June 2023 – Fraser Valley Real Estate Market Snapshot

June 2023, Uncertainty

Bank of Canada’s Rate Hike

In mid-July, the Bank of Canada (BOC) raised the prime rate to 5%, with a possibility of further increases in September. This occurs despite inflation stabilizing at 3.4% for May and June. Interest rates are expected to rise until inflation approaches the BOC’s goal of 2.5% by mid-2025.

Sales Figures for June

June saw an increase in sales across all product types. Single-family home sales rose by 77% compared to the previous year. However, with the recent rate hike, this growth is likely to slow down. The average price of a single-family home reached $1,609,796 in June, representing a 2.2% increase from June 2022.

Impact on Buyer Behavior

Higher rates and escalating prices may drive more buyers towards affordable multi-family property options. Supply remains higher compared to the previous month, but lower than June 2022. Average prices have remained stable, indicating a healthy improvement in the market.

Potential Market Dip

The uncertainty surrounding rate increases may make potential homebuyers hesitant, leading to a potential market dip during July and August. Another rate increase in September could further impede purchaser affordability.

Municipal Plans for Supply

The release of plans by targeted municipalities to update approval processes aims to increase overall supply and mitigate price increases. However, these strategies may also exert downward pressure on home prices once implemented. The success of these plans remains to be seen.