Market Highlights For November 2024

Getting to Average?

• Time for the Bank of Canada to cut rates again
• Seasonal slowdown in sales and listings
• Sales in November outpaced November 2022 and 2023
• Sellers not giving up on the idea of being able to make a move

As the year winds down, the mantra continues – keep on cutting your rate Bank of Canada! With a 50-point cut in the Bank of Canada’s key lending rate in the rearview mirror, it’s time to look ahead to repeating that at the next policy meeting on December 11th. With a stagnant economy as indicated by low inflation, poor jobs numbers and a lagging GDP, the only gift to give Canadians this month is lower borrowing costs. The federal government didn’t help that cause by introducing a “GST Holiday” for two months effective December 14th which included alcoholic drinks, prepared foods, toys – and video games and Christmas trees. That along with a promised $250 cheque to annual income earners below $150,000 may only muddy the water on where inflation could go. Lower interest rates would serve Canadians far better in the long run than a cheaper Christmas tree!

There were 2,181 properties sold in Greater Vancouver in November, after 2,632 properties sold in October, 1,852 sold in September, 1,903 sold in August. Total sales in November were higher than the months of November over the last two years when elevated interest rates kept buyers on the sidelines. October was the peak of the fall market and even with the decline in interest rates, the second half of 2024 will slightly lag the first half for the number of homes sold. Surprising in some ways given lower rates should bring more buyers to the table, but likely a sign that spring markets tend to attract more activity, and this will likely mean the trajectory of the spring market in 2025 will be at higher pace compared to 2024. With the Bank of Canada’s final rate announcement for 2024 on December 11, this could set the stage for a bump in sales as 2025 begins. And with changes in mortgage rules that will help first time buyers and those that require insured mortgages, there’s a reason to be optimistic about the real estate market next year. And even more optimism for buyers that have more listings to choose from compared to previous years.

Sales in November were a 28% increase from the 1,702 properties sold last year and a 34% increase from the 1,625 sales in November 2022. There is more optimism in the market compared to where we were the last two years. Activity in the last few weeks of November waned slightly, perhaps due to economic uncertainty following the U.S. Elections and hints that interest rates may not come down as fast due to potential policy changes from the U.S. While November almost always lags October in sales totals, there was a slight sense of buyer and seller hesitation as the month came to an end. It appears that both seller and buyer activity tailed off as the month ended. But this may be short lived once we get into 2025. We may also be seeing the effect of buyers waiting for mortgage rule changes to take effect in December allowing for presale buyers to amortize their mortgage over 30 years and increasing the threshold for insured mortgages to $1.5M.

Sales in November were 13% below the 10-year average, while in October sales were 5% below the 10-year average, although still a significant improvement over the months prior where September sales were 26% below the 10-year average, August 26% below the 10-year average, July at 18% below the 10-year average and June at 24% below the 10-year average. The change in November was partly a seasonal adjustment but more indicative of a tumultuous November of elections, rhetoric and interest rate guessing. Overall, total sales for the year will be close to the number we saw in 2023, mostly likely slightly above. Not an all time low for Greater Vancouver by any stretch, but a sign that after almost three years, people will be on the move in the next few years.

In Greater Vancouver the number of new listings declined in November, largely due to seasonality. While higher than the last two years for the month of November, the total new listings in November were below 2020 and 2021. Many sellers were not giving up on the idea of being able to make a move and while some came to the market with the intention to sell, some sellers are still positioning themselves at prices above where buyers are willing to pay. We’ll see a number of those listings come off as we finish the year. With 3,784 new listings in November, this was a 31% decline from the number of new listings in October and a 10% increase from the number of new listings that came out in November 2023. This after seeing October 2024 generate 17% more new listings than October 2023.

The number of new listings in November were only 5% above the 10-year average after October was 20% above the 10-year average and September was 16% above. Sellers tend to be more reluctant to come on the market as we move through the final months of the year, but this November seemed to show a greater reluctance compared to the previous 7 months. With 1 month left in the year, there will be close to 60,000 new listings in Greater Vancouver for the year though. This is well above the 50,883 new listings that came out in 2023. Will this trend continue in 2025? Buyers certainly hope for that as they take advantage of lower interest rates. There may be upward pressure on home prices if we don’t see a similar pace in new listings when we move into 2025.

New listing activity won’t be helped by government legislation like the Federal Flipping tax, which came into effect in January 2023, and the provincial Flipping Tax which will start on January 1st, 2025. Both will restrict some listings from coming to market as sellers choose to hold onto properties. And with Statistics Canada showing the effects for properties being sold within one year having a minimal impact on the market, such policies are likely to create more confusion in a real estate market that is already overregulated with policy. According to a Financial Times article from December 2, 2024 “It turns out just a little over three per cent of residential properties sold in B.C. in 2021 were owned for less than a year before being resold. Not only is the prevalence of “flipped” sales low, but the economic profits generated by such transactions were negligible, suggesting that flippers are not walking away with exorbitant ill-gotten wealth.” Makes you wonder why such policies are necessary and how this will impact buyers who would prefer to purchase a property that has been renovated so they don’t have to. Transactions needlessly taken out of the market.

There were 13,245 active listings in Greater Vancouver at month end, compared to 14,477 at the end of October. With active listings reaching 14,932 in September, the decline will continue for the remainder of the year with total active listings finishing around 10,500 at the end of 2024 and start 2025. Active listings are only up 21% year over year after being up 46% year-over-year at the end of May.

Months of supply overall stayed steady at 6 in Greater Vancouver. The detached market in Greater Vancouver is up to 8 months supply from 7 while townhomes stayed in the 4’s, inching closer to 3 (technically a seller’s market) and condos increased to 5 months supply from 4.5. The missing middle continues to be a challenge for buyers to get into due to limited product. And with housing starts on the decline, that will continue in the years to come. If you find the townhome you like, don’t wait to buy as prices for those types of homes will increase in the coming years. Last month townhomes and condos were sitting at 30% and 29% above last years’ active listing counts, this month they are at 22% and 24% respectively above last year’s active listings total. Meanwhile detached homes are at 19% above last year compared to October at 20% above the levels at that time in 2023.

Real estate sales in Metro Vancouver keep ebbing back and forth from average to below average. October showed a greater promise to get to an average market, with November falling back a little. With some push from a drop in the Bank of Canada rate this month, and less political distraction it’s entirely possible that the number of sales will push above the average in 2025 when pent up demand finally breaks free of the hesitation we’ve seen.

For other regions, contact Berna Yazgan