REBGV Market Update For May 2022 – Interest Rates And Lack Of Supply Responsible For Cooling The Market
The overall message obtained from the May Monthly Market Report released by the Real Estate Board of Greater Vancouver (REBGV) was that home sale activity had returned to typical seasonal levels – a far cry from what was experienced a few months ago.
In his comment on the report, Daniel John, Chair of the REGBV said, “With interest rates rising, home buyers are taking more time to make their decisions in today’s housing market. Homebuyers have been operating in a frenzied environment for much of the past few years. This spring is providing a calmer environment, with fewer multiple offer situations, which allow buyers to explore their housing options, understand the changing mortgage market, and do their due diligence.”
He added “Upward pressure on home prices has begun to ease in the housing market over the last two months. Where home prices go next will depend on the housing supply. While we are beginning to see modest increases in home listings, we still need housing supply totals to more than double to bring the market close to balanced territory.”
Realtors registered 2,918 residential property sales in May 2022 for the region. This represented a 31.6% decrease from the same period last year in which 4,268 sales were recorded, and a decrease of 9.7% from April 2022 when 3,232 homes were sold.
The number of detached properties sold was 793 a 44.1% decrease from May 2021 (1,419 sales).
The number of apartments sold was 1,605, 21.7% less than May 2021 (2,049 sales).
The number of attached properties sold was 520, 35% less than May 2021 (800 sales).
May 2022 saw 6,377 new listings of detached, attached and apartment properties added to the Multiple Listing Service (MLS) in Metro Vancouver. This was a 10.5% decrease compared to the 7,125 homes listed in May 2021, and a 4.4% increase compared to April 2022 when 6,107 homes were listed. The total number of homes listed on the MLS system in Greater Vancouver in May was 10,010, which was an 8.8% decrease compared to the previous year when 10,970 homes were listed, and a 13.8% increase compared to April 2022 when 8,796 homes were listed.
This ratio gives a better understanding of the relationship between supply and demand in the market. Downward pressure on home prices can occur when the ratio dips below 12% for a sustained period, and home prices can experience upward pressure when the ratio is above 20% for sustained periods.
For all property types, the ratio in May 2021 was 29.2%. When broken down by property types, the ratio was:
- 18.3% for detached homes
- 35.5 % for townhomes – firmly in seller market territory
- 38.1% for condominiums – firmly in seller market territory
For the month of May, The MLS Home Price index composite benchmark price for all residential properties in Metro Vancouver was $1,261,100. This was a 14.7% increase over May 2021 and a 0.3% decrease when compared to April 2022. The steady price increases have begun to ease over the past few months, but the lack of choice remains a key factor.
While interest rates are edging up, the real estate market is very buoyant – don’t expect otherwise. If you are buying or selling a home, you need to get in touch with an experienced real estate company such as ours and let us make your dream come true. Contact us by email or call us on 604 913 1000.