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Trevor, can you sum up the market in one sentence? Sure – Transitory real estate market stalls with buyers remaining on the sidelines, creating opportunity for others. How’d I do?
SUMMARY
Overall HPI Benchmark prices in the Fraser Valley and Surrey remain relatively flat with a slight decrease of approx. 1% compared to last year. As seen over the past few months, there was an increase in inventory due to a slower sales pace resulting in properties being on the market longer. This is providing buyers with opportunities.
THE MARKET
Prices in the Fraser Valley remain relatively flat when compared to last year with a slight decrease of approx. 1%. There are pocket areas of opportunities for buyers, such as detached homes in Mission (down -5% compared to last year). Detached and Townhome property types in the Fraser Valley experienced a slight dip in prices when compared to last month. Condo apartments actually had a small increase (+0.4%) compared to the previous month. But where are the opportunities? Drilling into the numbers here are the areas where there may be current opportunities:
- Detached homes in Surrey & Mission have experienced an approximate -4.5% HPI price decrease compared to last year
- Townhouses in North Delta have experienced an approximate -4.6% HPI price decrease compared to last year
- Apartments in Abbotsford (specifically Central Abbotsford/Downtown) have experienced an approximate -5.7% HPI price decrease compared to last year
BENCHMARK PRICES & DAYS ON MARKET
Benchmark prices in the Fraser Valley / City of Surrey compared to last year:
- Detached = $1,501,100 (-1.3%) / $1,628,600 (-2.1%)
- Townhouses = $834,400 (-1.6%) / $861,200 (-2.3%)
- Apartments = $546,200 (+0.4%) / $539,300 (+0.2%)
Properties are on the market a little longer with the average for all property types being 36 days for the Fraser Valley/Surrey when compared to the previous month (+5 days compared to August). By property type for the Fraser Valley:
- Detached (+2 to 38 days)
- Townhouses (+2 to 30 days)
- Apartments (+5 to 37 days).
Overall, the market is on the edge of becoming a buyer’s market. With the potential for future Bank of Canada interest rate reductions and upcoming legislative changes, my current thought is that the market will shift back into balanced territory before ultimately swinging to a seller’s market in 2025. A big unknown is the upcoming provincial election – more on that in the December newsletter. With that said, there are current opportunities – so if you are considering getting into the market, speak to a trusted real estate expert to fully explore your situation.
OTHER FACTORS
If you are looking to get into the market, here are a few things for you to consider as these changes could have an impact on your property buying or selling plans.
- Bank of Canada lowers its overnight rate to 4.25% in September which is the third consecutive rate reduction this year. There are only two more rate decisions in 2024, with the next rate decision being on October 25th
- Mortgage Amortizations have been extended to 30 years for two buyer groups: Newly constructed homes and First-time home buyers (this will lower your monthly payment but increases the amount of interest paid over the mortgage lifetime)
- The cap for mortgage insurance has increased to $1.5M (previously $1M) effective December 15th. (see below for an example of how this helps buyers)
Example: The below chart outlines the CURRENT minimum down payment required for different purchase prices (up to $500K, up to $1M, over $1M, $1.5M). The second chart outlines the minimum down payment required under the NEW STRUCTURE effective December 15th.
| Minimum down payment – Current Structure | Purchase price up to $500,000 | Purchase price
$999,999 |
Purchase price
$1M |
Purchase price
$1.5M |
| 5% for the portion of the purchase price up to $500,000 | $25,000 | $25,000 | n/a | n/a |
| 10% for the portion above $500K but less and $999,999 | n/a | $50,000 | n/a | n/a |
| 20% required for $1M plus | n/a | n/a | $200,000 | $300,000 |
| Total down payment required | $25,000 | $75,000 | $200,000 | $300,000 |
| Minimum down payment – New Structure effective
December 15 |
Purchase price up to $500,000 | Purchase price $1M | Purchase price
$1.5M |
| 5% for the portion of the purchase price up to $500,000 | $25,000 | $25,000 | $25,000 |
| 10% for the portion above $500K but less than $1.5M | n/a | $50,000 | $100,000 |
| Total down payment required | $25,000 | $75,000 | $125,000 |
Essentially, the minimum down payment for a $1.5M property goes from being $300,000 under the current system to $125,000 after December 15th, 2024. Or another example – properties priced at $1M go from $200,000 to $75,000 minimum down payments after December 15th.
If you are looking to discuss your specific situation and how these (or other) changes affect you, don’t hesitate to reach out.
1 – The Fraser Valley Real Estate Board consists of the communities of Abbotsford, Langley, Mission, North Delta, Surrey and White Rock
September 2024 Market Update for Fraser Valley
September 2024 Market Update for Surrey
