August 2024 Media Stats Package

September 04, 2024

Sellers await buyers’ return after quieter summer market

Home sales registered on the MLS® in Metro Vancouver remained below their ten-year seasonal averages in August as summer holidays come to a close.

Greater Vancouver REALTORS® (GVR) reports that residential sales in the region totalled 1,904 in August 2024, a 17.1 per cent decrease from the 2,296 sales recorded in August 2023. This total was also 26 per cent below the 10-year seasonal average (2,572).

“From a seasonal perspective, August is typically a slower month for sales than June or July. In this respect, this August has been no different,” Andrew Lis, GVR’s director of economics and data analytics said. “With that said, sales remain in a holding pattern, trending roughly 20 per cent below their 10-year seasonal average, which suggests buyers are still feeling the pinch of higher borrowing costs, despite two recent quarter percentage point reductions to the policy rate this summer.”

There were 4,109 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2024. This represents a 4.2 per cent increase compared to the 3,943 properties listed in August 2023. This total was 1.7 per cent below the 10-year seasonal average (4,179).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 13,812, a 37 per cent increase compared to August 2023 (10,082). This total is also 20.8 per cent above the 10-year seasonal average (11,432).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for August 2024 is 14.3 per cent. By property type, the ratio is 9.6 per cent for detached homes, 18 per cent for attached, and 17.2 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Buyers’ hesitancy to enter the market, paired with new listing activity on the part of sellers that is in line with historical averages, has allowed inventory to accumulate for a number of months and has moved the market firmly into balanced conditions,” Lis said.

“With the Bank of Canada’s decision to reduce the policy rate today by another quarter percentage point, and with September being a month that typically sees an increase in sales from a seasonal perspective, the fall market is set up to bring more buyers off the sidelines. We will watch the upcoming September data to see whether they decide to show up.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,195,900. This represents a 0.9 per cent decrease over August 2023 and a 0.1 per cent decrease compared to July 2024.

Sales of detached homes in August 2024 reached 509, a 13.9 per cent decrease from the 591 detached sales recorded in August 2023. The benchmark price for a detached home is $2,048,400. This represents a 1.8 per cent increase from August 2023 and a 0.1 per cent decrease compared to July 2024.

Sales of apartment homes reached 1,012 in August 2024, a 20.3 per cent decrease compared to the 1,270 sales in August 2023. The benchmark price of an apartment home is $768,200. This represents a 0.1 per cent decrease from August 2023 and a 0 per cent decrease compared to July 2024.

Attached home sales in August 2024 totalled 370, a 12.3 per cent decrease compared to the 422 sales in August 2023. The benchmark price of a townhouse is $1,119,300. This represents a 0.8 per cent increase from August 2023 and a 0.5 per cent decrease compared to July 2024.

Download the August 2024 MLS® stats package

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Canadian Inflation Fell in June, Setting the Stage For BoC Rate Cut

Inflation unexpectedly slipped 0.1% (not seasonally adjusted) in June, following a 0.6% increase in May. This was the first decline in six months. The monthly decrease was driven by lower prices for travel tours (-11.1%) and gasoline (-3.1%). 

The Consumer Price Index (CPI) rose 2.7% year over year in June, down from a 2.9% gain in May. The deceleration was mainly due to slower year-over-year growth in gasoline prices, which rose 0.4% in June following a 5.6% increase in May. Excluding gasoline, the CPI rose 2.8% in June.

Lower prices for durable goods (-1.8%) y/y also contributed to the slowdown in the all-items CPI in June, following a 0.8% decline in May. An increase in prices for food purchased from stores (+2.1%) moderated the deceleration, as well as a smaller decline for cellular services in June (-12.8%) compared with May (-19.4%).

The Bank of Canada's preferred measures of core inflation, the trim and median core rates, exclude the more volatile price movements to assess the level of underlying inflation. The CPI trim was unchanged in June at 2.9%, above the market's expectation of 2.8%. The CPI median fell two ticks to 2.6%. 

The third chart below shows the 3- and 6-month moving averages for the average of median and trim CPI measured as an annualized percentage change. While the 3-month moving average has accelerated to about 3%, the 6--month measure has fallen to just over 2%.

Bottom Line

Today's inflation reading is good news for the Bank of Canada, giving them leeway to cut interest rates next week. June marks the sixth consecutive month that the headline yearly inflation rate has been within the BoC's target range, bringing the annual pace of price pressures back to its weakest levels since 2021. 

Today's inflation data will give the central bank confidence that the May rise in inflation was temporary. Annual inflation will reach the Bank's 2% target by some time next year. This opens the way for the Bank to cut the overnight rate on July 24 by 25 bps to 4.5%. 

According to Bloomberg News, traders in overnight swaps increased their bets that the Bank of Canada would cut rates next Wednesday, putting the odds at about 90% compared with 80% before the release.

Yesterday's business and consumer outlook surveys point towards slowing growth in firms' input and selling prices amid a weaker economic backdrop. Inflation expectations fell in June and are now in the BoC's target range. Businesses are expecting weaker soft demand. The unemployment rate is trending higher, and the share of firms reporting labour shortages is near a record low. Companies' expectations for wage increases over the next year have slowed. Overall, capacity constraints “have returned close to their historical average.”

The central bank flagged that consumer survey respondents still think domestic factors, including fiscal policy and elevated housing costs, are “contributing to high inflation.” Home-buying intentions are near historical averages, the bank said, and are supported by “strong plans” among newcomers to buy homes.  

Another rate cut is coming next week, which will help to spur housing activity

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
drsherrycooper@dominionlending.ca