August residential real estate market statistics have been released by the Real Estate Board of Greater Vancouver and it’s evident that the summer has ended on a more quiet note than usual, as both sales and listing activity takes a pause.
Sale prices as a percentage of list prices are down across all product types, while days on market have significantly increased with townhomes leading the way at a 35% jump, followed by condos and detached homes at 33.3% and 24% respectively. Although these shifts are typical for the end of the summer, it’s important to note that it may also be a part of a larger trend that we’re seeing this year; The Bank of Canada’s most recent increase in interest rates, as well as concerns about an impending recession, are all contributing to this lack of activity, which is beyond just a “seasonal norm’.
Benchmark prices saw a month-over-month decrease across all home types as well, however they remain well above where they were the same time last year; the month-over-month changes were as follows:
- Townhomes: -2.5%
- Detached homes: -2.3%
- Condos: -2%
We anticipate that the residential market will remain quiet as potential purchasers navigate the market’s volatility and wait for their borrowing power to recover, especially considering the expectation that we will see another interest rate hike before the end of the year.
What does this mean for Development land?
Every tale has two sides, and this market is no different for development land in Metro Vancouver. There are buyers who are being more cautious (or possibly experiencing the sting of the interest rates) and those who are more bullish during this period, as we mentioned last month.
The bullish group is keen to sign contracts for sites while there is still the chance for (somewhat) more lenient conditions, particularly if they can secure a longer completion period. The other side of this story is a product of the times; increased interest rates to battle inflation. Those attempting to secure financing for development project completions in the short to mid-term may notice a significant impact as banks and private lenders are cutting back and being much tighter when evaluating projects for credit qualification. Where is this headed? We have yet to see, but we are monitoring the market closely and will continue to keep you informed.
Please note: areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.
View the Real Estate Board of Greater Vancouver’s entire stats package for August 2022 here.
This representation is based in whole or in part on data generated by the Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.