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Data Points: Lower Mainland housing sales near cyclical lows in peak season

More homeowners are listing their properties as the market cools
Resale inventory moved above 18,500 units for the first time since 2020 as new listings jumped. It is a sign that more homeowners and investors are shifting gears.

Housing supply is on the rise in the Lower Mainland as more owners try to capitalize on what is normally the peak selling season, but is instead a market facing headwinds and soft sales.

Resale inventory moved above 18,500 units for the first time since 2020 as new listings jumped. It is a sign that more homeowners and investors are shifting gears.

The likelihood that interest rates will remain higher than anticipated and the increased capital gains inclusion rate have likely lifted short-term supply. Demand for rental is partly curbed due to forthcoming cuts in the number of international students.

MLS home sales in the region spanning Metro Vancouver and Abbotsford-Mission reached 4,230 units in April, according to real estate board data. This was up a scant 0.6 per cent from a year ago but followed a 6.5-per-cent year-over-year decline in March. On a seasonally adjusted basis, sales are estimated to be unchanged on a month-to-month basis, but the sales trend remained near cyclical lows, surpassed only by times of deep crisis. In fact, adjusted for the swelling size of the working-age population, sales are consistent with 2008-09.

Listing activity has picked up and remained elevated in April. Total new listings reached 10,890 units, up 65 per cent from a year ago. Divergence in listings and sales has pushed resale inventory to the highest level since 2020 and it’s likely to move higher.

Still, prices remain resilient. At $1.22 million, the average price was unchanged from March and up 1.8 per cent, year over year. Benchmark prices showed little deviation from this pattern, albeit with notable weakness in apartment prices. Even as supply has ramped up, prices have held steady, suggesting sellers continue to hold firm in expectations. Resale market weakness is anticipated to continue. While there remain many potential homebuyers on the sidelines due to record population growth, interest rates will need to move lower to attract buyers. Affordability will need to improve to get the market churning. We expect higher sales but flat prices in the second half of 2024.

In March 2024, B.C.’s merchandise exports soared by 19.1 per cent from February to approach near $5.2 billion, with resource sectors recording a sharp increase in sales. B.C. saw a lower volume of imports, down 1.9 per cent to $6.1 billion from $6.2 billion. As a result, the international trade deficit narrowed to its second lowest point in the past 12 months. Overall exports for the last 12 months are down 13.8 per cent from the previous 12 months, while imports are down 7.3 per cent over the same period.

The jump in exports was broad-based, with 10 out of 11 categories showing higher volumes over the previous month. Leading the way was higher energy products, up 21.8 per cent to $1.7 billion for March. This was followed by metal ores and non-metallic minerals, up 95.2 per cent to $504 million. This was the highest since December 2022.

On the imports side, six out of 11 categories saw a monthly year-over-year increase. Leading the way was consumer goods, up 7.7 per cent, followed by basic and industrial chemical, plastic and rubber products, up 17.4 per cent, and forestry products and building and packaging material, up 10.9 per cent.

Bryan Yu is chief economist at Central 1.