Housing sales in the Metro Vancouver and Abbotsford- Mission region (Lower Mainland) slipped another rung in June, marking a third straight monthly decline. (READ: Vancouver area housing not as expensive as we thought)
MLS home sales fell to a seasonally-adjusted annualized rate of 43,400 units during the month, down 5.5 per cent from May figures to trend at the lowest monthly pace since September of last year.
This recent softening of demand reflects the persistent effects of the more restrictive mortgage insurance rules introduced in March. In addition, slower population gains observed in the last quarter of 2010 and the first quarter of this year, and rising prices have likely further constrained demand despite a solid increase in Metro Vancouver employment this year and slightly lower mortgage rates.
While demand has pulled back, market supply was largely kept in check in June. Following three consecutive monthly declines, seasonally-adjusted new listings in June were virtually unchanged from May. The weaker flow of new listings, coupled with the expiration of existing listings, led to fewer units in inventory relative to May. This supply adjustment is not surprising as interest on the part of sellers to list properties tends to wane when market demand slows. As a result, the sales-to-active listings ratio in the Lower Mainland has remained in balance over the last three months despite fewer sales.
Balanced market conditions contributed to upward price pressures in June. According to the MLSLink Housing Price Index (HPI) – which controls for attributes such as square footage, number of bedrooms, and structure type – the typical benchmark home in the Lower Mainland appreciated by a seasonally-adjusted 0.4 per cent from May. This pushed the benchmark price up to $575,600 and represented a ninth consecutive monthly gain. Monthly growth has slowed in recent months on weaker demand.
Among product types, the seasonally-adjusted HPI for detached and attached homes rose 0.7 per cent and 0.9 per cent, and remained flat for apartment units.