A Closer Look at the Numbers Across Canada
Year-over-Year Growth: Despite the monthly decline, September 2023 saw a 1.9% increase in transactions compared to the same month last year. This suggests that the market is still relatively robust year-over-year.
Inventory Levels
Slight Uptick: The national inventory stood at 3.7 months at the end of September, a slight increase from 3.5 months in August. Although this is an increase, it’s still below the levels we saw in the latter half of 2022 and significantly below the long-term average of about five months.
Price Trends
A Mixed Bag: The Aggregate Composite MLS® Home Price Index (HPI) declined by 0.3% month-over-month in September 2023. Interestingly, this dip is solely attributable to market trends in Ontario. Prices in other provinces continue to rise, albeit at a slower pace.
What’s Next?
Housing Starts Exceed Expectations: According to the Canada Mortgage and Housing Corporation, housing starts surged by 8% to 270,466 units, surpassing market expectations of 240,000 units. This could be a key indicator of market vitality.
Interest Rates and Future Trends: The next few months will be crucial in determining whether Ontario’s price softening is an isolated incident or a precursor to similar trends in other provinces, especially given the current interest rate environment.
Housing starts in Canada edged up by 8% over a month earlier to 270,466 units in September 2023, above market expectations of 240,000 units, according to the Canada Mortgage and Housing Corporation.
Housing starts in Canada edged up by 8% over a month earlier to 270,466 units in September 2023, above market expectations of 240,000 units, according to the Canada Mortgage and Housing Corporation.
Vancouver Island Analysis: Given Vancouver Island’s increasing popularity as a residential and investment destination, the year-over-year growth rate in transactions could potentially be higher than the national average. Local data should be analyzed to confirm this hypothesis.
Nanaimo and Vancouver Island Real Estate Market Update: September 2023
Here are some data-driven insights into our local market. Followed by us reviewing some other important national statistics.
Sales Overview
Single-Family Homes: Last month, the Vancouver Island Real Estate Board (VIREB) region recorded 266 sales. This is an 11% increase year-over-year but an 18% decline compared to August 2023.
Condo Apartments: Sales remained consistent at 85 units, identical to August’s figures, but showcased a remarkable 63% year-over-year growth.
Row/Townhouses: A total of 71 units were sold, up 48% year-over-year and down 8% from August.
Inventory Analysis
Single-Family Homes: Active listings stood at 1,173, down from 1,417 a year ago.
Condo Apartments: Inventory was at 305, a slight decrease from 332 in September 2022.
Row/Townhouses: 239 units were available, down from 295 a year ago.
Market Sentiment
Based on the data and my extensive experience in the market, it appears that we are transitioning from a sellers’ market to a more balanced one. This could be an early indication of a market that may soon favour buyers. The higher interest rates seem to be influencing buyer sentiment, causing some to hold out for more favourable conditions.
Price Benchmarks
Single-Family Homes: The benchmark price was $776,200, up 2% year-over-year and 1% month-over-month.
Condo Apartments: The benchmark stood at $399,100, up 1% both year-over-year and month-over-month.
Row/Townhouses: The benchmark was $556,400, slightly up year-over-year but down 1% from August.
Local Spotlight
Nanaimo: Year-over-year benchmark price increased slightly to $802,000.
Comox Valley: Year-over-year benchmark price rose by 6% to $842,000.
Cowichan Valley: Benchmark price stood at $788,600, a 1% increase from September 2022.
Parksville-Qualicum: Benchmark price rose by 2% to $891,800.
Port Alberni: The cost of a benchmark single-family home was $538,000, up 2% from the previous year.
North Island: Benchmark price of a single-family home decreased by 9% to $438,300.
Strategic Takeaways
– Sellers may need to recalibrate their expectations for a quicker sale, given the market’s evolving dynamics.
– Buyers appear to be waiting for more favourable rates and conditions. Now is an opportune time to strategize for a successful transaction.
In September, the Consumer Price Index (CPI) rose 3.8% on a year-over-year basis, down from a 4.0% gain in August. The year-over-year deceleration was broad-based, stemming from lower prices for some travel-related services, durable goods and groceries.
The unemployment rate was unchanged in September and stood at 5.5% for the third consecutive month.
There were 448,000 Canadians receiving regular Employment Insurance (EI) benefits in August, up 9,100 (+2.1%) from a month earlier.
National consumer confidence was down from the previous month in September 2023, continuing a string of monthly declines that started in June, according to the Conference Board of Canada’s survey-based index of consumer confidence.
Concerning real estate trends and job prospects over the next six months, the number of respondents expecting stability was trending at near-record levels but dipped lower in September. The respondents expecting an improvement or decline in job opportunities was relatively unchanged compared to the previous month.
Regarding expectations for their household budget over the next six months in the context of real estate trends, the number of respondents expecting stability moved sideways. However, the number of respondents expressing pessimism over their future financial situation moved higher as the gap between those expressing pessimism and optimism began to grow once again.
Sentiment about making major purchases, like a home or a car, remains at historically subdued levels across the country.
Special Note on Vancouver Island
As always, I’m here to provide you with in-depth analysis of Vancouver Island real estate trends and help you make informed decisions in this fluctuating market. Feel free to reach out for a comprehensive discussion tailored to your real estate objectives.