Vancouver’s housing market defied expectations in 2023 with prices ending the year in positive territory despite the highest borrowing costs in over a decade.
The Real Estate Board of Greater Vancouver (REBGV) reported on Jan. 3 that the composite benchmark home price index for all residential properties in Vancouver ended the year at $1,168,700, down 1.4 per cent from November but up five per cent from December 2022.
Andrew Lis, director of economics and data analytics at REBGV, said price gains were a sign of the market’s resilience.
“In our 2023 forecast, we called for modest price increases throughout the year while most other forecasters were predicting price declines,” Lis said in the report. “The fact that we ended the year with five-per-cent-plus gains in home prices across all market segments demonstrates that Vancouver remains an attractive and desirable destination, and elevated borrowing costs alone aren’t enough to dissuade buyers determined to get into this market.”
That price strength however, came amid a sharp decline in sales.
According to the board’s data, 26,249 residential sales were made in 2023, a 10.3 per cent decrease compared to 2022 and 41.5 per cent below 2021 figures. The total was also 23.4 per cent below the 10-year annual sales average of 34,272.
The number of properties listed on the Multiple Listing Service (MLS) for the year also fell to 50,893, a 7.5 per cent decrease from 2022 and a 20.2 per cent decrease from 2021. This number was also 10.5 per cent below the 10-year total annual average of 56,868.
There are currently 8,802 homes listed for sale on Vancouver’s MLS system, up 13 per cent from the same time last year and 0.3 per cent above the 10-year seasonal average of 8,772.
Lis said a shortage of available homes relative to qualified buyers was the dominant story of 2023. Seller reluctance to list their properties early in the year led to fewer sales initially, but this resulted in near record-low inventory levels in the spring. This scarcity drove prices up as buyers competed for the limited number of homes.
He also speculated that 2023 might have closed differently if mortgage rates had been lower, with the potential for activity to pick up now pushed ahead to 2024.
“Bond markets and professional forecasters are projecting lower borrowing costs are likely to come, with modest rate cuts expected in the first half of the new year,” Lis said.
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