March 2023 – Fraser Valley Real Estate Market Snapshot

March 2023, Steady Eddy

When reviewing this month’s statistics in detail, you will notice strong increases in sales absorptions compared to the previous month, although most are lower than the same time last year. What is most notable is that the Bank of Canada has not moved interest rates for two consecutive periods now, and there is even chatter of rates starting to come back down soon. As a result, sales absorptions have steadily increased over the last month, and buyers do not seem to be worried or bring up interest rates in conversations anymore.

As usual, some areas are still performing better than others, based on the supply of a particular product type in a specific neighborhood. Those with homes to sell in areas with less supply are having an easier time compared to those in neighborhoods with more competing supply available. Multiple offers continue to pop up in areas with lower supply and higher demand.

Sales absorptions are up across the board when compared to last month, with single-family absorptions increasing the most by 88% over February sales. This has allowed average pricing to increase slightly (1.6%) since February 2023. However, values are still down by about 19% when compared to March 2022, the month when the market started to change and slow down due to interest rate increases last year.

With two consecutive months of the Bank of Canada leaving interest rates unchanged, we no longer hear buyers bringing this factor up in their real estate purchases, like we did for most of last year and early this year. There is even industry speculation that the BoC may start lowering rates soon. This will help those who were priced out of the market to potentially get back in, while also lowering borrowing costs for those who are already approved and needing to renew their mortgages in the coming months.

Another positive development is that our government may actually be starting to listen to us, with new changes to the Foreign Buyers Ban Policy released in March allowing foreigners to now buy land for development and have a larger share in ownership of development companies that bring new home supply to our local markets, for local buyers. This will help address the supply issue mentioned in our last monthly report. Whether it will be enough remains to be seen, considering our population growth, but any increase in supply in an area of demand will certainly help.

Over the next month, we expect to see further market improvements across the Fraser Valley in terms of continued absorptions and value increases, as demand rises and hopefully, borrowing costs start to decrease for everyone.