Home sales tumbled in Vancouver last month, adding to evidence that interest rate hikes are pushing many would-be buyers to the sidelines.

The Real Estate Board of Greater Vancouver (REBGV) said in a release on Wednesday there were 1,887 sales across the region last month; that represents a 43.3 per cent plunge from a year earlier, and a drop of 22.8 per cent from June. The real estate board added that July’s sales activity was 35.2 per cent below the 10-year average for the month.

Despite the plunge in sales, prices were relatively stable. The REBGV said the benchmark price for Metro Vancouver dipped 2.2 per cent sequentially to $1,207,400. Compared to a year earlier, the benchmark price rose 10.3 per cent.

“Homebuyers are exercising more caution in today’s market in response to rising interest rates and inflationary concerns. This allowed the selection of homes for sale to increase and prices to edge down in the region over the last three months,” said REBGV Chair Daniel John in a release.

The Bank of Canada has raised its target for the overnight rate four times this year, most recently with a full-point hike in July to 2.5 per cent.

According to REBGV data, new home listings plummeted 24.7 per cent from June to July, while the total number of homes listed for sale dipped 1.3 per cent last month.

Housing markets not built to withstand these interest rate levels: Steve Saretsky

Steve Saretsky, a Vancouver realtor at Oakwyn Realty, joins BNN Bloomberg to discuss the July 2022 data for Vancouver home sales that showed a plunge in sales. He says home sales tend to drop precipitously when mortgage rates move north of 3.5 per cent, as there is too much indebtedness and leverage in the housing market. Saretsky says there’s very weak demand and low inventory in the Vancouver market right now and he doesn’t see an imminent rebalancing.

Steve Saretsky, a Vancouver-based realtor at Oakwyn Realty, said in an interview Wednesday that the best way to describe local market conditions is "illiquid" as prospective homebuyers play the waiting game, expecting that they'll be able get a better price in the future. 

"When you dig through the weeds, the months of inventory for sale is still pushing higher because the demand is just so weak. So we're not really seeing this flood of sellers and everyone panicking, going, 'Oh my gosh, interest rates are up.'”