Fraser Valley Residential Land Market Report, Vancouver BC

Key Take-Aways from the May Statistics

Most key metrics in the Fraser Valley Real Estate Board’s May housing report suggest the market is softening; however, there is speculation that the softening is partially attributed to home buyers taking a ‘wait and see approach’ in anticipation of the Bank of Canada’s June 5th interest rate announcement. Regardless, demand moderated slightly, and prices appear to have equalized.

Highlights from the Fraser Valley Real Estate Board’s May statistics include:

Single Family Homes outperformed townhomes and condos with 15.2% growth in sales, while both attached homes saw decreases compared to last month
Benchmark Prices stopped rising, holding relatively flat for all home types
New Listings climbed 33-37%, month-over-month pushing active listings up to or slightly over the 10 year average
New listings declined 1-13% depending on home type
Average days on market crept up slightly for all home types, contributing to an increase in active listings

How the Fraser Valley land market is reacting

Similar to the resale market, some developers and project marketing firms reported a decrease in traffic at sales centres resulting in a mild slowdown in sales although holding at reasonable absorption rates. I say ‘some’ because there were a handful of incredibly successful project launches and extraordinary absorption at other projects. Thankfully, the good news outweighed the reports of softening and May saw steady offer activity on residential development sites as quality assets became more difficult to shake loose, particularly serviceable townhome sites.

The buzz around the capital gains inclusion rate mostly faded into the rearview as the Bank of Canada’s June 5th interest rate announcement became the topic of conversation over the past few weeks. There is speculation that the BofC’s announcement is to blame for the deceleration in sales, so sentiment remains positive in the land market with multiple offer situations showing up for well-priced sites. Land values remain well below peak pricing from two years ago, but proforma input values have mostly stabilized (aside from municipal/regional development fees) reducing uncertainty in underwriting. That additional confidence combined with chronic housing supply issues have developers bullish on the future and eager to acquire their next site.

A snapshot of key metrics

May 2024

Detached homes

The single family detached home market is consistently the first segment to move, either up or down, when the market is shifting. As a result, we look to this segment as an indicator for market directionality and velocity.

Home sales in the Fraser Valley

The following charts summarize the month’s total home sales throughout the Fraser Valley.

Days on Market

Days on Market is the average length of time listings of that home type stayed on market before selling firm. This metric is an indicator of competition among buyers and the month-over-month change can tell us whether the market is accelerating or decelerating.

New and active listings in the Fraser Valley

New listings is the cumulative quantity of listings posted for the month. Active listings is the quantity of active listings on the last day of the month.

Listings over time

Listing metrics tend to be seasonally cyclical making month-over-month reports misleading as indicators of market shifts. The below chart shows each month's active and new listings over the past decade. The current month is highlighted on each line to illustrate how today's data compares to the past 10 years of data for the same month.

HPI benchmark prices

HPI Index establishes "Benchmark Prices" for a typical home in each major housing category. Benchmark Prices, as a relative metric, tend to be a more accurate indicator of market direction and velocity as they are not subject to the composition of home types being sold, like average home prices.