The Vancouver Life Real Estate Podcast

This week we unpack the recent Bank of Canada decision to hold interest rates steady at 5% and we review the latest stats for the month of August from the REBGV. With respect to interest rates the market got the hold it was hoping for and considering our recent history of 10 rate hikes and 3 holds, this decision came at a crucial juncture for Canada's economic landscape. The central bank's press release revealed that while inflation remained stubbornly high, the Canadian economy actually contracted in the second quarter of the year, which likely presented a dilemma for policymakers and helped enforce the decision to pause rates. They were faced with compelling reasons to both raise and lower rates but ultimately chose to maintain the status quo.One of the key statistics that caught everyone's attention was the significant miss in Canada's GDP growth projection for the second quarter. It was expected to grow by 1.5%, but instead, it contracted by 0.2%. This sudden economic setback raised concerns and provided the backdrop for the Bank of Canada's decision.On the employment front, the picture was more stable. Employment remained strong which was a sharp contrast to the previous month that shed more than 60,000 jobs. 40,000 jobs were added in the month of August while at the same time another 100,000 people immigrated to Canada in August! However, with that said, the central bank still pointed to "excess demand easing" and emphasized the lagging effects of previous monetary policy decisions as reasons for holding rates. The Bank also expressed its concern about underlying inflationary pressures and asserted its readiness to raise rates further if necessary, underscoring its commitment to restoring price stability and reducing inflation.August sales numbers were relatively flat, and that’s to be expected this time of the year as it’s a historically slow month. Total sales saw a notable 21.5% increase from the previous year, a significant shift attributed to more people entering the market, even at the current 5% interest rate. This was surprising and reiterates that markets respond to stability. This time last year, rates were increasing at an incredible pace but were still half of what they are today. However, despite this surge in sales, the numbers remained 13.8% below the 10-year average, indicating a market still struggling to reach its full potential.New listings also saw an 18% increase compared to the previous year, but they remained 5.3% below the 10-year average, pointing to a persistent lack of inventory. The most intriguing aspect of the August statistics was the inventory situation. Overall inventory dropped by 6.5% compared to July, marking the first decline in seven months. Although inventory remains below 10,000 units for the eighth consecutive month. Get this and so much more as we take a deep dive in this weeks episode. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

This week we took a look at how the month of August was rounding out as well as providing our predictions for the Fall Market and the highly anticipated interest rate announcement next week. There have been 2,300 sales with a 20% year-on-year increase. However, these numbers are still below long-term averages. The inventory has remained consistently below 10,000 properties for the ninth consecutive month. The sales-to-active-listings ratio is approximately 24%, indicating that it still remains a seller's market throughout 2023, except for January. While average prices have increased by $10,000, the median prices have plummeted, experiencing an 8% decrease or a drop of $78,000 to $900,000, erasing all gains made in 2023. Various sources suggest that the BoC is expected to hold steady at 5.00%, with a minority anticipating one more rate increase. These predictions are based on assessments from Reuters, RBC, Oxford Economics, and interest rate future markets. With that said, there's still about a 30% chance of a 0.25% interest rate change in September and a 70% chance by the end of the year. The decision by the Bank of Canada (BoC) to raise rates could cool the market further, dampen consumer confidence, and restrict credit flow even more putting the risk of recession very much at the forefront.We also look at the first and second-quarter GDP results which are likely to show a sharper slowdown in economic growth, with an expected growth rate of 1.1%, down from 3.1% in the first quarter and below the BoC's estimate of 1.5%. Historically, there’s typically an uptick in activity throughout September and possibly October which could help stabilize prices, however, the housing market is likely to continue to slow down as the overall economy inches down and unemployment rises. A moderate recession could change the narrative around interest rates and inflation but are likely to be months if not at least a year away from recovery. Tune into this weeks podcast and catch our other predictions about the fall market - What will rents do? Are prices still going to rise? _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In recent times, the global economy has witnessed unexpected shifts in inflation rates, interest rates, and various economic indicators that have significant ramifications for the housing market. This synopsis delves into the multifaceted implications of these changes and how they are shaping the present and future landscape of real estate in Vancouver and Canada.The August Inflation print has taken economists by surprise by exceeding initial estimates. While the anticipated inflation rate was around 3%, it surged to 3.3%, a substantial increase from the previous 2.8%. Although economists had predicted a rise, the extent of the increase caught many off guard. A primary driver of this inflation is the significant surge in mortgage interest costs, soaring by an alarming 30% year over year! This inflationary pressure has led to market uncertainties, influencing sentiments and investment decisions.The unexpected inflation surge has also spurred adjustments in interest rates. The next central bank meeting, scheduled for September 6th, holds pivotal importance as it will influence the fall market sentiment. Market forecasts have priced in a 90% chance of an interest rate hike within the year and a 30% chance of a hike at the upcoming September meeting.Current estimates indicate interest rates will stay elevated at their current rates for at least another year and unlikely that we will see interest rates cuts for some time. Market predictions and central banks have repeatedly pushed back the anticipated timeline for rates to decrease, causing uncertainties for those seeking stable, lower rates. The effects of rising interest rates are reverberating through the mortgage market. Borrowers who enjoyed historically low rates over the past five years are now confronted with the possibility of refinancing at higher rates, around 5% to 6%. This substantial rate hike translates to a 50% increase in mortgage payments. The surge in inflation has not only impacted interest rates but also propelled bond yields to a 16-year high of 4.15%. This surge in bond yields has contributed to pushing fixed mortgage rates even higher, dampening the enthusiasm of potential homebuyers. The average fixed mortgage rate offered by leading banks hovers around 5.6%, further exacerbating concerns about affordability.Despite economic fluctuations, population numbers continue to surge. International student admissions have risen by 21% year over year, with temporary workers experiencing an even more staggering 45% increase in June and a 71% increase for the second quarter. This influx of temporary workers has elevated the ongoing public discourse about the potential negative impacts of population growth on the overall economy and social infrastructure. Is immigration the real problem - or is it the lack of housing supply over the last 40 years the real contributing factor to this issue?We discuss this and many of these points on this weeks episode. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In the ever-evolving landscape of the Vancouver real estate market, homebuyers find themselves grappling with a compelling question: How long will they be forced to navigate the challenges imposed by elevated interest rates? In this insightful episode, we engage in a candid conversation with Mychal Ferrera, the No. 1 BMO Mortgage Specialist in the country, to gain a comprehensive understanding of the current state of interest rates as we try to anticipate their trajectory for the remainder of 2023. We also focus on the Top 5 most frequently asked questions that dominate the minds of those considering property purchase in this challenging environment. Variable Rate versus Fixed Rates? How much of my monthly income should I expect contribute to home ownership especially considering how expensive it’s become? Furthermore, we delve into pertinent topics such as signs of panic selling, major debt restructuring, the dynamics of new mortgage originations, and the unconventional economic circumstances that are defining this time.It was somewhat expected that this month's inflation rate has surged to 3.3% over the past month, marking a 0.5% increase. Notably, the cost of mortgages has surged by an alarming 30.6% over the course of the year. Amidst these disconcerting statistics we discuss the potential for interest rate stability and whether the BoC will raise rates in September. We both take a different stance of this and for very different reasons.We also discuss whether Buyer’s should go ahead with the decision to purchase amidst high rates or if they should wait for a more favourable climate? Mychal provides great insights into the advantages and disadvantages of both approaches. He addresses the potential repercussions of delaying purchase decisions and how to navigate your financial position in this challenging time. Check out the episode for more information!Contact Mychal:mychal.ferreira@bmo.com778.288.3173@mychalmortgages _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

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The Vancouver real estate market, is facing a persistent and thorny challenge with low inventory that shows no signs of abating. This week week we delve into the factors contributing to the prolonged shortage of housing in Vancouver, exploring the implications for potential buyers in the marketplace.Currently, the Vancouver market requires an influx of approximately 60% more inventory to achieve a balanced and sustained state. However, the phenomenon of low inventory is not a recent development here; it has been a consistent feature of the Vancouver real estate landscape over the past two decades. The city has experienced a sustained buyers' market only two times in the last two decades – during the Global Financial Crisis (GFC) and in 2012 for a combined total of 14 months. Interestingly, these downturns were not primarily due to a surge in listings but rather a decrease in buyer activity.The construction industry, the tip of the proverbial real estate spear, is showing a concerning downturn. Immigration, which was anticipated to boost the sector, has not produced the desired effects. Last month alone, the industry lost 44,000 jobs, marking a 4% decline over the past three months. The last time we saw a slump like this was during the Global Financial Crisis and the early 90s recession. Moreover, the residential building permits have plummeted, reaching the lowest level in over a decade.Shifting focus to overall unemployment, there’s more to worry about. The unemployment rate has surged to 5.5% in the last month, increasing by 50 bps in just 3 months. Such an escalation is seldom observed outside of recessions. Also, the accuracy of these statistics should be questioned due to rapid population growth over the past year, potentially leading to an underestimation of the unemployment rate. Notable job cuts by Telus, RBC, and BMO area adding to the economic concerns.The topic of affordability also presents a gloomy picture. The 5-year bond rate has surpassed 4.1%, reaching a 15-year high. This has consequently driven up fixed rates by 12 basis points in a week, making homeownership even more unattainable. The affordability crisis has reached such an extent that even individuals earning over $100,000 per year are seeking assistance from organizations like Habitat for Humanity to secure rental units or purchase homes!How does this compare to Canada’s other major market in Toronto? Join this weeks podcast and get the whole story! _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

In July 2023, the Vancouver real estate market underwent significant changes, presenting a complex landscape for buyers and sellers. The month saw 2,455 properties sold, marking an impressive 29% increase from the previous year. However, this apparent surge in sales volume masked an underlying trend of consecutive declines in summer months, suggesting a slowdown in overall market activity. In fact, the number of sales was found to be 15.6% below the 10-year seasonal average of 2,909, signaling a potential shift in the market dynamics.A major challenge faced by buyers now is the scarcity of inventory. With only 9,639 properties available for sale, the market experienced a significant 16% drop in inventory from the previous year. This shortage has persisted for eight consecutive months, with the number of available properties remaining below the 10,000 mark! The limited inventory played a crucial role in driving up property prices throughout 2023, making it difficult for buyers to find suitable options and cratering affordability.Adding to the complexity for buyers, mortgage rates reached a 22-year high during this time. The combination of high rates and low inventory created a difficult environment for potential investors and first-time buyers, leading to a majority of sales being driven by existing homeowners looking to move.New listings in July 2023 brought some relief, with a 17% increase compared to the previous year, with 4,649 new properties entering the market. However, this optimism was dampened by the fact that sales volumes has now declined for two consecutive months, and the number of new listings was 5.2% below the 10-year seasonal average. These trends suggested that August's real estate data would likely show continuing lower listings, sales volume, and potentially even prices.Despite the challenging market conditions, property prices continued their upward trajectory. The Home Price Index (HPI) rose for the seventh consecutive month, with prices increasing by $7,000 in the last month alone. This represented a 0.6% increase from the previous month and a 0.5% increase from July 2022. Remarkably, the HPI was only 4% below the all-time high, indicating the market's resilience despite the high mortgage rates. Additionally,  the median price of homes rose by $20,000 to $978,500, and the average price increased by $3,000 to $1,274,000. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

The current economic landscape is a complicated story and this week we focus in on several key areas, including the recent Federal Reserve (Fed) rate announcement, challenges posed by inflation, a cabinet shuffle in Canada, housing market trends, national updates, affordability concerns, credit trends, and the potential signs of a looming recession. This podcast offers our unique perspectives on the economic indicators and their implications on the various housing sectors.Starting with the recent US Federal Reserve rate announcement. The Fed has raised its interest rate by ¼ point, bringing it to the highest level in 22 years, similar to Canada's rate increases. Moreover, the Fed signaled the likelihood of yet another hike in 2023, especially if the economy continues to show signs of improvement. Despite the rate hikes, the US economy remains very resilient, with Q2 GDP surpassing the estimated 1.8%, coming in at 2.4%. Additionally, the stock market is showing an upward trend, indicating that there is currently no recession in the USA.The inflation challenges we may face in the future in Canada haven’t gone anywhere and with rising oil prices and increased mortgage interest payments, there are some key factors contributing the inflationary pressures. Recent data shows that oil prices have surged over the past month, and in Canada, rental rates in Toronto have seen significant increases, which may drive up the Consumer Price Index (CPI) basket. Based on this data, it is expected that inflation could be a concern over the next three months, with interest rates likely remaining around 5% for the next 12 months.National home sales are recording a 25% increase from the lows experienced at the end of 2022. However, it is expected that the run-up in home sales will plateau for the time being. While listings have started to increase slightly, they still remain below long-term averages. Active listings are predominantly in Ontario, with a current count of 130k, which is half of what they were in 2015. Though prices have risen by 2% in June and 6% over the last three months, the Home Price Index (HPI) indicates a potential downturn in the housing market.Affordability concerns faced by homebuyers are as real as they’ve ever been. Mortgage rates have reached levels last seen in 2007. The average monthly payment required to purchase a typical home in Canada has surged by 12% in just four months, hitting $3,500 per month, raising even more concerns about housing affordability for most Canadians.Credit trends have revealed that new mortgage growth has been slowing since Q2 2022. Borrowers are increasingly opting for short-term fixed-rate mortgages, accounting for 80% of recent mortgages. Additionally, credit card debt has been surging since January 2021, although foreclosures remain near all-time lows due to homeowners prioritizing mortgage payments.The economic landscape remains dynamic, with both positive and concerning indicators. As the Fed and the Canadian government navigate inflationary pressures through interest rate adjustments, the housing market experiences shifts in demand and supply. Affordability concerns and credit trends also play critical roles in shaping the economic outlook. Furthermore, potential signs of a recession warrant close monitoring to anticipate and respond to economic challenges effectively. _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Thinking about selling your home and want to know when is the best time?Well knowing when not to sell is equally as important.I’m going to give you 5 compelling reasons why you shouldn’t sell your home in 2023.Selling your home is a big decision, you only get 1 chance to maximize the sale price and walk with as much capital as possible.This video was created to offer some insights into how holding on to your property even longer could potentially result in a higher sale price in the future AND share insights into how you may be able to hold that property indefinitely, yet still be able to access the equity to make the move into your next property, or help finance your retirement years.   _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com

Inflation in Canada has been easing, with the current rate standing at 2.8%, the slowest since March 2021 and down from 3.4%. The largest factor contributing to this decline was lower gasoline prices compared to the same period last year, showing a decrease of 21.6%. However, shelter costs have risen by 4.8% year over year, driven by significantly higher mortgage interest costs (up 30.1% from the previous year) and increased rents (up 5.8% from June 2022). Moreover, grocery prices have surged by 9.1% year over year.Analyzing the inflation trends, it has been on a downward trajectory for a year, starting from July 2022 when rates were at 3.75%.  With the overnight rate at 5%, and inflation within the target band of 1-3%, the looming question becomes, does the BOC continue to raise, hold or start to cut? The Bank of Canada estimates inflation to hover around 3% for one year and gradually decrease to 2% by mid-2025, signaling that rates may very well need to remain around 5% for the next 2 years.    This would dramatically alter the housing landscape. In the housing market, housing starts have been fluctuating, with Canadian housing starts rising by 41% to 280k units in June, following a 23% decline in the previous month. Compared to the same month last year, starts were up by 4%. In British Columbia, new housing starts rose significantly by 61% to 66k units in June, showing a 17% increase from June 2022 levels. While there is an overall upward trend in housing starts, they have not fully recovered from the lows observed in mid-2020 and 2022. Additionally, despite the current level of construction, it is not keeping up with population growth.Affordability remains a concern due to high interest rates. Purchasing the average priced GVRD home at $1.2 million with 20% down requires a buyer to have an annual income of $215,000 and carry no debt. This has led many potential buyers into the rental market, driving up rental prices. Canada's average rent reached a new all-time high in June at $2042, with average annual rents increasing by 20% over the last two years. In Vancouver, one-bedroom rents were up by 18% year over year and two-bedroom rents by 14% year over year.Short-term rentals have seen a significant increase, with 4,100 active listings, up by 37% year over year. This surge comes at a time when many people are struggling to find long-term rental accommodations, creating further challenges in the rental market.High interest rates are keeping people in their homes, resulting in limited housing inventory in the immediate future. The cost to build new housing is prohibitive, leading to concerns about affordability. The population continues to grow at a record pace each quarter. As interest rates are expected to remain high for an extended period, more individuals may face financial strain, and many who bought homes in the last five years may no longer qualify for their current properties.No matter what type of housing you are in, looking for, renting, building or selling - it’s a struggle for almost everyone out there.   _________________________________ Contact Us To Book Your Private Consultation: 📆 https://calendly.com/thevancouverlife Dan Wurtele, PREC, REIA 604.809.0834 dan@thevancouverlife.com Ryan Dash PREC 778.898.0089 ryan@thevancouverlife.com www.thevancouverlife.com