Home sales in 2023 will remain in line with last year while prices may see small increases, according to the Real Estate Board of Greater Vancouver’s first 2023 Residential Market Forecast.
The forecast looks at current and historical market trends alongside economic factors like inflation and risk of recession to predict what 2023’s housing market will look like.
A second forecast will be coming in the second half of the year.
Key highlights
- The Bank of Canada is at, or very near, the peak of the current interest rate tightening cycle.
- Apartment sales are forecast to decrease over last year, while detached homes are forecast to increase.
- While increasing mortgage costs are decreasing purchasing power, other factors will continue to put upward pressure on prices.
Sales in 2023 to remain similar to 2022 activity
Metro Vancouver home sales set or neared historic records in 2021 and 2022 on both ends of the spectrum. Sales activity hit a record high in March of 2021 and closed 2022 near historic lows after accounting for typical seasonal variation.
The key economic variable most responsible for this oscillation between extremes has been the spike in mortgage rates, as a result of the Bank of Canada rapidly raising the policy interest rate to quell inflationary pressures not seen in the country in more than thirty years.
At the time of publication, inflation remains stubbornly high, despite the Bank of Canada’s historically monumental efforts to bring inflation back to their preferred target range of between one and three per cent. Largely because of this, mortgage rates are expected to remain higher than market participants had been used to in recent times.
To read the REBGV Market Forecast Report click here.
© REBGV Real Estate Board of Greater Vancouver 2023