Vancouver Median Home Prices Drop 9%!

The Vancouver Life Real Estate Podcast

This week we unpack the recent Bank of Canada decision to hold interest rates steady at 5% and we review the latest stats for the month of August from the REBGV. With respect to interest rates the market got the hold it was hoping for and considering our recent history of 10 rate hikes and 3 holds, this decision came at a crucial juncture for Canada's economic landscape.
The central bank's press release revealed that while inflation remained stubbornly high, the Canadian economy actually contracted in the second quarter of the year, which likely presented a dilemma for policymakers and helped enforce the decision to pause rates. They were faced with compelling reasons to both raise and lower rates but ultimately chose to maintain the status quo.
One of the key statistics that caught everyone's attention was the significant miss in Canada's GDP growth projection for the second quarter. It was expected to grow by 1.5%, but instead, it contracted by 0.2%. This sudden economic setback raised concerns and provided the backdrop for the Bank of Canada's decision.
On the employment front, the picture was more stable. Employment remained strong which was a sharp contrast to the previous month that shed more than 60,000 jobs. 40,000 jobs were added in the month of August while at the same time another 100,000 people immigrated to Canada in August! However, with that said, the central bank still pointed to "excess demand easing" and emphasized the lagging effects of previous monetary policy decisions as reasons for holding rates. The Bank also expressed its concern about underlying inflationary pressures and asserted its readiness to raise rates further if necessary, underscoring its commitment to restoring price stability and reducing inflation.
August sales numbers were relatively flat, and that’s to be expected this time of the year as it’s a historically slow month. Total sales saw a notable 21.5% increase from the previous year, a significant shift attributed to more people entering the market, even at the current 5% interest rate. This was surprising and reiterates that markets respond to stability. This time last year, rates were increasing at an incredible pace but were still half of what they are today. However, despite
this surge in sales, the numbers remained 13.8% below the 10-year average, indicating a market still struggling to reach its full potential.
New listings also saw an 18% increase compared to the previous year, but they remained 5.3% below the 10-year average, pointing to a persistent lack of inventory. The most intriguing aspect of the August statistics was the inventory situation. Overall inventory dropped by 6.5% compared to July, marking the first decline in seven months. Although inventory remains below 10,000 units for the eighth consecutive month. Get this and so much more as we take a deep dive in this weeks episode.

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