Vancouver’s housing market defied expectations in 2023 with prices ending the year in positive territory despite the highest borrowing costs in over a decade. The Real Estate Board of Greater Vancouver reported on January 3 that the composite benchmark home price index for all residential properties in Vancouver ended the year at $1,168,700, down 1.4 per cent from November but up five per cent from December 2022. That price strength, however, came amid a sharp decline in sales.
Beginning of 2023
Two rate holds by the Bank of Canada early in the year set exaggerated expectations that the rate-hike cycle was over. That in turn caused a transient spike in home prices in the spring and elevated inflationary pressure before the central bank delivered two more quarter-point rate hikes over the summer.
Nevertheless, markets and economists seemed confident that 2023 was the year of the rate peak, and that 2024 should signal that rate relief is on the way for borrowers, with rate cuts expected by mid-year.
All of this was taking place in tandem with descending inflation. The year began with Canada’s headline Consumer Price Index inflation growing at a pace of 5.90%. As of November, that pace has slowed to 3.10%.
Residential Property Prices
The average non-seasonally adjusted house price also reached a high of $729,044 in May before sliding back down to $646,134 as of November. That’s still up 5.5% from January, but down more than 20% from the all-time high reached in February 2022.
Real estate trends are predominantly shaped by the economic conditions prevailing in a market, and due to the Bank of Canada’s three interest rate hikes in 2023, the Canadian real estate market was in a state of flux for much of the year.
Home Prices Forecast
What will the housing market look like in 2024 in Canada? Most experts and analysts expect the Canadian housing market to recover gradually as interest rates stabilize.
We understand that each local market is unique and how to pinpoint opportunities and challenges within them. We are here to offer you our expert guidance and talk you through any questions or concerns you may have. Our commitment to you is an elevated experience when it comes to your next buying or selling journey. Reach out to one of our market-leading Realtors® today.