Ranking: These Metro Vancouver cities saw the biggest drops in real estate prices due to higher interest rates

Ranking: These Metro Vancouver cities saw the biggest drops in real estate prices due to higher interest rates

A recent report on rising interest rates gives potential home buyers and sellers an idea of ​​the impact already seen in the Vancouver area, and results vary by city.

Realtors with HouseSigma say those involved in the local real estate market are seeing lower prices, longer registration periods, and some homes not selling at all.

In a report Thursday, the company said that the average selling price in the Vancouver area overall fell to $922,000 in May.

This is 12.11 percent less than what sellers were getting for their homes in February ($1,049,000).

HouseSigma blames the Bank of Canada’s overnight lending rate, which recently increased 0.5 percent, up to 1.5 percent.

It’s the third increase this year, after similar moves in March and April. Those behind the report tried to track the impact on the country’s hottest housing market, and found that although some buyers had already booked a lower price at the start of the year, data suggests that changes are underway.

Looking at the average selling price in the region overall, it was close to the $1.05 million mark before the price hikes started.

In March, that average fell to $980,000, by April it was $976,000, followed by a drop again in May.

Not all cities are affected equally

According to a June 2 report, some communities experienced a larger decline than others. While the average for the area is a 12.11 percent drop, sellers of detached homes in Maple Ridge earned nearly 15 percent less for their homes in May than in February.

New Westminster also saw a turn in favor of buyers with a change of 14.71 percent.

Sellers in Surrey were also affected by more than average, while sellers in Langley were close to average.

Port Moody sellers also saw a double digit decline, albeit below average.

“We are now beginning to see the full impact of higher interest rates on the habits of buyers and sellers,” HouseSigma broker Hao Li said in a press release about the report.

“These double-digit declines in detached home averages in areas like Surrey and Maple Ridge highlight the downturn that is occurring in the BC market.”

But the data also suggests that it’s still a good idea to be a seller in one area: West Vancouver.

In this community, the average selling price was actually a little higher than in February. Buyers paid an average of $3.52 million, up 13.55 percent from what they paid in February.

See a larger version of the drawing included on the HouseSigma blog.

Homes don’t sell at all

In addition to what homes sell for, the report looked at whether they sell at all.

Expired listings, which means that essentially expired listings — not sold within a specified period of time and withdrawn — are up a whopping 121 percent from February.

According to HouseSigma, 2,331 homes fell into this category at the time. By March, 3,095 listings had been terminated. In April: 3,590. Another 5,141 lists were terminated in May.

He told me there were several reasons for this, one of which was that the sellers were deciding the offers they got weren’t good enough. They can then choose to demolish it and re-list the property to attract a new group of potential buyers.

Sometimes sellers will also remove a property from the market because it’s been on for a while, thinking that maybe they’ll try again when conditions change or at a different time of the year.

what does that mean

According to Li, this marks a sharp turnaround from the peak of the epidemic when buyers scrambled to find options, “raising prices at a pace we’ve never seen before.”

Now, he told me, buyers don’t seem to feel that rush, thinking they might get a deal or find a better option if they wait.

“Since the Bank of Canada started raising rates, buyers have steadily taken a ‘wait and see’ approach to buying a home, and sellers have had to adjust their selling price expectations,” Lee said.

2022-06-03 18:53:46

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