DATE

Vancouver Housing Activity Picking Up Off the Lows

Steve Saretsky -

A quick updated on the Vancouver housing market here. I have been tracking data on a weekly basis for the Bank of Canada. It’s unquestionably difficult to try and discern any trends in the Real Estate market on a weekly basis, but we are starting to get a sense of how buyers and sellers are behaving.

Weekly sales over the past four weeks have averaged 43% lower than last years levels. That is incredibly weak considering last April/May was the slowest in nearly two decades.

However, new listings are also very low, at the beginning of April they plunged 65% and have since been steadily increasing as the number of COVID-19 cases slow. As quarantine measures ease, new listings are picking up. They have increased for three consecutive weeks.

New listings are outpacing sales, and this has pushed the months of inventory for sale higher. There is currently 7.4 months of inventory for sale, indicative of a buyers market.

Prices are all over the place, as should be expected when volumes collapse. Ironically, condos, which were the hottest segment of the market pre-virus, are now seeing the most downwards pressure in terms of pricing. I have condo prices down about 5% across the board, you call it the “COVID discount”. Detached house prices appear to be holding up thanks in part to low inventory.

Lastly, there appears to be lots of media buzz over CMHC’s forecast for prices to fall between 9-18% over the coming 12 months. I’ll be the last to admit that I know where prices will be in 12 months. However, I think it’s worth bearing in mind that CMHC is a crown corporation that essentially controls our mortgage market, so they are generally more optimistic if anything. Chances are, behind closed doors, their forecasts are probably more dire. I’m guessing they have a pretty good look at the mortgages on their books and don’t like what they see. Anyways, it would be pretty ironic if they turned out to be incredibly wrong, I guess we’ll find out soon enough.

 

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The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

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The Saretsky Report. December 2022