Metro Vancouver* housing market experienced a year of caution in 2022. Due to rising borrowing costs fueled by the Bank of Canada’s ongoing battle with inflation.
REALTOR®’S registered 28,903 home sales on MLS® in 2022. A 34% decrease over 2021 and 13% below the 10-year average.
Sellers listed 53,865 on the MLS® in 2022. A 14% decrease compared to 2021 and 3% below the region’s 10-year average. 2022 ended with 7,384 active listings across the region.
Despite the recent increases to mortgage rates and the slow down in sales activity inventory levels remain low by historical standards which has limited downward pressure on home prices.
One way we measure the relationship between supply and demand in our market is the sales-to-active listings ratio. This ratio measures the number of homes available for sale against the number of homes sold throughout the month.
This gives us a good rule of thumb to see if supply is keeping up with demand. In typical market conditions when this ratio dips below 12% for a sustained period it indicates that supply is outpacing demand and prices are more likely to decline. When it surpasses 20% demand is outpacing supply and prices are more likely to increase.
2022 ended with this ratio at 18% for all homes. By property type the ratio was 12% for detached homes, 20% for townhomes and 22% for condominiums.
The MLS® HPI benchmark price for all housing types in Metro Vancouver sits at $1,114,300 (Dec 2022). This is a 3% decrease over last year. Prices have declined 3.3% from last year and 9.8% over the last 6 months.
Looking ahead to 2023, the consensus amongst most economist and professional forecasters is that the Bank of Canada is likely near the end of the current interest rate tightening cycle. Mortgage rates may remain elevated for some time, however, as inflation remains a concern for the Bank of Canada limiting their ability to decrease the policy rate in the near term. We will watch the 2023 Spring market closely to see if buyers and sellers have adjusted to the higher borrowing costs and are participating more actively in the market.
*Metro Vancouver includes: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.