Fraser Valley May from AY Key Take-Aways from the May Statistics
Most key metrics in the Fraser Valley Real Estate Board’s May housing report suggest the market is softening; however, there is speculation that the softening is partially attributed to home buyers taking a ‘wait and see approach’ in anticipation of the Bank of Canada’s June 5th interest rate announcement. Regardless, demand moderated slightly, and prices appear to have equalized.
Highlights from the Fraser Valley Real Estate Board’s May statistics include:
- Single Family Homes outperformed townhomes and condos with 15.2% growth in sales, while both attached homes saw decreases compared to last month
- Benchmark Prices stopped rising, holding relatively flat for all home types
- New Listings climbed 33-37%, month-over-month pushing active listings up to or slightly over the 10 year average
- New listings declined 1-13% depending on home type
- Average days on market crept up slightly for all home types, contributing to an increase in active listings
How the Fraser Valley land market is reacting
Similar to the resale market, some developers and project marketing firms reported a decrease in traffic at sales centres resulting in a mild slowdown in sales although holding at reasonable absorption rates. I say ‘some’ because there were a handful of incredibly successful project launches and extraordinary absorption at other projects. Thankfully, the good news outweighed the reports of softening and May saw steady offer activity on residential development sites as quality assets became more difficult to shake loose, particularly serviceable townhome sites.
The buzz around the capital gains inclusion rate mostly faded into the rearview as the Bank of Canada’s June 5th interest rate announcement became the topic of conversation over the past few weeks. There is speculation that the BofC’s announcement is to blame for the deceleration in sales, so sentiment remains positive in the land market with multiple offer situations showing up for well-priced sites. Land values remain well below peak pricing from two years ago, but proforma input values have mostly stabilized (aside from municipal/regional development fees) reducing uncertainty in underwriting. That additional confidence combined with chronic housing supply issues have developers bullish on the future and eager to acquire their next site.