December 2023 – Fraser Valley Real Estate Market Snapshot

That’s A Wrap!

The final month of 2023 quietly concluded with the Bank of Canada holding interest rates for a third time in a row. Let’s dive into the statistics and see how the market performed over the final days of last year.

With so much uncertainty in the market caused by a combination of government policy and higher interest rates, along with the regular seasonal slowdown typically seen in December absorptions, supply and prices all experienced minor downward pressure in December 2023 compared to the previous month of November 2023. However, taking a long-term perspective or comparing December 2023 to December 2022 sales, absorptions, prices, and even supply are up in all sectors, except for townhomes, where supply has actually decreased year over year. This explains why townhomes also have the highest appreciation of 11% when comparing 2022 to 2023.

It is currently a sellers’ market in all three supply sectors, with limited supply and overall long-term increases in sales absorptions (as we typically see a slowdown in December, even in historically strong markets due to holiday seasonality, this is normal and nothing to base overall market changes on). With December 2023 showing stronger performance than December 2022 in terms of sales absorptions and price appreciation, it paints a better picture of the current overall market trends leaning towards the sellers’ side.

Inflation Is Slowing Down – Should Rates Start to Decrease Soon?

With rising rates throughout 2023 battling increasing inflation and pushing up costs for everyone on everything from basic needs, including food, transportation, and shelter, there finally seems to be a sense of hope with the last three Bank of Canada announcements holding the prime interest rate steady at 5.0%. The federal foreign buyer’s ban will be repealed next year (by December 31, 2024), and we will see where this goes. Additionally, new bans on short-term rentals by our provincial government are affecting resort towns in our province, specifically the Okanagan and Vancouver Island. Will these cities, which rely on short-term rentals due to insufficient hotel supply and the seasonality and dependence on tourism, appeal to the province for its citizens’ survival?

All these factors prompt purchasers and developers to carefully assess the market, likely delaying new home inventory until the numbers align favourably for them to proceed. This involves ensuring that construction and development costs are in sync with what the market can bear, creating a balance.

Please feel free to reach out with any questions you may have or to discuss potential sites you are considering for market preparation. The earlier marketing is introduced into the project design process, the more we can assist in guiding and ensuring the correct overall unit mix to achieve maximum sales and revenue results for each pocket of the Fraser Valley, regardless of market conditions.