Greater Vancouver home sales bounced again in August, increasing 16% year-overyear. This was the second consecutive month home sales had increased on a yearover-year basis. However, it is important to contextualize the movements before jumping to conclusions and getting too far ahead of ourselves. Without a doubt sales activity has increased, which shouldn’t be overly surprising considering we endured a twenty year low in purchasing activity through the first half of this year. It appears some of the demand that was cautiously sitting on the sidelines is finally pulling the trigger, thanks to lower prices and much lower mortgage rates. Today we are seeing 5 year fixed uninsured mortgages as low as 2.69% with further indications that those should sink lower as the 5 year Government of Canada bond yields continues to tumble. Despite the massively inverted Canadian yield curve, banks are still eager to lend, many of whom are actively competing for new borrowers despite shrinking margins. As a result, the housing market appears much stronger, sales activity is picking up, banks are lending and prices appear to have stabilized. However, resounding calls echoing that the bottom is in, are likely premature. Let us dive in further.
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