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September 2022: Metro Vancouver Saw More Home Sellers and Fewer Buyers

September 2022 market update

Home sellers were more active in Metro Vancouver’s* housing market in September 2022 while home buyer demand remained below the region’s long-term averages.

Source: REBGV

September 2022 market update

Source: REBGV

 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,687 in September 2022, a 46.4 per cent decrease from the 3,149 sales recorded in September 2021, and a 9.8 per cent decrease from the 1,870 homes sold in August 2022.

Last month’s sales were 35.7 per cent below the 10-year September sales average.

 

“With the Bank of Canada and other central banks around the globe hiking rates in an effort to stamp out inflation, the cost to borrow funds has risen substantially over a short period. This has resulted in a more challenging environment for borrowers looking to purchase a home, and home sales across the region have dropped accordingly.”

– Andrew Lis, REBGV director, economics and data analytics

 

There were 4,229 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in September 2022. This represents an 18.2 per cent decrease compared to the 5,171 homes listed in September 2021 and a 27.1 per cent increase compared to August 2022 when 3,328 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,971, an eight per cent increase compared to September 2021 (9,236) and a 3.2 per cent increase compared to August 2022 (9,662).

“With fewer homes selling and new listings continuing to come to market, inventory is beginning to accumulate, providing buyers with more selection compared to last year. With more supply and less demand within this market cycle, residential home prices have edged down in the region over the last six months,””

– Lis said.

 

For all property types, the sales-to-active listings ratio for September 2022 is 16.9 per cent. By property type, the ratio is 12.4 per cent for detached homes, 18.4 per cent for townhomes, and 20.9 per cent for apartments.

 

September 2022 market update

Source: REBGV

 

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,155,300. This represents a 3.9 per cent increase over September 2021 and a 2.1 per cent decrease compared to August 2022.

Sales of detached homes in September 2022 reached 525, a 44.7 per cent decrease from the 950 detached sales recorded in September 2021. The benchmark price for a detached home is $1,906,400. This represents a 3.8 per cent increase from September 2021 and a 2.4 per cent decrease compared to August 2022.

Sales of apartment homes reached 888 in September 2022, a 45.2 per cent decrease compared to the 1,621 sales in September 2021. The benchmark price of an apartment home is $728,500. This represents a 6.2% per cent increase from September 2021 and a 1.6 per cent decrease compared to August 2022.

Attached home sales in September 2022 totalled 274, a 52.6 per cent decrease compared to the 578 sales in September 2021. The benchmark price of an attached home is $1,048,900. This represents a 9.1 per cent increase from September 2021 and a 1.9 per cent decrease compared to August 2022.

 

*  Areas covered by the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

 

CLICK HERE – Full REBGV September 2022 Market Update

Vancouver BC – October 4, 2022

Have a look at the REBGV September 2022 Market Update Insights!
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Bank of Canada Raises Benchmark Interest Rate to 3.25%

Bank of Canada Raises Benchmark Interest Rate to 3.25%

Bank of Canada Raises Benchmark Interest Rate to 3.25%

The Bank of Canada announced on Wednesday that it was hiking its trendsetting interest rate by three-quarters of a percentage point. This is the latest move by the central bank in its mission to rein in runaway inflation, which has risen to its highest level in decades.

The bank’s rate impacts the rates that Canadian consumers and businesses get from their banks on things like mortgages, lines of credit and savings accounts. At the start of the year, the bank’s rate was 0.25 per cent. After Wednesday’s move, it’s now at 3.25 per cent. That’s the highest level for the bank’s rate since early 2008, before the financial crisis.

The benchmark overnight interest rate was increased by 75 basis points to 3.25% on Wednesday by a group of policymakers led by Governor Tiff Macklem, giving Canada’s central bank the highest policy rate among the major industrialized countries. In the upcoming months, officials said they intend to keep hiking rates.

This move was widely expected by economists, and it means that anyone with a variable rate loan is likely to see their payment increase in the coming days. The bank reiterated its commitment to price stability and said that it will continue to take action as required to achieve the two percent inflation target.

The discussion now shifts to Macklem’s next steps, as the central bank attempts to determine how high borrowing costs will need to rise in order to combat sticky inflation. Markets are pricing in a strong possibility of another half-point increase in October.

While Canada’s inflation rate fell slightly from its 30-year high of 8.1 percent last month, the bank noted in its decision that the majority of that drop was due to lower gas prices, while the rest of the economy saw “a further broadening of price pressures, particularly in services.”

Bank of Canada Raises Benchmark Interest Rate to 3.25%

Chart Source : Bank of Canada 

That persistent underlying inflationary pressure is a major reason why “the policy interest rate will need to rise further,” according to the bank, which also stated that it “remains resolute in its commitment to price stability and will continue to take action as necessary to achieve the 2% inflation target.”

Anyone with a variable rate loan will likely see their payment adjust in the next several days to keep up with the central bank’s move as a result of the action. RBC and TD, two of Canada’s largest banks, increased their prime lending rates by the same amount as the federal reserve on Thursday and other banks are expected to follow suit.

 

Since interest rates on variable rate loans increased from below two percent at the beginning of the year to over four and, in some cases, five percent today, many mortgage holders have already felt those hikes several times this year.

The majority of variable rate mortgages provide borrowers the choice to maintain a fixed payment regardless of rate changes. With rising interest rates, less of each payment is applied to principal reduction and more and more is applied to interest. Even if the size of the regular payment is the same, this lengthens the loan.

The Royal Bank of Canada, the country’s largest lender, said this week that it has around 80,000 mortgages on its books that are poised to reach their trigger point. According to the bank’s most recent letter to some of its mortgage holders, which was acquired by CBC News, “Our data show you may be approaching your Triggering Interest Rate – a moment when your regular payment is no longer enough to cover the interest portion on your mortgage.” Your mortgage payment will automatically increase if this situation arises, the letter stated.

 

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