New listings are finally outpacing sales, as price gains relent in Metro Vancouver to begin the typically slower fall season. With two more interest rate announcements for the year on October 25th and December 6th, the longer mortgage rates stay at these elevated levels, the more inventory will continue to build and put downward pressure on prices. Homeowners have been reluctant to list their homes given rates are the highest we've seen in over 10 years, but September data suggests there is renewed interest to participate in the market, with new listing activity rising back in line with long-term historical averages. The outcome is more balanced market conditions overall.
Greater Vancouver Home Prices October 2023
Residential home sales for the month of September 2023 totalled 1,926—26% below the 10-year seasonal average. There were 5,446 detached, attached and apartment properties newly listed, representing a 28% increase compared to the 4,243 homes listed in September 2022—5% above the 10-year seasonal average. Across all detached, attached and apartment property types, the sales-to-active listings ratio is 17.7%; 12.6% for detached homes, 21.6% for townhomes, and 21.3% for apartments.
Governments at all levels are rolling out new measures to tackle the housing crisis, as fixing it has proven to be rather difficult. Furthermore, Canada's population grew by over 1 million in the second quarter—the highest rate of growth in a single year since 1957. British Columbia's housing minister, Ravi Kahlon, remains tight-lipped regarding the specific details of upcoming housing legislation, but among the changes are the following:
Remove GST on new purpose-built rental construction.
Blanket rezoning at the municipal level to fill in the "missing middle".
Set maximum allowable rent increase at 3.5% for 2024. Prior to 2018, the annual allowable rent increase was based on the provincial inflation rate, plus 2%. As inflation returns to normal levels, the province intends to return to an annual rent increase that is tied to B.C.’s Consumer Price Index in future years.
Increase short-term rental license fee from $109 to $1,000.
Increase the First Time Home Buyers' Program property transfer tax exemption threshold, and review it on an annual basis to reflect changing market conditions.
Flipping tax on sale of property held for less than a year.
"You don't pay taxes, they take taxes." – Chris Rock
It seems like the solution always comes down to more taxes, which have inflationary impacts on home prices. The key driver of high prices in the housing market is lack of housing supply. Any policy measures such as a "flipping tax" should ensure that no new housing is blocked from becoming available. Property renovations and deep retrofits can help refurbish older uninhabitable homes and bring them back to saleable condition, increasing both market and rental supply. During home renovations, individuals can choose to add a rental unit or accessory dwelling unit to their home, increasing housing supply across the spectrum by introducing more density. Blanket policies may result in unintended negative consequences that actually inhibit the development of new housing supply. Additional units should not be subject to a flipping tax. Similarly, renovations that result in a significant improvement in energy efficiency or reduction in carbon emissions should also be exempt from the tax. The onus is being placed on the private sector to build more housing, which sounds like a pipe dream if the project isn't financially feasible.
eXp Realty Exclusives
The nation’s No. 1 brokerage by transaction side count announced the launch of eXp Exclusives, which will be open to eXp agents and their clients in the U.S. and Canada. Through eXp Exclusives, participants will be able to share off-market and pre-market listings with their clients through a mobile app.
"We are living through one of the most limited inventory periods in our lifetimes, so eXp is committed to providing as many ways as possible to create inventory and ways of selling homes for our agents and their clients. Our vision is to create the most expansive, worldwide listing network for eXp agents and their clients." – Leo Pareja, eXp’s Chief Strategy Officer
eXp Realty partners with Opendoor
eXp Realty has also partnered with Opendoor—the leading iBuyer where you can skip the hassle of listing, showings and months of stress, and close on your own timeline. The partnership provides greater certainty to home sellers. eXp Realty’s nearly 90,000 agents will be able to request a cash offer on qualifying properties on behalf of their clients and present the Opendoor offer alongside the option of listing the client’s home on the market.
