As expected, the slow grind in the Vancouver housing market continued in March. As we continue to stress on a monthly basis, the direction of housing markets are largely determined by the supply and availability of credit and human sentiment, thus once those two factors turn negative they can be very challenging to reverse. This is very different than the stock market where prices and the overall direction of the market can change significantly on a month to month basis. Yet we continue to hear suggestions that home sales will suddenly bounce back any month now. With home sales falling 30% from last March, and marking their lowest total for the month of March in 33 years, sales will continue to stumble along in the months ahead. Unsurprisingly, in the face of a weakening Canadian economy and sluggish housing market, the Bank of Canada has taken a dovish pivot, this has sent longer duration bond yields plummeting, inverting a large portion of the yield curve and pushing mortgage rates lower, actually helping to ease affordability as prices fall. We will discuss the impacts of this in the March report.
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