Written by: Buffini & Co Owning a home has long been a cornerstone of the Canadian Dream. Although the real estate market has shifted over the last century, homeownership continues to be a goal many hope to ultimately achieve. 1914 - 1918

• Workers flocked to cities to work in war-related industries.
• There was insufficient housing for this rise in population.
• Building materials diverted to the war effort contributed to shortages.

1930 - 1960

• The Great Depression's widespread unemployment resulted in low homeownership.
• 1944's National Housing Act helped homeowners with mortgage insurance and low-income housing.
• Suburbia grew in the 1950s as homeowners moved out of cities.

1970 to Today

• Increased immigration during the '80s and '90s contributed to higher demand for housing.
• The Canada Mortgage Housing Corporation implemented programs to help housing affordability.
• Homeownership rate has hovered around 68% since 2019.

 

Buying or Selling a Home in 2025?

Preparing ahead of time as much as possible will help make the process go smoother. If you're looking to buy

• Get preapproved by a qualified mortgage lender.
• Start a designated down payment account.
• Hold off on other major expenses.

If you're looking to sell

• Start getting organized and declutter.
• Spruce up your curb appeal.
• Make needed repairs and cosmetic updates.

If you're a renter

• The number one thing you can do is improve your credit by paying down debt.

Written by" Kevin Skipworth of Dexter Realty It’s a new year, but one with the anticipation of continued interest rate reductions. The Bank of Canada meets again on January 29th, following their rate cut of 50 points in December. With a month of political and economic headwinds to come, the 25-point drop that’s currently expected could see more swings than the Vancouver Canuck’s season so far. Unfortunately, the new year also brought a new round of legislation for British Columbia property owners to navigate. On January 1st, the provincial government’s flipping tax came into effect. Anyone who sells a property within one year of purchasing, starting January 1st for any sales, could be taxed 20% on any profits with that tax declining in the second year to zero. This is in addition to the federal tax that came into effect in 2023 which taxed any profits as income for properties sold within one year. This new provincial tax targets not just resales but presales and the assignment of them as well. Certain life event exemptions may apply. It remains to be seen whether the provincial government will double the Speculation and Vacancy Tax in 2025 on properties as promised during the election. Just a few things for buyers and sellers to navigate this year. The question is: how active will buyers be as we venture into a year with economic and political uncertainty still ahead?  

Sales saw a final-quarter spike in 2024 versus other years.

There were 1,765 properties sold in Greater Vancouver in December after, 2,181 properties sold in November, 2,632 properties sold in October, and 1,852 sold in September. Fourth quarter sales in Greater Vancouver were 30% higher than the fourth quarter of 2023 and 36% higher than the fourth quarter of 2022. Some areas around Metro Vancouver experienced a greater number of sales in December than in November, such as Richmond and New Westminster. Meanwhile, Pitt Meadows, Maple Ridge and Aldergrove saw sales in December right near the totals for November. With the Bank of Canada rates coming down, buyer activity increased. The Bank of Canada’s final rate announcement for 2024 produced another jumbo rate cut of 50 points, which pushed some buyers to jump back into the market last month. This buyer re-engagement trend is likely to continue as January comes out of the holiday season mode. The question is: how active will buyers be as we venture into a year with economic and political uncertainty still ahead? That was supposed to be a 2024 problem but with the US government change and a federal election in Canada (at some point), politics could play a role in real estate and the economy. Sales in December were a 31% increase from the 1,345 properties sold last year and a 35% increase from the 1,303 sales in December 2022. As interest rates likely come down further, albeit at a slower pace in 2025, buyers won’t face the same spectre of obtaining mortgages at much higher rates then they experienced in the last two years. That led to more activity last fall compared to the last few years and as the spring market approaches, it will have an impact on how the real estate market plays out this year. There is more optimism and opportunity in the real estate market, especially with new mortgage rules that took effect in December allowing for presale buyers to amortize their mortgage over 30 years and increasing the threshold for insured mortgages to $1.5 million. The provincial flipping tax, which started on January 1st, may keep some sellers on the sidelines as they wait out the two-year period. And for those buyers looking to purchase a property and renovate, they may think twice. Not great for those other buyers who would prefer purchasing a renovated property. Greater Vancouver sales in December were 12% below the ten year average after November sales were 13% below the ten year average and October sales were 5% below the ten year average – all of which was far better than September and August where total sales were 26% below the ten year average. For a December that is typically the slowest month of the year for real estate activity, there was a surprising amount this year. Just ask some real estate agents that had offers come in on New Year’s Eve. Overall, total sales for the year were 26,560 in Greater Vancouver. This was slightly ahead of 2023 when 26,249 homes sold but still less than the 29,227 sales in 2022 – although 2022 saw 65% of the year’s total sales in the first six months prior to the start of rate hikes that year. In 2023, 55% of total sales were in the first half of the year while 2024 was more balanced with 52% of total sales in the first half. This showed that momentum in the market was picking up as the second half of the year moved on.  

New listings dropped in December.

In Greater Vancouver due to the holiday season, the number of new listings declined in December. There were 1,737 new listings in December, which were down 54% compared to November but up 35% compared to the 1,303 new listings in December of last year. Sellers and buyers were far more active than we’ve seen in the last three years for the month of December. And with 1,300 listings having expired at the end of December and others taking their properties off the market over the holidays, some will come back on in January and February as market conditions continue to improve. The total number of new listings in 2024 came in at 60,386 which was up significantly from the 50,883 in 2023 and the 55,028 in 2022. This was still fewer than 2021 when 63,711 new listings came out due to that year having one of the most active years on record for real estate sales. The number of new listings in December were right at the ten year average after November was 5% above the ten year average, October 20% above the ten year average and September at 16% above. So, while we did see more listing activity in 2024, we saw that wane as the year went on. As the inventory of homes crept up through the year, some sellers were not keen to adjust prices to meet the expectations of buyers and the reality of more competition. The wait until 2025 and lower rates may have entered the minds of some sellers as the fall market moved on. Buyers certainly hope to see more listings come on in 2025 to give more buying choices with these lower interest rates.  

Active listings came down again.

There were 10,948 active listings in Greater Vancouver at month end, compared to 13,245 at the end of November. After several listings expired at the end of December and others came off through the month of December, January started with just over 9,600 active listings. This was 23% above the total active listing count at the start of 2024. While above last year, that difference had grown to 46% year-over-year in May 2024. While buyers had more choice through 2024, that choice diminished as the year went on. Will we see it grow again in 2025? Perhaps not to the same level but more choice would lead to more transactions and keep price growth limited. Months of supply overall stayed steady at six in Greater Vancouver. The detached market in Greater Vancouver was the same at eight months’ supply compared to November while townhomes remained at four months’ just below the condo market at five months’ – bordering on a seller’s market while townhomes are firmly entrenched in a seller’s market. North Vancouver, Richmond, Burnaby, New Westminster, Port Moody, Port Coquitlam, Maple Ridge, Abbotsford and Cloverdale range from two to three months’ supply and Pitt Meadows with one month’s supply. Townhome sales in December in the region were up 55% compared to December last year, showing what was on buyers’ shopping lists for this holiday season. Detached homes saw a 31% increase in sales year-over-year while condos were up 23%. The condo inventory is up 30% year-over year, while townhomes are up 23% and detached homes are up 20%. There is more opportunity in the condo market for buyers, some areas more so than others. That means it’s a good opportunity for first time buyers and investors and shows why it’s important to understand each market. Signs are pointing to an improved real estate market in 2025. More transactions will occur, and prices will be impacted by the number of property listings. Who is more active in 2025 will direct where prices go – if there are more buyers than sellers then we’ll see more pressure on prices. There is pent up demand in the market, and arguably pent up supply. But with many new home developments on hold or not viable in current market conditions, supply in the next two to five years will continue to be a challenge. Rental prices are declining, in part due to the supply of new rental buildings being built and economic conditions making it challenging for renters. It’s been a while since landlords have had to compete for tenants, and with a decrease in federal immigration targets, that could continue. The story of 2025 is yet to be written, but like the previous years in this decade, it is bound to be an interesting one again.  

Written by: Dr. Sherry Cooper & Associates

Good News On The Inflation Front

The Consumer Price Index (CPI) rose 1.9% year-over-year (y/y) in November, down from a 2.0% increase in October. Slower price growth was broad-based, with prices for travel tours and the mortgage interest cost index contributing the most to the deceleration. Excluding gasoline, the all-items CPI rose 2.0% in November, following a 2.2% gain in October. Prices for food purchased from stores rose 2.6% year over year in November, down slightly from 2.7% in October. Despite the slowdown, grocery prices have remained elevated. Compared with November 2021, grocery prices rose 19.6%. Similarly, while shelter prices eased in November, prices have increased 18.9% compared with November 2021. Monthly, the CPI was unchanged in November, following a 0.4% increase in October. On a seasonally adjusted monthly basis, the CPI rose 0.1%. Year over year, gasoline prices fell slightly in November (-0.5%) compared with October (-4.0%). The smaller year-over-year decline resulted from a base-year effect as prices fell 3.5% month over month in November 2023. Monthly gasoline prices were unchanged in November. The shelter component grew slower in November, rising 4.6% year over year following a 4.8% increase in October. Yearly, rent prices accelerated in November (+7.7%) compared with October (+7.3%), applying upward pressure on the all-items CPI. Rent prices accelerated the most in Ontario (+7.4%), Manitoba (+7.9%), and Nova Scotia (+6.4%). Conversely, the mortgage interest cost index decelerated for the 15th consecutive month in November (+13.2%) after rising 14.7% in October. The mortgage interest cost and rent indices contributed the most to November’s 12-month all-items CPI increase. The central bank’s two preferred core inflation measures stabilized, averaging 2.65% y/y in October and November. Both core inflation measures rose a solid 0.3% m/m in seasonally adjusted terms and are up at a 3+% pace over the past three months. Excluding food and energy, the ‘old’ core measure dipped to 1.9%y/y, its first move below 2% in more than three years. Bottom Line This was a mixed report, with headline inflation and the old core indicator dipping to 1.9%, but the Bank of Canada’s preferred measures of core inflation remained sticky at an average of 2.65% y/y. The Bank had been expecting core inflation to average 2.3% for Q4. The mixed news on the inflation front validates the Bank’s intention to ease monetary policy more gradually, in 25 bp tranches, rather than the 50 bps cuts on the past two decision dates in October and December. The deepening decline in the Canadian dollar- now at 0.6988 cents relative to the US dollar- is another reason for the reduction in rate cuts. The overnight policy rate is still likely to fall from 3.25% today to 2.5% by the Spring. It will decline even further if the economy stalls and unemployment rises further. The overnight rate was at 1.75% before the pandemic.