Welcome to June
I normally open the pool in the May long weekend and usually that signals six weeks of rain. This year the rain and cooler weather persisted and so I refused to play the weather man’s fool and waited until the first weekend in June to open the pool and patio.
For this month’s newsletter I wanted to wait until the Bank of Canada rate decision was announced. Last Wednesday the BOC, for the first time in over three years, dropped the interest rate by ¼ percent to 4.75%. This is a significant event because it marks the end of the monetary tightening cycle and signals the slow and calculated start of easing monetary policy. A day later the ECB, or European Central Bank also cut their rate by a quarter point. Most experts think the US Federal Reserve will follow with their own rate cuts this fall.
Kind of like the transition from the rain and cool weather of spring to the dry warmer summer weather. But just like the weather, the transition is best done slowly because too fast of a transition can result in chaos – in weather terms - floods, droughts: in economic terms - inflation, recession, stagflation.
So what does this mean for us?
For the economy it is a welcome sign that the tough medicine of high rates to tame inflation is working and now nearing the end of it’s application. It is also a positive sign that the central banks have achieved a soft landing and that a recession is probably off the table economically, and a stable and growing economy are on the horizon.
The real estate market is also showing signs of stability in terms of a balance between listings and buyers. Despite sales volumes lower than historial averages, the average sale prices are holding and in most segments showing modest increases. The market should remain active and stable in the short term with experts predicting values and sales volumes to slowly rise over the medium term. The following is a more indepth update of our market segments.
Greater Vancouver
Overall sales were lower by 19.9% compare to a year earlier whiles sale prices increased during the same period by 4.3% for single family and townhomes and increase 1.90% for apartments. The overall sales to listing ratio is 20.8%, lower for single family and townhomes and higher for apartments. This still seen as a balance market. Experts are predicting higher sales and values in the next year due to pent up demand.
GVR-Stats-Package-May-2024.pdf (gvrealtors.ca)
Fraser Valley
Sales in May were down 11% from May 2023 but up 3% from April. Listings were up 42% from a year earlier historical lows making a more balanced market between sales and listings. Single Family residences average sale price increased 2.9% from a year ago while townhomes and apartment average sales prices dropped 0.1 and 2.9% respectively. Experts are predicting the real estate market will be stable with a slight edget to buyers in the short term leveling off with lower interest rates.
Statistics Package 2024-05 - Fraser Valley (fvreb.bc.ca)
Calgary
Sales we up 7.3% compared to a year ago and values are up 10.3% in the same time. Active lisitngs have dropped by 16..2% also from a year ago. Calgary is the only seller’s market in Canada and continues to be very strong. Expects forecast a continued strong market in terms of sale and value increases.
Edmonton
Sales in Edmonton for May 2024 increased 18.9% from a year ago and listing have dropped 17.1% from May 2023. Values have increased 5.0% from the same time last year showing that Edmonton is a growing market in terms of sales and values.