According to recent statistics published by the Real Estate Board of Greater Vancouver (REBGV), the Greater Vancouver region has seen an improvement in home sales, indicating a resurgence of homebuyer confidence. The region registered 2,721 residential home sales in April, an 8.4% increase from the 2,511 recorded in March.
However, despite the improvement, the total number of sales is still lower than the 3,281 recorded in April 2022 and the 10-year average of 3,249. Moreover, the total inventory of active listings in the region is now at 8,333, a decrease from the 9,176 recorded this time last year and the 10-year average of 11,117.
Andrew Lis, Director of Economics and Data Analytics at REBGV, attributes the short-term improvement in home sales to the return of homebuyers with confidence in the market after a challenging year.
The sales-to-new-listings ratio and the sales-to-active-listings ratio are two quantitative indicators that determine the direction in which the market is leaning. A ratio of 40% or lower is viewed as favoring buyers, while a ratio of 55% or higher is viewed as favoring sellers. Anything in between is considered a balanced market.
After 2,721 sales and 4,307 new listings in April, the sales-to-new-listings ratio is now at 63.2%, indicating a movement towards favoring sellers. Additionally, the sales-to-active-listings ratio is now 32.7% after being at 30.7% in March, reinforcing the continued movement towards favoring sellers.
The composite residential benchmark price in the region is now at $1,170,700, an increase from $1,143,900 in March. By property type, the benchmark price is $1,915,800 for single-detached homes, $1,078,400 for townhouses, and $752,300 for condominiums, all of which are higher than March 2023.
According to Lis, the issue remains a matter of far too little resale supply available relative to the pool of active buyers in the market. He also adds that the low inventory levels create competitive conditions where any resurgence in demand will lead to price escalation, despite the elevated borrowing costs.
The year-to-date home price increase is already at 5%, which outpaces the forecast of 1% to 2% by the end of the year. Lis remains optimistic that the market will continue to perform well, but it remains to be seen if these price increases will be sustained into 2024.
In conclusion, the short-term improvement in home sales in the Greater Vancouver region indicates a resurgence of homebuyer confidence in the market. However, the total number of sales is still lower than the previous year’s numbers, and the total inventory of active listings in the region is lower than the 10-year average. Nonetheless, the sales-to-new-listings ratio and sales-to-active-listings ratio are indicating a movement towards favoring sellers.