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Metro Vancouver real estate enters ‘weird’ spring market

Pent-up buyer demand drives multiple offers, bidding wars and increase in activity
Vancouver's Yaletown neighbourhood in the city's downtown

Buyer confidence and activity is increasing in B.C. despite continued short supply and price escalation, according to real estate professionals.

Sales increased by eight per cent month over month in Metro Vancouver in April, said MLA Canada’s Brittany Reimer, a partner and managing director in the real estate agency’s Fraser Valley office. 

Brendon Ogmundson, chief economist at the B.C. Real Estate Association, described the current market as “really strange.”

He added it’s interesting to see sales increase without any economic drivers, such as a decrease in interest rates. Ogmundson attributed the increased sales activity to pent-up demand.

“Our sort of thesis was that we have a decent recovery in the second half of 2023 and a good handoff in 2024. None of those things are actually happening and yet we're getting a recovery even before our timeline,” he said.

Sales activity is still considered below normal levels, despite the increases. 

The average number of total sales in Metro Vancouver is typically around 3,200 in April, Ogmundson said. Sales reached 2,741 last month, according to the Real Estate Board of Greater Vancouver (REBGV). 

The benchmark price for all Metro Vancouver residential properties listed on MLS is $1,170,700. That amounts to a 7.4 per cent decrease year over year and a 2.3 per cent increase compared with March 2023, according to REBGV.  

“Given that prices are starting to tick higher and mortgage rates are still elevated, affordability – especially for first-time homebuyers – is going to get even more challenging,” Ogmundson said. 

Multiple offers, bidding wars and increased attendance at showings have been noted by Reimer, who said that this is creating momentum among buyers “as people try not to miss out.”

“That is a really positive sign and indicator for the market, and quite a shift from what we've been seeing over the last two years,” she said. “Especially now with April numbers coming in strong and feeling like those May numbers will look like they will eclipse April, that alone is something we feel will tip people over the edge and also motivate more sellers to hopefully come to market. One of the challenges for buyers out there is just the sheer lack of inventory.” 

Sales will remain below normal levels in the months to come but will not be as low as what has been posted in the last six months, Ogmundson said. 

“There's a lot of uncertainty, less uncertain on the interest rate side, but still uncertainty on how the economy is going to do the rest of this year. The consensus is still that we're very likely to have a recession this year, maybe it will be short and mild,” he said.