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BANK OF CANADA RATE CUT EFFECT ON VANCOUVER HOUSING MARKET


Blog by Joe Campbell | July 15th, 2015


VANCOUVER (via NEWS 1130) – June was another scorching month in the Vancouver real estate market.

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An industry group says Vancouver home resales rose 28.7 per cent last month from a year earlier to 3,539.

The Canadian Real Estate Association also says the average unadjusted price was up 15.8 per cent to $923,000.

Even on a month-over-month basis Vancouver home prices were substantially higher, gaining 3.6 per cent. That’s more than double the nationwide price increase.

And that means the Bank of Canada’s interest rate drop likely won’t have much of an impact here.

“Four housing, the impact on markets like Vancouver and Toronto, that are already experiencing very strong demand, might be relatively muted. But for other markets that have been more negatively affected by low energy prices, including some areas of northern BC, might see a bit of a boost,” says Brendon Ogmundson, an economist with the BC Real Estate Association.

“Vancouver has demand at a 10-year high and doesn’t really need any extra boost but we might see some marginal effect.”

Ogmundson says the news is good for the rest of the country.

“Vancouver doesn’t need a whole lot of extra stimulus. This sort of action by the Bank of Canada is really more to help places like Calgary that have seen a bit of a downturn given the decline in oil prices.”

The national average sale price rose 9.6 per cent on a year-over-year basis in June; but excluding Greater Vancouver and Greater Toronto, it increased by only 3.1 per cent.

Highlights:

  • National home sales edged back by 0.8 per cent from May to June.
  • Actual (not seasonally adjusted) activity stood 11 per cent above June 2014 levels.
  • The number of newly listed homes edged down 0.2 per cent from May to June.
  • The Canadian housing market remains balanced overall.
  • The MLS Home Price Index (HPI) rose 5.43 per cent year-over-year in June.

Article by Richard Dettman and Simon Druker