The Real Estate Board of Greater Vancouver (REBGV) has released sales data and anecdotal reports which indicate that the nine-month decline in the housing market may be coming to an end. Despite initial fears of a listing shortage, there were 8,072 homes of all types for sale as of mid-February, approximately one-third higher than in February of last year before the first of eight straight interest rate increases began.

The market may have bottomed out in January 2023 when residential sales through the REBGV fell more than 55% from a year earlier and were down 21% from a month before, resulting in just 1,022 transactions. January sales were 43% below the 10-year January sales average. However, things have changed this month, as data from the mid-point of February reveals there have been 878 sales in Greater Vancouver, which is far higher than the 334 that had sold at the mid-point of January, and about 100 more sales than the mid-point of November and December of last year.

Data for the first two weeks of February shows that the sales-to-new-listing ratio hit 48%, double the level in January, when just 24% of new listings sold. This means that, so far this month, nearly one of every two new listings found a buyer. According to the REBGV, there is a correlation between the sales ratio and home prices. Generally, home prices experience upward pressure when the sales-to-listing ratio surpasses 20% over several months, and prices decline when the ratio is consistently below 12%.

Based on REBGV mid-February data, markets with the most sales action include Burnaby North, Burnaby South, and Coquitlam, which posted more sales in the first two weeks of February than in all of January 2023. Vancouver East saw the sales-to-new-listing ratio for condominium apartments hit 69% so far in February.

Although a two-week sales increase may not indicate a long-term recovery in housing sales, the BC Real Estate Association is forecasting that 2024 will be a banner year for residential real estate throughout the province. “We expect a strong recovery, boosted by an expected decline in mortgage rates and record high immigration that will carry significant momentum into 2024,” said BCREA Chief Economist Brendon Ogmundson.

The Bank of Canada has also hinted that its 25-basis-point increase in lending rates on January 25 may be the last one for this year. Skipworth suggests that the stronger February sales may reflect that some homebuyers and investors see 2023 as a “positioning year” in expectation of higher prices and demand in 2024.