowly trending upwards since early 2020 but have still not reached their previous high points in 2016. The 2016 market was driven by more foreign capital than we have seen in this market. Vacancy taxes may have curbed some of this demand. Anecdotally, a client of mine in Shanghai has suggested that the Chinese handling of Covid (severe lockdowns and huge numbers of business failures) may see a flight of capital to safer harbours - like Vancouver. Many Canadian citizens and permanent residents of Canada live in China because there have been great earning opportunities there. With an extremely stagnant economy in China there may be little incentive to stay there in the near term.
Sale prices for East Vancouver detached homes, by contrast, rose more steaply and past the previous 2016 high points in early 2021. The new May 2022 Eastside HPI sale price may remain a high point for some time. I beleive that the East Vancouver house market has been largly driven by local people seeking homes to live in. The top of this market may have already been coming prior to rising interest rates as buyer's were reaching qualification limits.
By Sam Wyatt - Vancouver Realtor.
*Months of Inventory (MOI) is a measure derived from the number of active listings during a given month divided by the number of sales that month. It indicates the theoretical length of time it would take to sell all of the properties on the market if nothing changed. Historically, 0-5 months of inventory has generally implied upward price pressure ("Seller's Market"), 5-8 months of inventory has indicated a flat market with respect to pricing ("Balanced Market") and over 8 months of inventory has, for the most part, precipitated downward price pressure ("Buyer's Market").