May housing sales across Greater Vancouver fell for the second straight month and asking prices are being cut as month-to-month benchmark prices have dipped for the first time in at least two years.

Total May housing sales reached 2,918, down 31.6% from May of 2021 and down 9.7% from April of this year, reports the Real Estate Board of Greater Vancouver (REBGV).

April sales were down 25% from March 2022, which had set a monthly transactions record.

While the board’s benchmark composite price index shows a modest 0.3% drop from April, the raw average price of a Greater Vancouver home in May was down $65,000 from the peak high in February to $1,279,785, according to data provided by Dexter Associates, a veteran Vancouver real estate agency.

The median sold price in Greater Vancouver for May stands at $922,000, down 12% from the February peak and below the $1 million level for the third month in a row.

“With interest rates rising, homebuyers are taking more time to make their decisions in today’s housing market,” said Daniel John, RE BGV chairman. “Homebuyers have been operating in a frenzied environment for much of the past two years.”

John described the current market as “calming,” but that may not reflect the attitude of some home sellers, especially in the suburbs.

“There is panic in the market,” said Kevin Skipworth, a partner and managing broker at Dexter Associates.

“But there shouldn’t be.”

Skipworth noted that after other sudden sales and price slides – in 2008, 2016 and 2018 – the Metro Vancouver market recovered quickly.

“There will always be troughs and peaks, that’s what markets do,” he said.

Still the slump in May sales was before the latest Bank of Canada rate hike on June 1, which raised the bellwether overnight lending rate 50 basis points to 1.5%, the highest since pre-pandemic days.

Also, the mandatory mortgage stress test increased on June 1 to 5.25%, or 2% higher than the posted five-year mortgage rate, whichever is higher.

Some sellers are reducing asking prices in a more competitive market in which the number of homes listed for sale shot up 13.8% from a month earlier to 10,010 units in May.

Price Reductions Surface as Metro Vancouver Home Sales Continue to Slide by Frank O’Brien | BIV