“Don’t panic” agent urges as May home sales tank
June 8, 2022
On June 2 a Vancouver real estate agent called on homebuyers and sellers not to panic as housing prices fell month-over-month for the first time in two years and May home sales cratered in Canada’s two largest housing markets.
In a sharp reversal, May housing sales totalled just 2,918 units—down 31.6 per cent from May 2021 and down 10 per cent from April 2022, reports the Real Estate Board of Greater Vancouver (REBGV). April sales were down 25 per cent from the monthly transactions record of March 2022.
While the board’s benchmark composite price index shows a modest 0.3 per cent drop from April, the raw average price of a Greater Vancouver home in May was down $65,000—from the peak high in February 2022—to $1,279,785, according to data provided by Dexter Associates, a veteran Vancouver real estate agency.
“There is panic in the market,” said Kevin Skipworth, a partner and managing broker at Dexter Associates. “But there shouldn’t be.”
The median sold price in Greater Vancouver for May stands at $922,000—down 12 per cent from the February peak and falling below the $1 million level for the third month in a row.
“With interest rates rising, homebuyers are taking more time to make their decisions in today’s housing market,” said REBGV chair Daniel John. “Homebuyers have been operating in a frenzied environment for much of the past two years.”
Some sellers are cutting asking prices in a more competitive market where the number of homes listed for sale shot up 13.8 per cent from April to 10,010 units in May.
Skipworth noted that after other sudden drops in sales and prices—in 2008, 2016 and 2018—the Metro Vancouver market recovered quickly.
“There will always be troughs and peaks, that’s what markets do,” he said.
Still, the downturn is not restricted to Vancouver.
Housing sales in Greater Toronto were down 9.3 per cent in May from a month earlier to 6,207 transactions—38.8 per cent lower than May 2021, according to the Toronto Real Estate Board. The average home price dropped 3.1 per cent month-over-month to $1,176,368 in May 2022 .
Hao Li, a broker with HouseSigma, said many potential homebuyers inked a pre-approved mortgage before the Bank of Canada began raising rates in February. Those 60- to 90-day approvals are running out, he said.
“We’re now starting to see the full effect of rising interest rates on buyers and sellers’ habits,” said Li.