Vancouver Real Estate Market Update for June 2024

The Vancouver Life Real Estate Podcast

The Bank of Canada's recent rate cut has been a significant event, widely appreciated by businesses and mortgage holders. This cut was expected by many who hoped for relief amid economic stress. While rate cuts generally indicate a weakening economy, they are crucial for easing monetary policy to support businesses and individuals. The Bank of Canada (BoC) aims to achieve an overnight rate of 2.75% by the end of next year, which means a substantial 200 basis points reduction over the next 18 months. The central bank's next decision is scheduled for July 24, and it has committed to ongoing data analysis before making further moves.

The short-term implications of the rate cut are primarily on market sentiment. Optimism about the economy could spur consumer spending, and pre-approved buyers, previously on the sidelines, may start entering the market. However, with inventory at a four-year high, price increases may be limited in the short term. Lower borrowing costs will make loans more affordable, potentially increasing purchasing power and market activity over the next 6-9 months.

In the long term, lower rates can stimulate economic activity by making credit more accessible, encouraging business investments, and reducing unemployment. If the BoC's rate cuts continue, the economy will begin to see a revival, but careful management is necessary to prevent inflation and supply chain pressures.

A notable factor influencing the BoC's decision was the record $3.72 billion in quarterly net write-offs by the Big 6 banks, indicating significant financial strain. The majority of these write-offs were in personal loans and credit cards, highlighting consumer financial stress.

Detailed May 2024 real estate statistics reveal that total sales were 2,733, down 20% year-over-year and 4% month-over-month. New listings were down 11% month-over-month but a 13% increase year-over-year. Inventory reached 12,908, marking a 7% month-over-month increase and a 39% year-over-year increase!

The sales-to-active ratio has slid to 21%, the first drop in six months, indicating a cooling market. The ratio was 17% for detached homes, 29% for townhomes, and 23% for apartments. Prices continued to rise, with the HPI at $1,212,000, up 0.5% month-over-month and 2.3% year-over-year. The median price was $998,000, near its all-time high, while the average price hit a new ATH at $1,348,000.

The summer market is expected to be dynamic, with potential opportunities for Buyers amid high inventory levels and lowering rates. However, significant price movements are unlikely until inventory tightens and further rate cuts materialize. Buyers may find a short-term window to act without intense competition, but overall market activity is anticipated to rise as borrowing becomes more affordable.

_________________________________

Contact Us To Book Your Private Consultation:

📆 https://calendly.com/thevancouverlife
Dan Wurtele, PREC, REIA

604.809.0834

[e-mail]

Ryan Dash PREC

778.898.0089
[e-mail]

www.thevancouverlife.com