Home prices in Greater Vancouver continued to rise in May, surprising even the real estate board, but fading sales in the last two weeks of May and an increase in new listings could moderate price increases, agents say.
The composite benchmark price for all residential properties in Greater Vancouver in May hit $1,188,000, up 6 per cent from January, with detached house prices at $1,953,600, an increase of 1.3 per cent from a month earlier, reports the Real Estate Board of Greater Vancouver (REBGV).
Since the first of this year, the benchmark price of a detached house has increased by $152,300.
“Back in January, few people would have predicted prices to be up as much as they are –ourselves included,” said Andrew Lis, REBGV’s director of economics and data analytics. “Our forecast projected prices to be up modestly in 2023 by about 2 per cent at year-end. Instead, home prices are already up about 6 per cent or more across all home types at the midway point of the year.”
The REBGV reports that total home sales were 3,411 in May, a 15.7 per cent hike from the 2,947 sales recorded in May 2022, and the first year-over-year sales increase seen since 2021. Sales were just 1.4 per cent lower than the 10-year seasonal average and have now increased month-over-month for six months straight.
While the real estate board sees the “housing market heating up as summer arrives” a close look at May shows sales began fading at month’s end. Unlike March and April where the second half of the month outpaced the first half, at the mid-point of May there were 1,759 sales and by the end of the month that number less than doubled.
Meanwhile, new listings in May, at 5,776, were up from 4,339 a month earlier and from 4,427 in March 2023.
The combination of slowing sales and an increase in properties for sale could stabilize the market going into the summer, some agents say.
“We have likely seen the high of the market and sales will remain at this level for June or pull back slightly as the summer holidays kick in starts to distract buyers and sellers alike,” said Kevin Skipworth, managing partner with Dexter Real Estate Associates in Vancouver.
But total listings – at 9,293 properties for sale as of end of May – remains a concern, he added.
“Overall, Greater Vancouver remains with just a three-months supply of listings – and with the current number of sales we’d need to double the number of active listings to get into a balanced market,” Skipworth said.
Across all property types, the sales-to-active listings ratio for May 2023 was 38.4 per cent. By property type, the ratio is 28.5 per cent for detached homes, 45 per cent for townhomes, and 45.5 per cent for condo apartments.
Sales of condos led the May market, posting 1,730 sales, with the benchmark price up 1.1 per cent month-over-month to $760,800.
“You don’t have to squint to see the reason prices continue to increase. The fundamental issue remains that there are more buyers relative to the number of willing sellers in the market. This is keeping the amount of resale homes available in short supply,” Lis said.
