Home Buying, Market Intelligence, Real Estate News |
April 20, 2023
March 2023, Steady Eddy
Sales Absorptions on the Rise
This month’s statistics show significant increases in sales absorptions compared to the previous month, although most remain lower than the same time last year. Notably, the Bank of Canada has kept interest rates unchanged for two consecutive periods, with talk of rates potentially decreasing soon. Consequently, sales absorptions have steadily increased over the last month, with buyers showing less concern about interest rates.
Varied Performance Across Areas
Certain areas continue to outperform others based on the supply of a specific product type in a particular neighborhood. Sellers in areas with limited supply find it easier to sell compared to those in neighborhoods with ample competing supply. Multiple offers persist in areas with high demand and limited supply.
Increased Sales Absorptions
Sales absorptions have risen across the board compared to last month, with single-family absorptions seeing the most significant increase of 88% over February sales. This has led to a slight increase in average pricing (1.6%) since February 2023. However, values remain down by about 19% compared to March 2022, when the market began to slow due to last year’s interest rate increases.
Changing Buyer Conversations
With the Bank of Canada maintaining interest rates for two consecutive months, buyers no longer prioritize this factor in their real estate purchases, as seen throughout last year and early this year. There is speculation within the industry that the BoC may soon start lowering rates, potentially allowing previously priced-out buyers to re-enter the market and reducing borrowing costs for existing mortgage holders.
Positive Policy Changes
In March, the government announced changes to the Foreign Buyers Ban Policy, permitting foreigners to purchase land for development and have a larger share in ownership of development companies bringing new home supply to local markets. This addresses the supply issue highlighted in previous reports. Whether it will suffice remains uncertain, given population growth, but any increase in supply in high-demand areas will undoubtedly benefit.
Outlook for the Future
Over the next month, further market improvements are expected across the Fraser Valley, with continued absorptions and value increases anticipated as demand rises and borrowing costs potentially decrease for everyone.
