Why slowing Vancouver home sales aren't putting a dent on prices

·2 min read
A real estate for sale sign is pictured in front of a home in Vancouver, British Columbia, Canada, September 22, 2016. REUTERS/Ben Nelms
Vancouver detached home prices are up 20 per cent compared to last year (REUTERS)

Metro Vancouver real estate sales continue to slow from last year's scorching pace but that hasn't led to deals for homebuyers because demand continues to outstrip supply.

The Real Estate Board of Greater Vancouver (REBGV) says 3,149 homes were sold in September, a 13.6 per cent drop from 3,643 in September 2020 and 0.1 per cent dip from the previous month.

Even though sales were significantly lower compared to the same time last year, they were 20.8 per cent above the 10-year September average.

The number of newly listed homes fell 19.2 per cent compared to September 2020, but increased by 28 per cent compared to the previous month. New listings were 1.2 per cent below the 10-year average.

"The summer trend of above-average home sales and historically typical new listings activity continued in Metro Vancouver last month. Although this is keeping the overall supply of homes for sale low, we're not seeing the same upward intensity on home prices today as we did in the spring," said REBGV economist Keith Stewart.

"Home price trends will, however, vary depending on property type and neighbourhood, so it's important to take a hyperlocal look at your location and property category of choice before making a home buying or selling decision."

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

A floor on home prices

Prices, as measured by the MLS Home Price Index composite benchmark, are up 13.8 per cent year over year and 0.8 per cent month over month to $1,186,100.

Detached homes continue to lead the way with a 20.4 per cent increase year over year and 1.2 per cent rise month over month to $1,828,200.

This represents a 20.4 per cent increase from September 2020 and a 1.2 per cent rise compared to August 2021.

Low mortgage rates have helped spark demand, and the lack of homes for sale is helping to put a floor on prices.

The total number of homes currently listed for sale is down 29.5 per cent compared to September 2020. Although up 2.6 per cent compared to the previous month, the total number of homes listed for sale is 27.7 per cent below the 10-year September average.

"The total inventory of homes for sale remains insufficient to meet the demand in today's market. This scarcity limits people's purchasing options and ultimately adds upward pressure on home prices," Stewart said.

"With the federal election now behind us, we hope to see governments at all levels work with the construction industry to streamline the creation of a more abundant and diverse supply of housing options."

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

Download the Yahoo Finance app, available for Apple and Android.