The 2023 Housing Market Forecast for Metro Vancouver: Mild Price Increases Despite Slowing Sales.
According to the 2023 housing market forecast released by the Real Estate Board of Greater Vancouver (REBGV), the housing slowdown in Metro Vancouver is anticipated to persist throughout 2023. The estimated total number of home sales for the year is 28,500, a decrease of 2.6% from the 29,261 units sold in 2022. This includes a drop of 7% in apartment units to 14,500, a slight increase of 0.3% in townhouse units to 5,000, and a rise of 4.3% in single-family detached units to 8,750.
The average home price increase for 2023 is expected to be modest, with a 1.4% year-over-year increase to $1.2 million. This includes a 1.1% increase to $775,000 for apartments, a 2.1% increase to $1.185 million for townhouses, and a 2% increase to $2.025 million for single-family detached homes.
The potential risks of an economic recession, stagnation, and rising mortgage rates could affect these projections. The Bank of Canada recently raised its interest rate by 0.25% to 4.5%, surprising some economists. However, REBGV notes that home prices in Metro Vancouver have historically been resilient to the Bank of Canada's interest rate tightening cycles and resulting mortgage rate hikes.
Despite a 10% decrease in home prices during the current tightening cycle, there are indications that the pace of decline is slowing. The steady population growth in Metro Vancouver and the surrounding areas, as well as the federal government's higher immigration targets, are factors that are expected to continue fueling demand and pushing up home prices in the region.