01/12/2024
The Real Estate Board of Greater Vancouver's December 2023 stats are now in.
To no surprise, in the lead-up to the holidays, sales in December were down significantly month-over-month. What is encouraging news is that benchmark prices remain stable in the face of high interest rates. Low inventory levels continue to help prop up prices. Sales-to-Listing ratios indicate that we are in a balanced market.
So what's in store for 2024? We expect 2024 to be a transition year as higher interest rates continue to slow down the economy, making way for lower inflation.
The Canada Mortgage and Housing Corporation says only about 300,000 homeowners have renewed their mortgages at these new higher rates. Over the next two years, another 2.2 million Canadian households will be hit with significantly higher rates. That statistic alone should help spur the Bank of Canada on to start cutting interest rates in the first half of this year.
This doesn't mean that the real estate market is going to take-off anytime soon, but we do believe the worst is behind us. Consumers are used to finding a cause for optimism in these down markets. And if you peek past the first half of the year, you can just start to make out the picture of an economy getting back on track in the second half of 2024.
Based on a 10-year sales average, we estimate that over 15,000 homes sales didnโt occur that otherwise would have over the past 2 years. With projected falling interest rates, this demand will eventually become unleashed causing a wave of activity.
Note: All data is based on month-over-month. Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period. While home prices often experience upward pressure when it surpasses 20% over several months.