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Highlights of the December 2024 Real Estate Market

The December 2024 real estate market brought a strong finish to the year, with sales up 31% compared to December 2023. This momentum closed a year that saw renewed buyer activity driven by declining interest rates and optimism about what lies ahead. But as we head into 2025, the market continues to face challenges, from new tax policies to constrained supply in key segments like townhomes. Here’s a look at the highlights from Dexter Realty’s December report and what they mean for the coming year.

Key Highlights

  • Sales Surge: December sales in Greater Vancouver increased 31% year-over-year and 35% compared to December 2022, driven by declining interest rates and pent-up demand.

  • Q4 Sales Up: Fourth-quarter sales were 30% higher than in 2023 and 36% higher than in 2022.

  • Townhomes in Demand: Townhome sales rose 55% year-over-year, reflecting strong demand in this segment.

  • Interest Rates Drop: The Bank of Canada’s 50-basis-point rate cut in December spurred buyer activity, with another 25-point cut anticipated in January.

Interest Rates and Policy Shifts

Interest rate cuts have provided much-needed relief for buyers, but new tax policies present hurdles for both buyers and sellers. The provincial flipping tax, effective January 1st, 2025, imposes a 20% tax on profits for properties sold within one year, declining to 0% in the second year. This builds on the federal tax introduced in 2023, which treats such profits as income. These measures could influence seller behavior, particularly in the presale and assignment markets.

Meanwhile, new mortgage rules effective December 2024 are creating opportunities for buyers, including extended 30-year amortizations for presales and an increased threshold for insured mortgages up to $1.5M.

Market Activity

December defied expectations as the slowest month of the year, with 1,765 properties sold. While this was a decline from November’s 2,181 sales, it far outpaced December 2023 and 2022. Sellers were also active, with 1,737 new listings—54% fewer than November but 35% more than the same time last year.

However, inventory tightened as December progressed, with active listings at 10,948 by month-end—a 23% increase year-over-year but far below earlier peaks in 2024.

Segment Breakdown

  • Detached Homes: Sales rose 31% year-over-year, with 8 months of supply keeping this segment balanced.

  • Townhomes: The hottest segment, with just 4 months of supply, firmly in seller’s market territory.

  • Condos: Sales increased 23% year-over-year, with inventory up 30%, presenting opportunities for first-time buyers and investors.

Looking Ahead to 2025

The stage is set for an improved real estate market in 2025, with declining interest rates expected to sustain buyer activity. However, supply constraints—particularly in new developments—remain a challenge that could limit options for buyers and drive competition.

New listings are anticipated to pick up in January and February, but whether supply growth matches demand will be a key factor in determining price trends. With federal immigration targets softening and rental prices beginning to decline, the market faces a mix of opportunities and uncertainties.

Opportunities and Challenges

For buyers, the condo market offers increasing opportunities, especially in areas with higher inventory. Townhomes remain scarce, so buyers should act quickly when options become available. Sellers may find that strategic timing—considering both tax implications and evolving market dynamics—will be crucial to maximizing returns in 2025.

Conclusion

As we turn the page to a new year, the real estate market continues to evolve. Whether you’re a buyer, seller, or investor, understanding the dynamics at play is essential to making informed decisions. With interest rates likely to decline further and market activity expected to remain strong, 2025 promises to be another fascinating year for Vancouver real estate.

Ready to navigate the market in 2025? Let’s connect to discuss your goals and how you can make the most of the opportunities ahead.

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Highlights of the May Real Estate Market

The first Bank of Canada rate cut since 2020 – now what?

  • The Bank of Canada cut interest rates for the first time since 2020, providing a small relief for variable-rate mortgages and lines of credit. This could be a signal for buyers to re-enter the market, with more rate cuts potentially coming in July.

Active listings in Greater Vancouver are up 46% from last year

  • Greater Vancouver saw a significant increase in active listings, up 46% year-over-year, with a notable rise in townhouses and condos.

Buyers are being patient; sales dipped in May

  • Despite the influx of new listings, sales dipped in May, with buyers showing patience. Total sales in Greater Vancouver were down 20% from May 2023 and 3% from April 2024.

Watch the Micro Markets closely

  • The market activity varies significantly across different areas and property types. For example, detached houses on Vancouver’s West Side remain competitive, while condos under $1 million are slower to sell.

Prices are relatively flat and some are down in the last 6 months

  • Overall, prices have remained flat or have decreased slightly over the last six months, influenced by the increased supply and cautious buyer behavior.

Market Insights

  • Sales and Listings Trends: Active listings in Greater Vancouver reached 13,600 by the end of May, up from 12,491 in April and 10,552 in March. New listings in May were 6,484, down from the April peak but still robust compared to historical averages.

  • Micro Market Variations:

    • Vancouver Westside: Sales increased by 6% from April but were down 20% year-over-year.

    • Vancouver East Side: Sales decreased by 5% from April and 9% year-over-year, with active listings up 45% from last year.

    • North Vancouver: Sales were almost flat from April, with active listings up 55% year-over-year.

  • Inventory and Supply: The overall months of supply in Greater Vancouver increased to 5 months, indicating a balanced market, though specific areas like North Vancouver and Port Coquitlam remain more competitive with lower months of supply.

  • Buyer and Seller Dynamics: Buyers are cautious, likely influenced by the high-interest rates and anticipation of further rate cuts. Sellers, motivated by various factors including regulatory changes and capital gains, have increased listing activity, providing more options in the market.

Conclusion

The Greater Vancouver real estate market is in a state of flux, with a significant rise in listings and cautious buyer activity. The recent rate cut by the Bank of Canada could shift the dynamics, potentially spurring more buyer engagement in the coming months. However, the market's micro-variations mean that both buyers and sellers need to stay informed and adaptable to the ongoing changes.

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