In the closing days of 2023, the Vancouver housing market displayed resilience, navigating challenges such as heightened borrowing costs. According to a recent report by the Real Estate Board of Greater Vancouver, December witnessed a 3.2% surge in home sales compared to the same period in 2022, amounting to 1,345 transactions. However, this figure fell 36.4% short of the 10-year seasonal average, indicative of a market adjusting to evolving conditions.
The report revealed 1,327 new property listings last month, marking a 9.9% rise from the previous year. Despite this increase, new listings remained 22.7% below the 10-year seasonal average. Notably, the composite benchmark home price for Metro Vancouver in December reached $1,168,700, showcasing a noteworthy 5% increase from December 2022. Yet, it also experienced a marginal dip of 1.4% from November 2023.
Andrew Lis, the director of economics and data analytics at the Real Estate Board, emphasized the unpredicted positive trajectory, stating, "In our 2023 forecast, we called for modest price increases throughout the year while most other forecasters were predicting price declines." Lis highlighted the attractiveness of Metro Vancouver as a destination and the resilience of the market, indicating that elevated borrowing costs did not dissuade determined buyers.
Lis attributed the price surge to a scarcity of available homes relative to the pool of willing and qualified buyers. Low inventory levels in spring 2023 compelled buyers into fierce competition for the limited housing options, driving prices upwards.
Realtor Tim Hill from Re/Max All Points Realty suggested that the market is stabilizing after experiencing shifts caused by interest rate hikes. He noted a change in attitudes following the Bank of Canada's decision to maintain its key interest rate amid slowing inflation in September. This stabilization, Hill believes, contributed to increased consumer confidence, evident in a surge of activity in late November and December.
Despite the positive momentum, residential sales for the entire year totaled 26,249, reflecting a 10.3% decrease from 2022 and a notable 23.4% drop below the 10-year annual sales average of 34,272. Reflecting on the year, Lis pondered the potential impact of lower mortgage rates, hinting at the expectation of modest rate cuts in the first half of 2024 as projected by bond markets and professional forecasters.
As the Vancouver housing market navigates the complexities of borrowing costs and inventory challenges, the coming year holds the promise of potential shifts with anticipated lower borrowing costs, offering a glimpse into the market's resilience and adaptability.
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