The Greater Vancouver real estate market faced a slowdown in December as both sales and prices declined for the fourth consecutive month. The drop in activity was largely attributed to the impact of higher interest rates, tighter mortgage rules, and lower consumer confidence amid the uncertainty of the global economy.

According to the Real Estate Board of Greater Vancouver (REBGV), there were 1,996 property sales in December, down 3.6 per cent from November and 4.9 per cent from December 2022. This was the lowest level of sales since December 2019, when the market was recovering from the stress test introduced in 2018.

New listings also decreased by 9.4 per cent month-over-month and 18.7 per cent year-over-year to 2,418 in December, the lowest number since February 2020. The decline in new listings was more pronounced for detached homes, which dropped by 13.8 per cent from November and 25.6 per cent from December 2022.

The drop in sales and new listings resulted in a balanced market condition, with a sales-to-active-listings ratio of 43 per cent in December, slightly lower than the 44.5 per cent in November and the 45.4 per cent in December 2022. A balanced market is generally considered to have a ratio between 40 and 60 per cent.

The REBGV president, Keith Stewart, commented on the market situation: “The Greater Vancouver market has been adjusting to the changing dynamics of the housing sector over the past year. Buyers and sellers are taking a wait-and-see approach as they monitor the effects of the interest rate hikes, the new mortgage stress test, and the global economic outlook. We expect the market to remain balanced in the near term, with moderate price movements and stable inventory levels.”

The benchmark price for all property types in Greater Vancouver was $1,196,500 in December, down 0.6 per cent from November and 4.4 per cent from December 2022. The benchmark price for detached homes was $1,762,100, down 0.8 per cent from November and 5.1 per cent from December 2022. The benchmark price for townhomes was $948,900, down 0.5 per cent from November and 4.2 per cent from December 2022. The benchmark price for apartments was $737,900, down 0.4 per cent from November and 3.9 per cent from December 2022.

The Canadian Real Estate Association (CREA) has issued its latest forecast for home sales activity and average home prices via MLS systems of Canadian real estate boards and associations for 2023 and 2024. According to the report, national home sales have remained stable since the summer of 2022 and are expected to rise gradually toward the long-term trend in 2024. CREA economists expect buyers to return to the market after waiting on the sidelines for added certainty around mortgage payments and property value.

The report also highlights the possibility of a short and mild recession in the middle of 2023 becoming more severe and longer-lasting than anticipated. This could pose a downside risk to the sales and price forecast, especially in regions that are more dependent on oil and gas production, such as Alberta and Saskatchewan.

The national average home price is forecast to decline 4.8 per cent annually to $670,389 in 2023. This is up about $8,000 from CREA’s previous forecast owing to a compositional boost in the first quarter of 2023 from outsized gains in the pricey regions of B.C.'s Lower Mainland and the Greater Toronto Area. The national average home price is forecast to recover by 4.7 per cent from 2023 to 2024 to around $702,200, putting it on par with 2022.

For Greater Vancouver, CREA forecasts that home sales will decrease by 9.6 per cent to 32,740 units in 2023, and then increase by 14.6 per cent to 37,530 units in 2024. The average home price in Greater Vancouver is forecast to drop by 7.2 per cent to $1,180,000 in 2023, and then rise by 5.1 per cent to $1,240,000 in 2024.

Looking at some of the popular areas in Greater Vancouver, the following trends can be observed:

• Kitsilano: This is a beachfront neighborhood that attracts young professionals and families who enjoy the West Coast vibe. It has stunning views of the mountains and the sea, as well as local boutiques, organic markets, and coffee shops. It also has good schools and a famous beach. However, it is quite expensive and parking can be difficult. The benchmark price for detached homes in Kitsilano was $2,915,800 in December, down 1.1 per cent from November and 6.7 per cent from December 2022.
• West End: This is a vibrant and diverse neighborhood that is close to downtown Vancouver. It is a welcoming place for everyone, with fantastic restaurants, easy access to Stanley Park, and a friendly community. However, it can also be noisy and crowded due to the high volume of tourists and traffic. The benchmark price for apartments in the West End was $814,100 in December, down 0.5 per cent from November and 4.5 per cent from December 2022.
• Mount Pleasant: This is an up-and-coming area with a thriving arts community. It is perfect for those who love to be in the middle of the action, with many local breweries, vintage stores, and world-class dining options. However, it can also feel a bit cramped and rent prices are steadily increasing. The benchmark price for townhomes in Mount Pleasant was $1,057,400 in December, down 0.6 per cent from November and 4.7 per cent from December 2022.
• Yaletown: This is a trendy downtown area that features modern lofts, upscale condos, and chic restaurants. It is popular among young professionals who enjoy the nightlife, shopping, and entertainment options. However, it is also very pricey and can lack a sense of community. The benchmark price for apartments in Yaletown was $1,011,700 in December, down 0.4 per cent from November and 4.3 per cent from December 2022.
• West Point Grey: This is an affluent and mature neighborhood that offers fabulous views of the ocean and the mountains. It is home to some of the most expensive properties in the city, as well as prestigious schools and institutions. However, it is also very quiet and not very accessible by public transit. The benchmark price for detached homes in West Point Grey was $4,256,300 in December, down 1.2 per cent from November and 7.1 per cent from December 2022.
• Kerrisdale: This is a quieter and more traditional neighborhood that appeals to older residents and families. It has a charming village atmosphere, with quaint shops, cafes, and parks. However, it is also very conservative and not very diverse. The benchmark price for detached homes in Kerrisdale was $3,317,900 in December, down 1.3 per cent from November and 6.9 per cent from December 2022.