Overall Market Condition and Pulses for 2024

Inflation: After implementing contractionary monetary policy, inflation dropped from 8% in Q2 2023 to 3.54%-4% in Q3 2023. Recent reports indicate a further decline, with inflation in January 2024 reaching 2.9%. One significant contributor to CPI is mortgage interest costs and rent.

Labor Market: While initially tight, the labor market softened in the second half of the year. On the other hand there has been a surge in immigration, leading to spillover effects in the labor market, housing and health industries.

Overnight Rate: In 2022, there were seven meetings resulting in a consecutive 400-basis point increase in the rate. In 2023, there was a 75-basis point increase in the first three meetings, with the rate remaining constant in the subsequent four meetings. These factors suggest a more modest path in 2023. In line with other macroeconomic factors, it appears we are nearing the end of the cycle. While rates may not return to pandemic-era levels, they are expected to normalize at a new high in the near term. Initial cuts in interest rates may occur in Q3 2024, driven by reduced pressure on prices and low demand due to market recession.

Equities Market: The market has seen a rise following rate cuts by the Bank of Canada.

GDP: Growth observed in 2023, despite a contraction experienced in Q3. The signs of contraction were masked due to population growth. However, per capita GDP has decreased over the last year.

Consumer Confidence: The Survey of Consumer Expectations indicates an increase in consumer confidence in 2003. Expectations for appreciation in housing market prices and home values rose from 2.3% in Q1 to 4.6% in Q4. Conversely, expectations for spending decreased by 5.1% in Q1 and 4.6% in Q4, suggesting households may be preparing to hold back on consumption in the next year.

Resale Market

In 2023, the Greater Vancouver resale market saw a total of 26,249 transactions, marking a 10.3% decline compared to the previous year's 29,261 sales and a significant 41.5% drop from the 44,884 sales in 2021. The sales volume for 2023 fell notably below the ten-year average by 23.4%, reflecting uncertainties stemming from increased borrowing costs that dampened sales activity. As of the year's end, the Greater Vancouver benchmark pricing settled at $1,168,700, showing a 7.4% decrease from peak values observed in April 2022.

Looking ahead to 2024, the dynamics of the pricing and supply conditions are expected to evolve. Following an era of prolonged seller dominance, the definition of a 'normal' market environment is undergoing a transformation. It is anticipated that the sales-to-listings ratio will gradually retreat into the traditional 'normal' range of 12% to 20%, exerting downward pressure on property valuations. While broader economic factors such as shifts in interest rates, employment trends, and overall economic health may impact trends, a gradual adjustment in prices is foreseeable as the market recalibrates to achieve equilibrium between supply and demand.

Presale Market

West Coquitlam and Burnaby stood out as bustling centers for presale activity, fueled by unwavering demand and robust absorptions that extended throughout late Fall. In contrast, high-end markets, particularly Vancouver's westside and downtown areas, faced heightened competition and tighter conditions.

In 2023, Greater Vancouver witnessed the launch of 69 presale projects, marking a decrease from the previous year. These projects collectively introduced approximately 10,006 condominium and townhome units to the market. Concrete towers maintained their dominance as the primary product form, constituting the majority of the offerings launched within the market.