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Home sales in Metro Vancouver calmer in May as interest rates cool hot market

Click to play video: 'Good news and bad news for home buyers in interest rate increases'
Good news and bad news for home buyers in interest rate increases
The latest real estate numbers show that higher interest rates continue to have a calming influence on home sales. As Emad Agahi reports, the rising cost of borrowing is both good news and bad news for buyers – Jun 3, 2022

The Real Estate Board of Greater Vancouver says home sales across the region have returned to “more typical seasonal levels” and that there are modest signs continuous price increases might ease.

A statement from the board reports 2,918 sales across Metro Vancouver in May, nearly 32 per cent below those recorded in May 2021 and 9.7 per cent below the number of residential properties that changed hands last month.

Board chair Daniel John says May 2022 sales were also 12.9 per cent below the 10-year sales average, while the number of properties listed for sale in May was up just over four per cent compared with the month earlier.

The board says the ratio of sales to active listings for townhomes and apartments topped 35 per cent last month, above the 20 per cent setting that can put upward pressure on prices, while the ratio for detached homes was 18.3 per cent, closer to the 12 per cent mark that can push home prices down.

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The composite benchmark price for all residential properties in Metro Vancouver was $1,261,100, a 14.7 per cent increase compared to May 2021 and a 0.3 per cent decrease compared to April 2022.

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John says steady price increases have begun to ease over the last two months but the lack of choice for homebuyers remains a key factor as the market cools.

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Broadway corridor impact on rental affordability

“Where home prices go next will depend on housing supply.” he says in the statement. “While we’re beginning to see modest increases in home listings, we still need housing supply totals to more than double to bring the market close to balanced territory.”

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John points to positive signs, including rising interest rates, that have encouraged buyers to take more time with their decisions.

“This spring is providing a calmer environment, with fewer multiple offer situations, which is allowing buyers to explore their housing options, understand the changing mortgage market, and do their due diligence,” says John.

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