Greater Vancouver real estate prices were slow to respond to higher rates, but it’s making up for lost time. Real Estate Board of Greater Vancouver (REBGV) data shows composite home prices made a sharp drop in November 2022. Since peaking earlier this year, the price of a typical home has dropped by more than $130,000, and annual growth has finally turned negative.
Greater Vancouver Home Prices Fell At Nearly 2x Toronto’s Rate
Greater Vancouver residential real estate prices are starting to decline sharply after a slow response to higher rates. The REBGV benchmark price fell to $1,131,600 in November, down 1.5% (-$17,200) for the month. This was nearly twice the rate Greater Toronto real estate reported this morning. Compared to last year, a typical home is now 0.6% (-$6,800) lower, before accounting for losses to inflation.
Greater Vancouver Real Estate Are Off The Peak
The composite benchmark price of a home across Greater Vancouver.
Source: REBGV; Better Dwelling.
Greater Vancouver Home Prices Have Dropped $131k Since Peak
Annual growth has been decelerating at a rapid rate this cycle. Growth by this measure peaked at 21% in February 2022, and tapered over the next 9 consecutive months to the negative growth we saw last month. The annual rate is now at the lowest level since January 2020, and we’re down substantially from the peak.
Greater Vancouver Real Estate Price Growth Is Decelerating
The 12-month percent change for the composite benchmark price of a home across Greater Vancouver.
Source: REBGV; Better Dwelling.
Peak buyers are experiencing a bloodbath, though it’s not as bad as the national market. Vancouver prices peaked April 2022, and have since fallen 9.2% (-$131,900) as of November. That’s a substantial decline, especially with such steep prices. However, this was much smaller than the -15% national rate reported a few weeks prior.
Home Prices Are Only 8.3% Higher Than 5 Years Ago
Greater Vancouver home prices have produced less than stellar returns over the medium-term. REBGV data shows over the past five years, home prices have increased just 8.3% (+$86,725). That compound annual growth rate (CAGR) works out 1.6% per year. For context, the NASDAQ composite showed 6.6% CAGR over the same period, so even leveraged housing returns would fail to have outperformed.
Greater Vancouver real estate prices were slow to respond to higher interest rates, but they’re picking up pace. It’s the type of response more typical of interest rates throttling credit, as opposed to Toronto’s immediate response that was more indicative of buyer psychology changing. With rates set to continue rising, it’s hard to see the price declines ending any time soon—especially with such a substantial drop in November.
