November 2023 Market Update

As the year comes to a close, the Metro Vancouver real estate market sits in balanced territory at 6 months of supply. The total number of properties currently listed for sale is 13.5% above last year, and 3.7% above the seasonal average. Low absorption rates mean the newer listings aren't being bought, as sales were 33% below the 10-year seasonal average in November. Across all detached, attached and apartment property types, the sales-to-active listings ratio is 16.3%; 12.7% for detached homes, 19.8% for attached, and 18.2% for apartments.

The detached segment overall remains in buyer's market territory with 8 months of supply. Still, the absorption rate was the highest at 52% compared to townhomes and condos, in part due to lesser growth in new listings. North Vancouver and Port Moody have 3 months of supply, while Burnaby North/South, New Westminster and Coquitlam/Port Coquitlam are at 4 months. Coquitlam has seen quick growth in inventory mainly in the condo and townhouse sectors in the last 2 months, going from 599 active listings to 778. There are more new listings in comparison to sales levels, meaning more opportunities to capitalize on.
Home Price Index

Price trends

We are seeing flatter price trends following a period where prices rose over 7% earlier in the year, edging lower since summer. The composite benchmark price for all residential properties in Metro Vancouver is currently $1,185,100. A 4.9% increase over November 2022 and a 1% decrease compared to October 2023. The benchmark price for a detached home is $1,982,600, a 6.8% increase from November 2022 and a 0.9% decrease compared to October 2023. The benchmark price of an apartment home is $762,700, a 6.2% increase from November 2022 and a 1% decrease compared to October 2023. The benchmark price of a townhouse is $1,092,600, a 6.9% increase from November 2022 and a 0.7% decrease compared to October 2023.
North Vancouver: One of the few seller’s markets for inventory in Metro Vancouver.
West Vancouver: West Vancouver saw the house price index drop by 3.7% last month.
Richmond: Strength in the detached market saw the house price index rise 0.3% last month.
Burnaby East: The house price index was down 2.2% last month only up 4.6% since last year.
Burnaby North: The house price index was down 1.8% year-over-year.
Burnaby South: The house price index was down 1.4% year-over-year.
New Westminster: Continues to offer the best value in the region.
Coquitlam: House price index up 2.7% year-over-year, more inventory keeping prices in check.
Port Moody: Inventory starved market, house price index down 1.2% from last month.
Port Coquitlam: Another one of the few municipalities with seller’s market conditions.
Maple Ridge: House price index down 1.7% last month but up 4.3% since last year.
Fraser Valley: Sales down 8.1% from October, up 6.2% from November 2022.

New policies in effect

It could be that among the wave of new housing policies, the strict short-term rental regulations are motivating investors to sell, instead of becoming long-term landlords on properties that don't cash flow. In response to the vacation rental crackdown, an Airbnb representative spoke at a Real Estate Board of Greater Vancouver event to share some interesting facts concerning their operations in BC:
  • 83% of hosts share only one property.
  • 80% of the short-term rental areas do not have any hotels. 
  • There are more short-term rentals than hotel accommodation.
  • Over 1 million nights were booked on Airbnb in the last 12 months.
  • Consequently, hotel prices go through the roof. Up 8% year-over-year after restrictions came into place in other cities. New regulations will have an impact on the tourism economy.
  • Supply goes underground to marketplaces that don't have insurance, reviews, payment systems, etc.
  • Rent prices increase, and vacancy rates remain the same. No compelling evidence that Airbnb activity has a material impact on the housing market and rental rates.
  • The most popular international city on Airbnb as of 2016 was Vancouver.
Short-term rental license holders are starting to receive an online renewal notice at the new licensing fee of $1,000. It will be interesting to see how many will continue operating at that rate, which could be a drop in the bucket compared to potential revenue. There is a good chance people will eventually find a way to skirt the new rules, should there be a continued lack of enforcement.
Airbnb License Renewal 2023

Standardized designs to help build more homes quicker

The BC Government officially passed legislation mandating multiplex zoning as part of the Homes for People plan, requiring municipalities to allow 4-6 units on single-family lots greater than 3,000 square feet in communities with more than 5,000 people.

"In order to address our housing crisis, we must use innovative solutions to enable housing to be built faster,” said Ravi Kahlon, Minister of Housing. “Having standardized building designs available can help streamline the permitting process. We will work to add additional designs in the coming years to ensure our communities remain vibrant and have a variety of housing options."
Standardized Multiplex Designs

Through the new Standardized Housing Design Project, the Province is creating new standardized, customizable residential designs for small-scale, multi-unit housing built on single lots. These designs can be adopted by local governments and offered to builders and homeowners at a significantly below-market cost to expedite permitting and development.

The new legislation allows three to four units on land currently zoned for single-family homes and duplexes, and as many as six units near bus stops with frequent transit service. As many as 10 different designs will be developed. The designs will comply with the BC Building Code and are expected to be as close as possible to building-permit ready, recognizing minor amendments may be required by local designers or architects to take into account specific site conditions. The designs will be created for various lot sizes and configurations to be widely applicable throughout B.C. and are expected to help builders and homeowners add increased density to their existing properties quickly and more affordably.

Bank of Canada holds rate

For the fifth straight month, the Bank of Canada left its key rate at 5%. They know full well that high rates are squeezing borrowers, as Canadians shovel more savings into paying off ballooning debts. Yet there is no hurry to signal rate cuts and rekindle inflation, warning that they "remain prepared to raise the policy rate further if needed." Borrowers shouldn't, however, bank on lower rates in the near term, and prepare for the worst-case scenario (low probability of no cuts until 2025) but hope for the best (a likelihood we'll get prime rate relief by spring or summer, according to 26 economists in a Reuters poll).
Subscribe to get future posts via email.