Will home sales stay resilient in the face of high interest rates?

Our H2 2023 forecast checks market trends and economic factors to predict what the housing market will look like in the rest of 2023.
Forecast
Residential
Author

GVR Economics

Published

September 7, 2023

Economic forecast

Since we published the Real Estate Board of Greater Vancouver’s first-half forecast in January, Metro Vancouver’s residential market has shown surprising resilience and strength, with the impact of the Bank of Canada’s most recent tightening cycle beginning to fade into the backdrop of history.

While mortgage rates remain at levels not seen in over ten years, home sales have been relatively strong with sales activity nearing pre-tightening cycle levels. But will this trend continue?

Our H2 forecast looks at current and historical market trends alongside economic factors like inflation and risk of recession to predict what the second half of 2023’s housing market will look like.

Key highlights

  • With the actual number of sales falling just shy of the predicted year-to-date total we believe our H1 forecast remains on-track.

  • Prices have already surpassed our year-end estimates from H1, and inventory remains historically low.

  • We have revised our price growth estimates modestly upwards. While inflation is finally receding in Canada, the impact of higher interest rates still poses risks to the greater economy.