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SUTTON GROUP WEST COAST REALTY
December 2023 Market Recap!
Despite facing the highest borrowing costs in over a decade, Metro Vancouver’s housing market displayed surprising resilience, closing out the year with balanced market conditions. The Real Estate Board of Greater Vancouver (REBGV) reports a total of 26,249 residential sales in 2023, marking a 10.3% decrease from 2022 and a 41.5% decrease from 2021. Although last year’s sales were 23.4% below the 10-year annual sales average, the market showcased strength amid challenging mortgage rate conditions.
Notably, our 2023 forecast anticipated modest price increases, contrary to predictions of price declines by other forecasters. The year concluded with over 5% gains in home prices across all market segments, emphasizing Metro Vancouver’s enduring attractiveness and desirability. Elevated borrowing costs alone did not deter determined buyers from entering the market.
Listings on the Multiple Listing Service® (MLS®) saw a decrease of 7.5% in 2023, totaling 50,893 compared to 55,047 in 2022. Currently, there are 8,802 homes listed for sale in Metro Vancouver, a 13% increase from December 2022. The MLS® Home Price Index composite benchmark price for all residential properties is $1,168,700, reflecting a 5% increase over December 2022.
In 2023, the market faced a challenge of too few homes available relative to the pool of willing and qualified buyers. Sellers hesitated to list their properties early in the year, resulting in lower-than-usual sales initially. However, this scarcity led to near record-low inventory levels in the spring, prompting increased competition and upward pressure on prices.
Looking ahead to 2024, there is anticipation for lower borrowing costs, with bond markets and professional forecasters predicting modest rate cuts in the first half of the year. This could potentially influence the market dynamics and provide further insight into its resilience.
In summary, December 2023 recorded 1,345 residential sales, a 3.2% increase from December 2022. New listings in December totaled 1,327, showing a 9.9% increase from the previous year. The sales-to-active listings ratio for December 2023 is 16%, with individual ratios of 11.1% for detached homes, 18.7% for attached homes, and 19.6% for apartments.
Despite the challenges, detached home sales reached 376, marking a 1.3% increase, and apartment home sales increased by 2.4% to 719. Attached home sales also saw a 7.2% increase, totaling 238.
It’s worth noting that the benchmark prices for detached, apartment, and attached homes have shown positive trends, indicating a resilient and dynamic market.
As we move forward, we will continue to monitor the market closely and provide you with updates on the latest developments. Thank you for your ongoing interest in Metro Vancouver’s real estate market.
Mortgage interest costs, food purchased from stores, and rent continued to contribute to inflation significantly. Excluding food and energy, inflation dropped to 2.7% in October. The Bank of Canada closely monitors the trim and median core rates, which have also eased.
Based on Bloomberg calculations, a three-month moving average of underlying price pressures – closely monitored by the Bank – dropped to an annualized pace from 3.67% to 2.96% in one month.
The recent CPI report shows that tighter monetary policy is effective in reducing the inflation rate. The Bank has forecasted it would reach its 2% target sometime after the second quarter of 2025. According to observations made by economists at BMO, most of the country is showing signs of stability. However, the largest provinces (Quebec and Ontario) have the fastest inflation rates – 4.2% and 3.3% respectively.
Currently, unaffordable housing and the slowing labor market have dampened activity in the real estate market. According to Dr. Sherry Cooper, the spring season will be more promising as long as the Bank continues its rate pause. Given the recent data released, economists are expecting the Bank to hold the policy rate. Dr. Sherry Cooper predicts that the Bank will most likely cut interest rates in the second half of 2024. Stay tuned for more updates!
First Home Savings Account – First-Time Home Buyers
First Home Savings Account (FHSA) is a registered savings plan that is tax-free and designed to help you save and reach your homeownership goal. If you meet the criteria to open up an FHSA, ensure that you do so by January 1st, 2024. The annual contribution limit is $8,000 per person, and you can carry that limit over to 2024.
Empty Homes Tax Declaration – Vancouver ONLY
Vancouver homeowners are required to submit a declaration each year to determine if their property is subject to the Empty Homes Tax. Even if you live in your home, you must make a declaration every year. This is not the same as the Speculation and Vacancy Tax, so make sure you get your declaration in on time to dodge any pesky penalties!
Declaration deadline for 2023: February 2, 2024
Empty Homes Tax payment for 2023: April 15, 2024
Advance Tax Notice – Vancouver ONLY
Property Taxes are due twice per year in the city of Vancouver. Advance tax notices are issued the last week of November, and are due on the second business day in February. Keep an eye out for the Advance Tax Notice in your mail!
The BC rent increase is now in effect, and it’s the largest jump the province has seen in years. The increase was announced by the province, and while many landlords took issue that the rate was set at 3.5%, which is below the inflation rate, it came into effect on January 1 regardless.
The City of Vancouver approved a 7.5% property tax increase. The 7.5% increase can be sourced to 1% to pick up the pace for infrastructure renewal, such as replacing aging sewers, 3% for the Vancouver Police Department (VPD) and 3.5% for funding across all City services.
As of October 1, the country’s population topped 40.5 million, which is an increase of over 430,000 people from July 1, according to Statistics Canada’s latest report.
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