Welcome to the review of Metro Vancouver’s real estate market for June. This month’s sales and inventory numbers are quite similar to last month. Sellers seem to anticipate an increase in sales activity due to the Bank of Canada’s overnight rate finally dropping.
Consequently, they are putting their houses up for sale. However, buyers seem to feel that the 0.25% drop in the rate isn’t significant enough. As a result, sales remain 23.6% below the 10-year seasonal average, while inventory is 20.3% above the 10-year seasonal average.
The sales-to-active listings ratio continues to decline across all categories, leading to a drop in benchmark prices. This ratio measures supply and demand; a 20% ratio means that 20 units are sold for every 100 units in inventory within a month. Traditionally, a ratio between 12% and 20% is considered a balanced market with stable prices. However, as seen from the table, this varies by category. Following the trend may offer more predictive insights. The trend suggests that unless new stimulus arises, there will be continued downward pressure on prices.
Another factor contributing to price pressure is the large number of upcoming mortgage renewals. As you can see from the chart that about 35% of the mortgages at the big banks will renew in 2026 and another 22% in 2027. It is expected that some renewals will result in monthly payments high enough to force some owners to sell. While some predict this will have a significant impact, I believe lenders and the government will adjust rules if necessary. The government supports maintaining real estate prices, as evidenced by allowing variable rate mortgage borrowers to continue making payments that don’t cover the monthly interest.
If banks adhered strictly to the rules, more people would have sold or defaulted. Additionally, as the Bank of Canada continues to lower rates, payment increases will be lessened.
Have a great month!
