Vancouver home prices end year up 5% as sales and listings slide

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Vancouver's real estate market exceeded expectations in 2023 and prices ended the year in positive territory despite the highest borrowing costs in over a decade.

The Real Estate Board of Greater Vancouver (REBGV) reported Jan. 3 that the composite benchmark house price index for all residential properties in Vancouver ended the year at $1,168,700, down 1.4 per cent from November but up five per cent as December 2022.

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Andrew Lis, director of economics and data analysis at REBGV, said price increases were a sign of market resilience.

“In our 2023 forecast, we called for moderate price increases throughout the year, while most other forecasters predicted price declines,” Lis said in the report. “The fact that we ended the year with home prices up more than five per cent across all market segments shows that Vancouver continues to be an attractive and desirable destination and that increased borrowing costs alone are not enough to deter buyers. to decide to enter this market.”

However, this price increase was accompanied by a sharp decline in sales.

According to the board, 26,249 residential property sales were made in 2023, a decrease of 10.3 percent compared to 2022 and 41.5 percent below the 2021 numbers. Total sales were also 23.4 percent below the 10-year annual average 34,272.

The number of properties listed on the Multiple Listing Service (MLS) also fell this year to 50,893, a 7.5 percent decrease from 2022 and a 20.2 percent decrease from 2021. That number was also 10.5 percent lower 10-year total annual average 56,868.

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There are currently 8,802 homes listed for sale in Vancouver's MLS system, up 13 per cent from the same period last year and 0.3 per cent higher than the 10-year seasonal average of 8,772.

Lis said a shortage of available homes compared to qualified buyers is the prevailing theme of 2023. Sellers' reluctance to list their properties early in the year initially led to fewer sales, but that led to near-record low inventory levels in the spring. This shortage drove up prices as buyers competed for the limited number of homes.

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He also speculated that 2023 might have ended differently had mortgage rates been lower, with the potential for a pick-up in activity now pushed back to 2024.

“Bond markets and professional forecasters believe that borrowing costs are likely to fall, with moderate interest rate cuts expected in the first half of the new year,” Lis said.

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