This morning, the Bank of Canada reduced its overnight rate by 0.50%, bringing it to 3.75%. This is welcome news for borrowers and could create new opportunities for both buyers and sellers in the Greater Vancouver real estate market. Here’s what this change could mean for you.

Impact on Variable-Rate Mortgages and Borrowers

For those with variable-rate mortgages or home equity lines of credit (HELOCs), this rate cut provides immediate relief. As these loans are directly tied to the overnight rate, borrowers should experience lower monthly payments moving forward.

This reduction will ease financial pressure, making it easier for homeowners to manage their cash flow and budgets, especially if they were stretched by previous interest rate hikes.

How This Affects the Mortgage Stress Test

The Bank of Canada’s rate cut may also have a positive impact on the mortgage stress test, which lenders use to ensure buyers can handle higher rates in the future. Lower rates mean the qualifying rate used in the stress test will likely drop, making it easier for some buyers to qualify for mortgages. This opens the door for more individuals to enter the market and secure financing.

What About Fixed-Rate Mortgages?

While fixed-rate mortgages are not directly affected by the Bank’s overnight rate, they often follow trends in bond yields. If bond yields decline, we may see fixed mortgage rates move lower, providing another potential benefit for buyers. However, fixed-rate borrowers will need to monitor the bond market closely for any significant changes.

Opportunities for Buyers and Sellers

• For Buyers: The drop in borrowing costs makes homes more affordable and could lead to increased activity in the market. With the added benefit of improved qualification rates under the stress test, more buyers might now be able to secure a mortgage and find the right property.

• For Sellers: Sellers may benefit from a renewed sense of urgency among buyers, who could take advantage of these lower rates before further market changes occur. Presenting your property competitively will be key to attracting interest.

What’s Next?

The Bank of Canada has hinted at the possibility of further rate reductions in the coming months, with the next policy decision set for December 11. If borrowing conditions continue to improve, we could see even more buyers entering the market, leading to greater competition and potential price stabilization.

Need Advice? Let's Talk!

Navigating these changes can feel overwhelming, but you don’t have to do it alone. Whether you’re buying, selling, or considering refinancing, it’s important to understand how these developments impact your unique situation. If you have questions about your mortgage options, reach out to your trusted mortgage professional—or contact me, and I’ll connect you with someone who’s a great fit.

The fall market in Metro Vancouver started off with a cautious tone as home sales in September 2024 registered a 3.8% decline year-over-year. Buyers remain on the sidelines despite recent interest rate reductions, and sales are still 26% below the 10-year seasonal average, with 1,852 properties sold.

Rising Inventory Provides More Choice for Buyers

A key highlight in September is the increase in new listings. With 6,144 homes added to the market—12.8% more than last year—buyers now have more options. Overall inventory has grown by 31.2% year-over-year, giving those searching for a home more negotiating power.

Prices Show Modest Declines

The composite benchmark price for all residential properties in Metro Vancouver is now $1,179,700, representing a 1.8% decrease year-over-year and a 1.4% dip compared to August 2024.

• Detached Homes: Sales of detached homes reached 516, down 9.8% from September 2023. The benchmark price is $2,022,200, a slight 0.5% increase year-over-year but a 1.3% decrease month-over-month.

• Apartments: With 940 sales, apartment sales declined 4.9% year-over-year. The benchmark price for apartments is $762,000, down 0.8% from last year.

• Attached Homes: Townhouse sales increased by 7.4% compared to last year, with 378 sales in September. The benchmark price for attached homes is $1,099,200, a slight 0.5% decrease year-over-year.

Area-Specific Trends

• New Westminster: The benchmark price across all property types is $836,800, a 0.3% increase from last year, signaling relative stability in this market despite the broader cooling trend.

• Burnaby East: Detached homes in Burnaby East are performing well, with a benchmark price of $1,982,200, up 6.8% year-over-year.

• Vancouver East: The benchmark price in Vancouver East for all property types is $1,221,800, a 1.2% decrease from September 2023, reflecting a cooling in the market.

• Vancouver West: Prices in Vancouver West remain high, with the benchmark price of detached homes at $3,506,400, though this represents a 0.6% decrease year-over-year.

Sales-to-Active Listings Ratios

The overall sales-to-active listings ratio in September was 12.8%, signaling the market is balancing between buyers and sellers.

• Detached homes: 9.1%, indicating a buyer’s market.

• Attached homes: 16.9%, reflecting balanced conditions.

• Apartments: 14.6%, indicating stability but with room for negotiation.

What Does This Mean for Buyers, Sellers, and Investors?

• Buyers: Rising inventory means more choice and greater negotiating power. If you’ve been waiting for the right time, this could be your moment.

• Sellers: With more listings on the market, it’s critical to price competitively to attract interest. The market is becoming more buyer-friendly, so strategic pricing and presentation will be key.

• Investors: The shift in market dynamics could present long-term opportunities, particularly in detached homes where prices are showing signs of softening.

Looking Ahead

With two more interest rate decisions expected before the year ends, and with inventory on the rise, buyers could regain confidence as borrowing costs fall further. If you’re looking to buy, sell, or invest, reach out for personalized advice on how to navigate these shifting market conditions.

The Greater Vancouver real estate market in September 2024 continued to display a dynamic balance of activity, influenced by seasonal trends, borrowing rates, and shifting buyer preferences. This month, a noteworthy 12.8% increase in new listings compared to September 2023 provided greater choice for buyers, while sales figures remained relatively steady.

Key Highlights:

Sales Activity

• Residential sales totaled 1,852 in September, down 3.8% year-over-year, but still tracking to outperform 2023’s total by year-end.

• Sales were 26% below the 10-year seasonal average, reflecting caution among buyers navigating the current market conditions.

Inventory Growth

• There were 6,144 new listings across all property types, with total active listings reaching 14,932—a 31.2% increase compared to last year.

• This growth in supply, while positive for buyers, contributed to modest price declines due to slower absorption.

Price Trends

• The MLS® Home Price Index composite benchmark price dipped to $1,179,700, a 1.8% decline year-over-year.

  • Detached homes: Slight price increase of 0.5% YoY, reaching $2,022,200.

  • Apartments and attached homes experienced minor declines.

Sales-to-Active Listings Ratio

• The ratio stood at 12.8%, flirting with buyers’ market territory. A breakdown by property type showed:

  • Detached: 9.1%

  • Attached: 16.9%

  • Apartments: 14.6%

Insights from Our Focus Areas:

• Burnaby:

  • Burnaby East led with a modest decline in benchmark prices (-0.8%).

  • Burnaby North and South showed softer activity, with detached homes in Burnaby South experiencing a 4.5% year-over-year price decrease.

• New Westminster:

  • New listings increased, providing more opportunities for buyers.

  • Prices remained relatively stable, with attached homes performing well.

• Tri-Cities:

  • Coquitlam, Port Moody, and Port Coquitlam maintained solid activity.

  • Port Moody stood out with a 2.3% year-over-year price increase for detached homes.

• Vancouver:

  • Vancouver West’s detached home prices remained the highest in the region at $3,471,900.

  • Vancouver East showcased stronger affordability but saw moderate price decreases.

What This Means for Buyers and Sellers:

• For Buyers: The increased inventory presents a unique window of opportunity to find your ideal home with more selection.

• For Sellers: Sellers should adjust their strategies to align with evolving market dynamics, emphasizing competitive pricing and strong property marketing to attract buyers.

Looking Ahead:

• With two more policy rate decisions expected this year, market watchers anticipate further reductions that could spur demand.

• As borrowing costs ease, the potential for buyers to re-enter the market and stabilize activity remains promising.