Sales Improve Slightly, But The Market Remains in Critical Condition.
May brought a bit of a pulse back to the market, sales rose 13% from April to 1,183 transactions. But let’s keep it real, that’s still 22% below last May and 36% below the 10-year seasonal average. This market might’ve found a heartbeat, but it’s still in the ICU.
Inventory continued to climb, rising 6% month-over-month to 10,626 active listings. New listings also increased to 4,007. The sales-to-active listings ratio ticked up slightly to 11%, but that still places us in buyer’s market territory. For reference, anything between 12 and 20% is considered balanced.
The composite Benchmark price fell 1% month-over-month to $963,200, the largest monthly decline so far this year.
By property type:
- Detached: fell to $1,481,900, down 1.6% from April and 3.2% year-over-year
- Townhomes: fell to $832,800, down 0.03% month-over-month, and down 2.5% year-over-year
- Condos: fell to $532,700, down 0.9% from April and 4% year-over-year
Average days to sell was a bit of a mixed bag. Detached homes rose from 32 to 34 days, townhomes improved from 29 to 27 days, and condos rose to 33 days after sitting at 29 the previous month. Median days to sell offer a clearer picture of buyer urgency.
Detached homes had a median of 15 days, up from 14. Townhomes increased from 13 to 17 days, and condos decreased slightly from 19 to 18. These shifts suggest a growing divide between well-priced listings and those that are missing the mark. That widening gap between median and average in townhomes suggests more overpriced or stale inventory is sitting longer, even while value-priced units move quickly. So while some properties are still moving quickly, the broader trend points to increasing hesitation.
One of the biggest stories this month is the steep decline in market momentum across the board, especially for townhomes. Chilliwack townhomes, which were firmly in a seller’s market at 24% STR in April, collapsed to 11% in May, shifting straight into buyer’s market territory. That kind of month-over-month swing is rare. Most townhome segments across the Valley saw similar downward movement, with sell-through rates falling and failed listings piling up.
Detached markets also softened.
Surrey Central’s detached STR stayed weak at 6%, while even balanced or previously stable markets saw declines.
There were some exceptions as always, with New Westminster detached rising from 8% to 14%, and Maple Ridge detached crept up from 9% to 10%.
Overall, most areas and property types experienced a rise in failed listings as sellers came back to market misjudging buyer appetite. The repositioning has begun, but pricing hasn’t caught up yet.
The Bank of Canada held rates steady again on June 5 at 2.75%, making that two holds in a row. While that could give some hesitant buyers reason to re-engage, it doesn’t guarantee a wave of activity. Complicating matters, 5-year bond yields have climbed sharply from 2.75% to nearly 3%.
That means any hope for lower fixed mortgage rates in the short term is fading, and we may even see some lenders inch rates back up.
The job market isn’t helping either.
Canada’s unemployment rate rose again to 7%, with only 8,800 jobs added in May.
Consumer confidence rose slightly, but remains below historic averages. Meanwhile, household debt is now over $3 trillion, and delinquencies are beginning to tick up, especially for non-mortgage credit.
The federal government has announced new measures to speed up housing and infrastructure projects, aiming to bring completions to 500,000 homes per year. But this number is wildly unrealistic and will primarily target government-owned, low-cost rental units rather than actual homeownership. For reference, previous years saw around 250,000 housing starts on the high end, and I’ve yet to see a clear explanation of how that number will be doubled amidst developers pulling back. A recent TD Economics report called it a “tall order”. Regardless, the goal isn’t to help Canadians buy homes, it’s to expand state-owned housing, and in many cases, this looks more like institutionalized poverty than a pathway to stability.
Adding to the confusion, the new Minister of Housing has publicly stated they do not want housing prices to come down. That might sound odd at first, until you consider that real estate makes up a massive portion of our national GDP. A major correction could trigger banking instability or margin calls, so propping up prices has become a policy objective, regardless of affordability.
Meanwhile, the government has introduced a GST exemption for first-time homebuyers purchasing new construction under $1,500,000. On the surface, that sounds like a win, but the benefit depends entirely on what’s being built and where. I’ve broken this down in detail if you want to see who this actually helps.
The Fraser Valley is heading into a seasonally slower period with rising inventory and slowing sales. Yes, we saw month-over-month sales growth, but it came in well below seasonal norms. The HPI has held relatively steady up to now, but May marked the sharpest month-over-month drop of the year. If this momentum doesn’t improve soon, the dam will break, and we’ll see more sellers pricing to move rather than holding the line.
As always, your specific segment matters. Detached vs. attached, east vs. west, turn-key vs. fixer, all behave differently in this environment.
If you’re thinking of buying or selling, let’s chat about how to time and position yourself to get ahead of the shift.
And let me know, do you think two rate holds are enough to kick-start confidence again? Or are we heading for more turbulence?
