Strong Growth in Metro Vancouver Housing Market in Q1 2023

“In the face of challenges, the real estate market has demonstrated its unwavering spirit, exemplifying its ability to adapt, flourish, and overcome,” remarks Jamie Squires, President of Fifth Avenue Real Estate Marketing Ltd., emphasizing the positive developments in the report.

The report highlights four areas that have emerged as beacons of progress within this evolving landscape, showcasing significant improvements in the overall real estate market.

Leading the way is Vancouver’s Northshore, which experienced a remarkable 91% surge in sales absorptions compared to the previous quarter. This impressive growth can be attributed to the introduction of new high-rise developments, expanding the available supply to meet the escalating demand.

South Surrey/White Rock also witnessed a resurgence, driven by a surge in sales activity. The report indicates a threefold increase in sales compared to the previous quarter, primarily fuelled by heightened townhome activity and a limited influx of new developments. As a result, the scarcity of available condominiums in both high and low-rise segments further emphasizes the desirability and strong demand within this vibrant neighbourhood.

Looking Ahead

The decision by the Bank of Canada to maintain the overnight rate at 450 basis points has infused the local market with a sense of optimism. However, the high borrowing costs continue to impact purchasing activity.

Nevertheless, positive migration patterns have resulted in increased rental demand and record-high rental rates, indicating a thriving rental market. Looking forward, there is growing optimism for buying activity in Metro Vancouver during the latter half of the year.

Furthermore, the successful launches witnessed in the first quarter have laid the foundation for renewed confidence, with the anticipation of additional launches in the second quarter to further strengthen developer confidence.

Jamie Squires notes, “If the Bank of Canada maintains or lowers the overnight rates, it will bolster consumer confidence in the market. However, any further rate increases could potentially hinder the absorption rate gains achieved in this quarter, as they would elevate borrowing costs and limit the purchasing power of potential buyers.” Squires emphasizes the need to monitor both inflation and the Bank of Canada’s response to it in the coming months.

With rate updates scheduled for June 7th and July 12th, she advises stakeholders to be prepared for potential celebrations or challenges, as these announcements will set the tone for the Q3 market in the summer.