A just-released report on rising interest rates is giving would-be home buyers and sellers an idea of the impact already being seen in the Vancouver area, and the results vary by city.
Brokers with HouseSigma say the those involved in the local real estate market are seeing price dips, longer listing periods and some homes not selling at all.
In a report Thursday, the company said the median sale price in the Vancouver area overall dipped to $922,000 in May.
That’s a 12.11 per cent decrease from what sellers were getting for their homes back in February ($1,049,000).
HouseSigma blames the Bank of Canada’s overnight lending rate, which was recently increased by 0.5 per cent, up to 1.5 per cent.
It’s the third hike this year, following similar moves in March and April. Those behind the report tried to track the impact in the country’s hottest housing market, and found that, although some buyers had already locked in a lower rate at the beginning of the year, the data suggests changes are underway.
Looking at the median sold price in the region overall, it was close to the $1.05-million mark before the rate hikes began.
In March, that median dropped to $980,000, and by April it was $976,000, followed by the dip again in May.
NOT ALL CITIES IMPACTED EQUALLY
According to the June 2 report, some communities saw more of a decrease than others. While the average for the region is a 12.11 per cent decrease, sellers of detached homes in Maple Ridge got nearly 15 per cent less for their houses in May than in February.
New Westminster, too, saw a shift in favour of buyers with a 14.71 per cent change.
Also impacted more than the average were sellers in Surrey, while those in Langley were close to the average.
Port Moody sellers too saw a double-digit decrease, though below average.
“We’re now starting to see the full effect of rising interest rates on buyers and sellers’ habits,” HouseSigma broker Hao Li said in a news release about the report.
“These double digit dips in detached home averages in areas like Surrey and Maple Ridge highlight the pullback that’s happening in B.C.’s market.”
But the data also suggested it’s still good to be a seller in one area: West Vancouver.
In that community, the median sale price was actually up quite a bit from February. Buyers paid a median of $3.52 million, up 13.55 per cent from what they paid in February.
In addition to what homes are selling for, the report looked at whether they’re selling at all.
Terminated listings, meaning listings that essentially timed out – they haven’t sold during a specified time and have been pulled down – were up a whopping 121 per cent from February.
According to HouseSigma, 2,331 homes fell into this category back then. By March, 3,095 listings were terminated. In April: 3,590. Another 5,141 listings were terminated in May.
Li said there are a few reasons for this, one of which is sellers deciding the offers they got weren’t good enough. They can then choose to pull it down and re-list the property to attract a new set of potential buyers.
Sometimes, too, sellers will remove the property from the market because it’s sat for a while, thinking maybe they’ll try again when conditions change or at a different time of year.
WHAT IT MEANS
According to Li, this suggests a sharp turn from the height of the pandemic when buyers scrambled to find options, “raising prices at a pace we’ve never seen before.”
Now, it looks like buyers don’t feel that rush, and are thinking that they may get a deal or find a better option if they wait, Li said.
“Since the Bank of Canada started raising rates, buyers have steadily taken a more ‘wait-and-see’ approach to buying a home, and sellers have had to adjust their sale price expectations,” Li said.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
