Vancouver’s housing market stabilized in August as higher borrowing costs put a damper on the city’s steady growth. The benchmark price for a home in the city was $1,208,400 in August, down 0.2% from July, and 2.5% higher year-over-year, according to the Real Estate Board of Greater Vancouver.
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Market Conditions Stabilize as Summer Slows Sales and Price
The typical seasonal trend is for the market to calm down as the summer ends as Canadians prioritize soaking up the last few weeks of summer. Price gains have cooled and sales activity has slowed in Vancouver due to both the time of year and the impact of higher borrowing costs. The number of sales fell from 2,455 in July to 2,296 in August, a decline of 6.9%. This figure is also a staggering 13.8% lower than the 10-year seasonal average.
Even though sales numbers have been declining on a monthly basis, activity has improved compared to last year, as sales were up 21.4% on a year-over-year. Despite the higher interest rates, buyers are still willing to jump into the market in comparison to last year where many took to the sidelines as rates began increasing.
“As fall approaches, sales have caught up with the price gains, but both metrics are now slowing to a pace that is more in line with historical seasonal patterns, and with what one might expect given that borrowing costs are where they are,” said Andrew Lis, REBGV director of economics and data analytics.
Affordability is a Key Factor in Vancouver
Notably, the best-performing property type was also the most affordable. Apartment sales were up by 27.4% compared to August of last year, marking the greatest sales improvement of any property type, from 997 properties trading hands to 1,270. The benchmark price for an apartment is $770,000, just 0.2% down from July, while also seeing the highest year-over-year growth in price at 4.4%. Detached and attached homes have experienced price growth of 3.3% and 3.9% respectively from August of last year, with only an extremely mild decline of 0.1% in the attached sector from July. Detached homes have interestingly seen a 0.3% increase month-over-month, likely due to the high demand for a home type low in availability.
On a monthly basis, apartments also had the smallest sales decline, falling by just 0.8%, with 1,270 homes trading hands in August compared to 1,281 in July. Detached home sales fell by 15.2% to 681 and attached by 10.4%. In a city where the benchmark home price is over $1,200,000 and interest rates are at their highest in a decade, it’s no surprise that buyers are drifting towards the most affordable home type.
If you’re looking for the perfect Vancouver home, reach out to us to get in touch with a local agent who can help answer questions you may have about the process.
