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Both cities reported strong sales figures in October
Published on November 5th, 2024 • Last updated 3 hours ago • 3 minutes reading time
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Homes are seen in a neighborhood on Burnaby Mountain in Burnaby, BC. In Vancouver, seasonally adjusted home sales rose 27.2 per cent from September to October, the strongest monthly increase since the pandemic-driven recovery in June 2020. Photo by Darryl Dyck /The Canadian Press
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Recent real estate data from Calgary and Vancouver shows a noticeable increase in sales, raising questions about whether the Bank of Canada's recent interest rate cuts are revitalizing the country's real estate market. After months of sluggish activity, both cities reported strong sales numbers in October, suggesting buyers may be re-entering the market as borrowing costs fall.
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In Vancouver, seasonally adjusted home sales rose 27.2 per cent from September to October, the strongest monthly increase since the pandemic-driven recovery in June 2020, according to the National Bank of Canada Financial Markets. The Real Estate Board of Greater Vancouver (REBGV) also found that sales increased 31.9 per cent compared to last year, with sales of all property types increasing by double digits – single-family homes increased by 26 per cent, condos increased by 33.4 per cent. and terraced houses by 40.7 percent.
“Expectations of faster interest rate cuts have likely helped support the housing market,” the National Bank report said, highlighting that interest rate trends may be playing a crucial role in the recent rise.
Commenting on the apparent shift in buyer sentiment, Andrew Lis, director of economics and data analytics at Greater Vancouver Realtors (GVR), said: “Typically, cuts in mortgage rates increase demand, and the strong sales numbers in October suggest that buyers may finally be respond to this.” Lower borrowing costs after months of waiting.” He also pointed out that the Vancouver market is starting to show strength again after a lengthy period of slowdown.
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The Calgary market also showed signs of a comeback.
According to the Calgary Real Estate Board (CREB), seasonally adjusted home sales rose 9.4 per cent month-over-month in October, reaching their highest level since January. The growth was largely driven by demand for higher-end properties, with homes priced above $600,000 seeing significant increases.
Ann-Marie Lurie, chief economist at CREB, pointed out the uneven distribution of demand. “Demand for housing in our market remained relatively strong at the start of the fourth quarter,” she said. However, Lurie added that supply constraints continue to impact lower-priced segments, which could limit further sales gains unless inventory increases.
The inventory development also differs between the two cities, although the number of new listings increased in both markets in October. In Vancouver, new listings rose 2.3 percent month-over-month while active listings fell 0.2 percent, bringing the market closer to balance.
The Calgary market remains tight in the low to mid price range, with inventory improving compared to last year but still limited. Lurie noted that “single-family homes priced under $700,000 have less than two months of inventory,” showing how limited supply in more affordable segments is supporting the seller's market in those categories.
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Despite these positive sales figures, pricing data remains mixed. In Vancouver, the composite reference price for all residential properties decreased by 1.9 percent compared to October 2023, settling at $1,172,200. Calgary's benchmark price rose 4.5 per cent year-over-year to $592,500, driven by strong demand at the high end of the market.
With further interest rate cuts expected in the coming months, the real estate market could gradually continue to recover. However, Lis warns: “A single data point does not make a trend.”
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