Vancouver home sales in June down 35% from a year ago, 16% from May: advice

Home sales in the Greater Vancouver area last month fell about 35% from last June and 16% from May 2022 as homes remained on the market longer and interest rates rose, a announced Tuesday the real estate board of the region.

The continued easing that the Real Estate Board of Greater Vancouver detected last month resulted in 2,444 sales in the area in June, compared to 3,762 in the same month a year earlier, and 2,918 homes in May 2022.

Board chairman Daniel John attributed last month’s drop in sales – 23.3% below June’s 10-year sales average – to mortgage rates that rose along with the rises interest rates and high inflation for 39 years.

“Homebuyers have more choices and more time to make decisions than they did last year,” John said in a statement.

“Rising interest rates and inflationary concerns are making buyers more cautious in the current real estate market, allowing listings to pile up.”

Such observations signal a shift in the market, which remains one of the most expensive and in-demand regions in Canada. However, recent months have seen some of the harsh conditions of the last two years of the pandemic begin to fade.

Estate agents report that it is now common for buyers to sit on the fringes of the housing market waiting to see if conditions ease further, while sellers take time to adjust to a market which is no longer as frenetic as it once was.

Such behavior indicates the market is moving in favor of buyers, said Tirajeh Mazaheri, Coldwell Banker Prestige Realty agent in Vancouver.

Gone are the days of properties being sold within days – or sometimes hours – and getting multiple offers.

“Now they sit in the market for a few weeks to a few months and people don’t touch them,” Mazaheri said. “It’s a very important and radical change.”

She noticed that potential sellers take note of this trend and the Bank of Canada’s promises to raise interest rates in the future and decide to wait.

“Anyone who can hold onto their property is holding onto it right now, waiting to sell when the market changes again and picks up, maybe late this year or early next year,” she said.

This translated to 5,256 new market listings last month, down about 10% from 5,849 in June 2021 and down 17.6% from 6,377 in May 2022.

Those entering the market are still making more money for their homes than they did last year, but less than they would have made months ago.

The composite benchmark home price index stood at more than $1.2 million last month, up 12.4% from June 2021, down 2% from June 2021. compared to May 2022 and a decrease of 2.2% over the last three months.

“We are seeing downward pressure on home prices as we enter summer in Metro Vancouver due to lower homebuyer activity, not increased offer,” John said in a statement.

Some of that decline came from potential buyers, like a couple Mazaheri represents, who lost some of their edge as interest rates and mortgage rates rose.

“They said, ‘interest rates have gone up so much that our purchasing power is much less now’ and again they are being discouraged from buying,” Mazaheri said.

“They said, ‘We want to buy something and now our budget, our price is much lower’, so certainly that’s impacted a lot of people.”

This report from The Canadian Press was first published on July 5, 2022.

Tara Deschamps, The Canadian Press