At Oakwyn we’re always wanting to present the facts in an engaging way. Every month, one of our agents will unpick current market statistics from the Real Estate Board of Greater Vancouver to help you understand what’s going on in the real estate market and what you should be looking out for.
For February’s statistics report, we have Adam Chahl here to detail another intriguing month. Read on for his insight into the changing February market.
Increases Across the Board
February saw 3,424 sales, representing an almost 50% increase compared to January 2022. The February numbers are 26.9% above the 10-year average, which is the most important baseline figure to track growth.
The inventory level increase that Adam predicted in December is here as the spring market takes off. There were 5,471 new listings in February, 31.2% more than we saw in January 2022. Notably, these statistics may indicate more than just the usual spring escalation. Compared to February of 2021, there were 8.4% more new listings in February this year.
The average detached price in Vancouver last month was $2,044,800, which is a 4.7% increase from January. As Adam noted, the price growth in Vancouver isn’t slowing anytime soon.
One last critical increase is in the Bank of Canada’s interest rate. After delaying this raise in January due to the impact of Omicron, the Bank of Canada has now announced that they are increasing their interest rate 25 basis points. This brings our overnight lending rate, which is the rate that a buyer’s mortgage is calculated on, to 0.5%.
How Will This Impact Sales?
Adam spoke with Aimal Pamir from Dominion Lending about what this increase in mortgage rate will mean for the average consumer. According to Aimal, we will not see a huge difference for buyers without a significant increase in mortgage rates. We are not predicting an increase in defaulting or buyers being restricted in what they can afford.
As Adam explains, in Canada potential buyers qualify for a mortgage based on a stress test. The stress test allows buyers to show that they could still afford their mortgage even if interest rates rise. The stress test rate right now is 5.25%, so it would require a significant increase in the overnight lending rate—that is, more than the 0.5% just announced—for buyers to be impacted.
Meanwhile, Adam noted that, based on unofficial numbers, the inventory level increases have resulted in a reduction in the number of offers. With more properties available, buyers have more power to choose the best fit for them and their income. As ever, we’re hoping that the flourishing we’re seeing in the spring market, with more properties coming online every month, will help ease the current pressure cooker of demand that outsizes supply.
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Work with your Oakwyn agent, work with your trusted real estate advisor, and come up with a plan that makes sense for you in 2022 if you’re thinking about making a move.