The average Metro Vancouver house price in July 2022 was $1,207,400, a 2.3% reduction from the previous month and a 10% gain from the previous year. Greater Vancouver and Greater Toronto have the most expensive property markets in Canada. Over the previous two years, the average property price in Vancouver has risen by $268,000. With this kind of money, one could buy a house in Winnipeg.
Prices for all forms of real estate have continued to decline month after month. From July 2021 to July 2022, the benchmark price for detached houses in Vancouver grew 11% year on year, hitting $2,006,000. This is 2.8% less than the median house price of $2,058,600 in May 2022. The benchmark price for detached houses in Vancouver has risen by $482,200 in the last two years. Prices of detached single-family homes in Edmonton, Calgary, and Montreal usually go up by this much every two years.
After breaking the $1 million barrier for the first time in November 2021, Vancouver townhouse prices increased 16% year on year until July 2022, when they fell 1.7% month on month to $1,096,500. The median unit price increased 11.4% year on year to $755,000 but declined 1.5% monthly. At the end of July 2022, the Metro Vancouver housing market had 10,288 active listings, a 4.4% increase over the previous year. The sum of 3,960 new positions added this month is a 9.5% decrease year on year. The sales of 1,887 properties this month are 43% fewer than the same month last year. This results in an active-to-completed ratio of 18% in Vancouver. The market will move from a seller’s to a buyer’s market during the next four months.
As the COVID epidemic expanded at the beginning of 2020, the Bank of Canada (BoC) resolved to battle the impending economic disaster with enthusiasm. The Bank of Canada began a spending spree in addition to lowering its policy rate to near zero. At the beginning of March 2020, the Bank of Canada’s assets were about $120 billion, and they will peak at $575 billion in March 2021. This $475 billion rise in Bank of Canada assets was funded by the creation of new Canadian dollars. The freshly gained funds were invested in the real estate market in part. Raising housing costs encourages landlords to raise rental prices, despite the fact that they are not included in the official inflation number. As a result, renters’ rents rise, while official inflation statistics lag somewhat.
Now that inflation has reached 8% and the central bank’s credibility is under threat, the Bank of Canada is raising interest rates and withdrawing some of the money created via quantitative easing (QT). The Bank of Canada’s current rate hikes are having a negative impact on Canadian real estate markets. These increases indicate that mortgage rates in Vancouver will continue to rise, making homes in the city less affordable. Mortgage rate increases have had a severe impact on the Vancouver property market.
Because of the rigidity of housing supply, the real estate market between March 2020 and March 2021 provides an appealing investment opportunity. Poor housing may be built in Canadian cities due to property rights limits (zoning). These constraints have resulted in large increases in the cost of housing in Canadian cities. Property rights restrictions, like size and land use rules, limit the number of units that can be built.