Home-buying activity in Greater Vancouver was strong out of the gate in 2023, with the Bank of Canada‘s decision to temporarily pause rate hikes prompting a burst of activity in late January. The market continued on an upward trajectory until the second week in May when demand started to moderate, as thoughts turned to summer. The surprising rate hike in June stymied an already slowing market and pre-approved buyers with rate holds ramped up their search for housing.
To date, just over 14,300 properties have sold, down just over 23 per cent from the 18,647 units sold during the same period in 2022.
While benchmark prices have fallen short of year-ago levels, values have battled back to some extent over the past six months in Greater Vancouver, climbing eight per cent to $1,203,000 in June.
Move-Up Buyers Particularly Active in Vancouver Housing Market
Buyers looking to upgrade in the Vancouver housing market have come out in droves this year, given pent-up demand that continued to build while they were sidelined in late 2022. Vancouver’s suburbs have experienced the strongest demand, with detached homes in the $1.2 million to $1.5 million price range most sought-after. Space is still a major factor with suburban buyers, many of whom are looking to accommodate growing families. Strata attached properties in Langley’s Willoughby Heights and Walnut Grove have been a popular choice with young families, given the area’s proximity to Vancouver Proper. Maple Ridge has also experienced an upswing in buyers looking to trade up, although commute times are considerably longer. In Vancouver Proper, move-up buyers required around $1.5 million to trade-up to a larger townhome or half duplex this year. Some detached product is available in certain areas at the $1.5 million price point, but most listed for sale are being sold for land value only.
Inventory remains one of the greatest challenges to buyers in Vancouver this year, with new listings falling short of the 10-year average, despite edging up year-over-year in June. Financing has been difficult but not insurmountable. Equity gains over the past five years have been a boon to move-up buyers, many who have had an easier time qualifying for a mortgage. Some move-up buyers, however, have moved farther afield to qualify, expanding their search to peripheral areas such as Chilliwack and Mission where housing values are more affordable.
The Greater Vancouver housing market is expected to see a seasonal slowdown in the coming months, with the market is forecast to pick up again in the fall. Interest rates will play a critical role moving forward, dictating buyer behaviour on the mainland. If further rate hikes are implemented, the slowdown will be likely be extended. However, if rates are paused or decline, home-buying activity in Greater Vancouver is expected to rebound once again.